International recruitment firm SThree (STHR: LSE) published a trading update for Q1, covering the period from 1 December 2016 to date; financial information relates to the quarter ended 28 February 2017.

Gross Profit for SThree was broken down as follows:

Gross Profit broken down by geography was as follows:

The ICT sector was up 2% year-on-year, while banking and finance and energy were both down 8%, all in constant currency. Engineering was down 1% in constant currency while Life Sciences and the ‘Other 3’ sector were both up 4%, year-on-year and in constant currency.

According to SThree, Q1 Group gross profit was flat year-on-year and in constant currency as they experienced strong growth in Continental Europe and the USA. But the overall growth rate was impacted by a continuation of the more difficult market conditions in Banking and Finance, and Brexit uncertainty and Public Sector reforms within the UK.

A significant proportion of growth in contract was driven by Continental Europe which was up 17% in constant currency and the USA which was up 11% in constant currency, year-on-year. Together they represented 73% of Group Contract Gross Profit.

Permanent Gross Profit was down 14% (constant currency) with UK & Ireland down 37% (constant currency) and Continental Europe down 11% (constant currency) offset by a strong performance in the USA up 16% (constant currency), year-on-year.

The UK & Ireland Permanent performance reflected a 27% (reported) reduction in average sales headcount, year-on-year. According to the group, SThree’s performance in Continental Europe in part reflects very strong prior year comparatives, with Gross Profit in Q1 2016 up 25% (constant currency), year-on-year. Permanent productivity per head improved by 6% (constant currency) year-on-year, with average heads down 18% (reported), year-on-year.

Gary Elden, Chief Executive, commented: “Overall, we've made a satisfactory start to the year in what is our seasonally least significant quarter.

“Our Contract business continues to grow robustly. We were also pleased to see momentum re-established in the USA, where Gross Profit grew by 12% (constant currency) in the first quarter, a significant acceleration from H2 2016.”

“Contract Gross Profit increased by 7% (constant currency) year-on-year, driven by continued strong growth in Continental Europe, where Contract Gross Profit was ahead by 17% (constant currency) in the first quarter,” Elden said.

“Our Permanent business benefited from a further improvement in productivity, driven by a particularly strong performance in USA, which was up 16% (constant currency), year-on-year in Q1. Further productivity gains will remain the priority for our Permanent business in 2017,” Elden said.

“Looking ahead, political and macro-economic uncertainty remains at heightened levels in a number of our key regions. Against this background, we are managing the business prudently and continue to invest in our highest performing teams. Our focus on Contract, the continued strength of our performance in Continental Europe, our greater momentum in the USA and firm control of our cost base, leave us well positioned for the future,” Elden said.

In trading today, SThree traded at £305.30, down 3.23% on the day and 14.0% below its 52-week high of £355.00, set on 3 June 2016. Based on its current share price the company has a market value of £406.82 million.