(Reuters) -British recruiter SThree on Thursday warned its 2025 fiscal year profit would badly miss forecasts, citing tough market conditions amid political and macro-economic uncertainty in Europe, sending its shares sharply lower.
Shares in the FTSE 250 firm, which have fallen about 14% so far this year, slumped as much as 36.3% to a more than four-year low of 230 pence in early trade.
Recruiting firms suffer during periods of uncertainty when companies delay new hires and employees think twice before jumping into new jobs.
Recent government collapses in Germany and France have added to the worries in Europe.
“The anticipated easing of market conditions has not yet materialised, with delayed decision-making continuing to impact new placement activity,” CEO Timo Lehne said in a statement.
SThree, which hires employees for the finance, energy, banking, pharmaceutical, engineering and tech sectors, operates across Europe, North America, the Middle East and Asia.
Its largest single market by net fees is Germany.
Its major business comes from hiring people on limited-term contracts, which many employers prefer during challenging times. That has helped it avoid some of the weakness experienced by its London-listed peers Hays, Pagegroup and Robert Walters.
SThree said it now expects pre-tax profit for the 2025 fiscal year, which started on Dec. 1, to be about 25 million pounds ($32 million) – less than half the company-compiled analysts’ consensus estimates of 66.6 million pounds.
The recruiter said its fiscal year 2025 earnings would include up to 7 million pounds of one-off costs.
SThree said it intends to launch a share buyback programme of up to 20 million pounds, to be completed over the next six months.
Group net fees for the year ended Nov.
30 fell 9% and the company said the fiscal year 2024 performance is expected to be in line with market expectations.
($1 = 0.7825 pounds)
(Reporting by Aby Jose Koilparambil and Prerna Bedi in Bengaluru; Editing by Eileen Soreng and Andrew Heavens)
