SThree posts fall in HY profit on higher operating costs

(Reuters) -British recruiter SThree reported a fall in first-half operating profit on Tuesday, as operating costs related to its technology improvement programme increased from a year earlier.

The mid-cap recruiter noted a modest improvement in new placement activity in June, but said it was too early to know whether this trend would continue.

The company said trading had been in line with market expectation for the year ending Nov. 30. Analysts on average expect an annual pre-tax profit of 71.6 million pounds ($91.98 million), according to a company-compiled consensus.

Net fees from its largest division, contract hiring, rose 3%, while the permanent division saw a 19% fall in the first half.

Quarterly net fees for peers Hays, Robert Walters and PageGroup fell as employers took longer to hire new staff and candidates showed more reluctance to change jobs especially in the U.S., UK and China markets.

SThree, which hires employees for finance, energy, banking, pharmaceutical, engineering and tech sectors, said adjusted operating profit came in at 38.1 million pounds for the half year ended May 31, down from 44.6 million pounds reported last year.

($1 = 0.7784 pounds)

(Reporting by Prerna Bedi in Bengaluru; Editing by Subhranshu Sahu)