Shares in SThree have slipped nearly 6% after the staffing group reported half year profits down by a third.
Pre-tax profits fell by 34.8% to £7.3m (excluding an exceptionial charge taken last year) although the company said it had made a strong start to the second half and was cautiously optimistic about the outlook. Despite many analysts - such as Panmure Gordon and Investec - sticking to their buy recommendations the shares are currently down 16.9p at 276.1p. Collins Stewart has a hold recommendation, and analyst James Gilbert said:
SThree's valuation does not seem expensive, and we do see 19% upside to the current share price versus our price target. However, we think it is the wrong time to be buying a stock geared to recovery in Europe and the UK. The risk-reward trade-off appears more favourable for peers.
Meanwhile David O'Brien at Altium Securites said that for the company to meet its full year profit forecasts, "the improvement in momentum begun in the second quarter needs to be stepped up."
