MARKET REPORT: Recruiters fall as German crisis hits employment

Shares in recruitment firm SThree plummeted yesterday after it warned that political and economic turmoil in Europe is hitting its profits.

The FTSE 250 company, which specializes in jobs for science, technology, engineering and maths experts, now expects profits of around £25 million for the 12 months to the end of November 2025.

This is less than half the £66m expected by analysts.

The shares slumped 36 per cent at the start and ended the day down 26.6 per cent, or 96 pence, at 265 pence.

The group, whose largest market is Germany, devastated by the crisis, has lost 36 percent of its value this year.

The sell-off spread to other recruiters: Hays fell 3.6 per cent, or 3p, to 79.7p, while Page Group fell 4.1 per cent, or 15.4p, to 359.8p .

SThree chief executive Timo Lehne said the past year was “characterised by prolonged and challenging market conditions which have impacted new business activity”. He warned that this trend will persist next year.

Recruiters suffer during periods of uncertainty when companies delay hiring and employees think twice before jumping into new jobs.

SThree, which recruits for the finance, energy, banking, pharmaceutical, engineering and technology sectors, said rates for the year to the end of November 2024 fell 9 per cent.

In Germany, rates fell by 12 percent. With the high outlook for interest rates on investors’ minds, the FTSE 100 rose 0.1 per cent, or 10.14 points, to 8,311.76 and the FTSE 250 fell 0.1 per cent, or 24.41 points, to 20,949.04.

Drinks giant Diageo was in the festive spirit after analysts at UBS upgraded their rating on the stock from “sell” to “buy” and raised the price target to 2,920p from 2,300p.

UBS highlighted positive signs for its US business, with key brands such as Don Julio tequila and Crown Royal whiskey growing strongly despite subdued demand for spirits. Diageo rose 2.8 per cent, or 69 pence, to 2,558.5 pence.

British Airways owner IAG continued its rise, rising another 1.3 per cent, or 3.8 pence, to 291.8 pence, to take its profit this year to 88 per cent.

At the second tier, Rolex seller Watches of Switzerland rose 3.4 percent, or 19 pence, to 582 pence after analysts at Kepler Cheuvreux raised its rating to “buy” from “hold” and increased the price target at 650p from 420p.

London Stock Exchange Group (LSEG) has sold its 4.92 per cent stake in Belgium-based financial services provider Euroclear for £375 million to TCorp, the New South Wales government’s financial services partner.

LSEG had bought the stake for around £242m in 2019, and it rose 0.4 per cent, or 45p, to 11,375.5p.

North Sea-focused Serica Energy is buying exploration and production assets from Parkmead Group for an initial consideration of £5m. Serica shares rose 5 per cent, or 6.6p, to 138p.

Magners cider owner C&C has appointed Roger White as its new chief executive, allowing Ralph Findlay to return as chairman after temporarily filling the role.

The shares rose 1.6 per cent, or 2.4p, to 150.2p.