Trading conditions are not improving but things are not getting any worse, SThree’s chief executive has told Recruiter.

“There is no doubt that we are seeing some signs of stabilisation in the UK. That’s not the same as an improvement but no further rate of decline, which feel like an improvement.

“The banking market is a bit better though from a low base, but there is no radical change to the situation.  The ‘mood music’ is better because people are thinking it’s not getting any worse.”

Clements said the company was doing particularly well in Germany where it had enjoyed 40% growth. This is predominantly due to “the underdeveloped German market”, said Clements.

Clements’ comments came after SThree announced that its UK placements halved during the first six months of its financial year as the company was hit by “exceptionally challenging market conditions”.

In a trading statement for the six months ending 31 May 2009, the company says the company experienced an overall decline in demand for its services. Temporary placements fell by 21.8% compared to the same period in 2008.

“However, average permanent placement fees continued to improve both in the UK and internationally.

The company improved its cash position, with a net cash flow of roughly £45m at the end of the period compared with £24.6m as of 1 December 2008.

Debtor days fell from 43 days to 39 days during the second quarter.

Gross profit in the period declined by 9% to £93m (2008: £102.5m).

Total headcount over the period was reduced by circa 25%.

UK sales headcount was down by circa 33% and non-UK sales headcount by circa 17% as the company took “proactively steps” to actively manage its headcount.

The company says it believes that group headcount is now “at an appropriate level in light of the current market conditions and opportunities”.

Clements adds: “The first half of 2009 has seen exceptionally challenging market conditions. By contrast, during the same period in 2008, all of our markets were still growing, making the year-on-year comparatives particularly tough.

However we are equally committed to ensuring that we do not compromise the group’s capacity for a strong bounce back as markets recover.

“In this respect our exceptionally strong cash position gives us the capacity to make prudent investments for the future, while at the same time continuing to support our dividend.”

SThree will be announcing its interim results for the six months ended 31 May 2009 on 20 July 2009.