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Satisfactory SThree

SThree plc has announced its interim results for the six months ended 31 May 2009

Revenues were 280.6 million down 5% from 2008. Gross profits of 93.3 were down 9% on 2008 and profit before tax and exceptional items was down 53% to 11.2 million.

Operational Highlights

Satisfactory first half performance in a very challenging market. Gross Profit down 9% to 93.3m (2008: 102.5m). On a constant currency basis Gross Profit down 15%

Permanent placements down by 34.1% to 3,302 (2008: 5,008) - average permanent placement fee up significantly by 17.3% to 11,838 (2008: 10,091)

Number of active contractors at period end reduced by 21.8% to 4,494 (2008: 5,743) - average gross profit per day rates increased by 10.8% to 87.67 (2008: 79.11)

Contract margin improved to 22.5% (2008: 21.4%)

Contract versus permanent mix of Gross Profit now 58:42 in favour of contract (Full year 2008: 52:48)

Non-UK Gross Profit for the period represented 54% of the Group total (Full year 2008: 45%)

International business performed robustly, growing Gross Profit by 20% to 50.7m (2008: 42.4m).
The UK business posted a 29% decline in Gross Profit to 42.6m (2008: 60.1m)

Non-ICT business segments grew by 9% to 23.6m (2008: 21.8m) representing 25% of total Gross Profit

New offices opened in Dusseldorf, Frankfurt, Hamburg and Singapore

Business right sized in Q2 2009 for the prevailing climate, resulting in a 25% reduction in headcount and an
exceptional charge of 8.5m

Basic earnings per share (before exceptional items) of 6.3p (2008: 11.8p) post exceptional 1.1p (2008: 10.8p)

Net cash position strong at 43.9m (2008: 3.9m net cash) and reduction of days sales outstanding to 39 (2008: 51)

Interim dividend maintained at 4.0p (2008: 4.0p)

Russell Clements, CEO, commented: "The Group performed very satisfactorily in the first half in extremely challenging market conditions. In particular, we are pleased with the strong contribution made by our international businesses, which grew by 20%, reflecting both our growing international presence and the structural growth opportunities available outside of the mature staffing markets of the UK and US. Our commitment to maintaining price discipline was once again evident in our robust like for like fee growth, with average fees improving further even in the face of significant volume declines. This performance is testament to the strengths of the Group's well-established positioning in the SME market, significant contract business and focus on the placement of specialist candidates in higher wage bands.

"Whilst we took decisive restructuring action in the period to align our cost base with the market opportunity, we also continue to invest for the future - expanding our international network into new territories and adding or growing new disciplines such as Legal, Sales & Marketing and Public Sector.

"With a strong cash position and healthy balance sheet the Group is well positioned to ride out the current downturn and capture the opportunities of the recovery when it arrives. In the meantime, it is gratifying to once again be in a position to reward our shareholders' commitment with a strong dividend payment."


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