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SThree plc Announces Its Interim results

SThree plc Announces Its Interim results for the six months ended 30 May 2010
SThree, the international specialist staffing business, is today announcing its interim results for the six months ended 30 May 2010.

Financial Highlights - six months ended

30 May 2010

31 May 2009

% change





Gross profit




Operating profit before exceptional items




Profit before taxation before exceptional items




Profit before taxation after exceptional items *




Basic earnings per share before exceptional items




Basic earnings per share after exceptional items *




Interim dividend



* Exceptional items relate to a charge for corporate restructuring announced on 15 April 2009 of 8.5m.
Operational Highlights
Year on year comparatives distorted by the average consultant headcount in H1 2010 of 1,057 being 24% lower than the H1 2009 average of 1,387, reflecting the impact of the 32% rightsizing of staff numbers initiated in Q2 2009
Satisfactory first half performance in a sequentially improving, but not yet fully recovered, market. Gross Profit down 20.3% year on year to 74.3m (2009: 93.3m). Like for like i.e. at constant currency ("LFL") Gross Profit down 19.4%
Sequentially Q2 2010 Gross Profit up 7.8% versus Q1 2010, with Permanent up 12.0% and Contract up 4.4%
Permanent placements down by 13.9% to 2,842 (2009: 3,302) - average permanent placement fee up 2.0% LFL to 12,071 (2009: 11,838)
Number of active contractors at period end reduced by 12.1% year on year to 3,952 (2009: 4,494) - average gross profit per day rates decreased by 4.3% LFL to 83.91 (2009: 87.67). Average contract margin achieved 21.4% (2009: 22.5%)
Contract versus Permanent mix of Gross Profit now 54:46 in favour of Contract (Full year 2009: 58:42)
Non-UK Gross Profit for the period represented 60% of the Group total (Full year 2009: 55%)
Rest of World (excluding UK and Europe) grew Gross Profit to 10% of mix (2009: 3%), up 136% year on year
Non-ICT business segments grew by 9.7% LFL, now representing 34% of total Gross Profit (Full year 2009: 28%)
Total headcount up 11.3% versus year end 2009 position, as the Group selectively reinvests in the business
New offices opened in Dsseldorf, Munich, Delhi and Perth San Francisco and Qatar offices to open in H2 2010
Net cash position strong at 31.6m (2009: 43.9m) after payment of a second interim dividend of 8.0p per share (circa 10m) in March 2010 in place of the final dividend for the 2009 full year. The 2008 final dividend of 8.0p per share was paid in June 2009 after the half year end
Interim dividend maintained at 4.0p (2009: 4.0p)
Strong start to second half with June GP up 14.9% year on year driven by significant increase in Permanent
Russell Clements, CEO, commented: "We are satisfied with a very creditable first half performance achieved in a market which, although much improved on the same period last year, is still some way from being fully recovered. Our year on year comparatives remain challenging given our average consultant headcount during H1 is still some way down on the same period last year. However, the fact that our current consultant headcount is 11% up on the end of 2009 reflects both the sequential improvements seen in recent months, which have allowed us to begin to rebuild established teams, as well as the staffing of our new international offices and teams addressing new market segments.
Having a strong sense of where the market is heading remains difficult, but on the basis of the currently available data we remain cautiously optimistic. That said, we are a debt-free, cash rich business with a long track record of consistent profitability and a highly experienced management team who are capable of dealing with whatever market conditions are presented to them. We are also a more diversified business by geography and by sector than at any time in our twenty four year history, increasingly exposed to markets with strong structural growth characteristics. This positions us extremely well both for the short and the longer term".


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