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SThree plc Issues Q1 Interim Management Statement

SThree plc Issues Q1 Interim Management Statement

SThree plc ("SThree" or the "Group"), the international specialist staffing business, is today issuing an Interim Management Statement covering the period from 29 November 2010 to date financial information relates to the quarter ended 27 February 2011.


All regions continuing to show improving performance
Permanent gross profit up 32%* year on year
Contract gross profit up 8%* year on year
Group gross profit up 19%* year on year
Permanent deal pipeline volume up in excess of 30% year on year
Strong financial position with net cash of circa 49m at period end

Group gross profit achieved in the first quarter increased by 19%* year on year to circa 42m (2010: 35.8m). UK gross profit increased by 12% and non-UK gross profit increased by 24%*. Non-UK now represents 63% of gross profit (2010 full year: 60%). Permanent gross profit increased by 32%* and Contract gross profit increased by 8%*. In the quarter, Permanent represented 50% of gross profit (2010 full year: 49%).

During the quarter SThree made a total of 1,604** permanent placements, an increase of 19% over the prior year (2010: 1,344**). Average placement fees remained strong. At the end of the first quarter SThree had 4,207 active contractors, an increase of 8% on the same quarter in the prior year (2010: 3,906) and a seasonal decline of 3% on the year end number (28 November 2010: 4,359). Average contractor gross profit per day rates have remained strong.

During the quarter, UK permanent placements were up 11% year on year. Average UK permanent placement fees have remained strong. At the end of the first quarter UK contract runners were level year on year and UK gross profit per day rates remained robust.

During the quarter, non-UK permanent placements increased by 31% year on year and average fees remained robust. At the end of the first quarter non-UK contract runners increased by 18% year on year, with gross profit per day rates remaining strong.

The current permanent deal pipeline reflects continuing improvements across all regions. At 27 February 2011, the number of permanent deals agreed, with candidates due to start, was up more than 30% year on year.

Group sales headcount at 27 February 2011 was up 2.7% versus the year end, and up 11.2% year on year. UK sales headcount was up 4.7% year on year, and up 0.4% quarter on quarter, and non-UK sales headcount was up 15.9% year on year, and up 4.2% quarter on quarter. The Group had 188 live sales vacancies at the end of the quarter.

The Group has 52 offices and plans to open new offices in Sao Paulo, Doha and Antwerp during the first half of 2011.

The Group remains in a strong cash position with net cash of circa 49m at 27 February 2011.

Russell Clements, Chief Executive, commented:

"For seasonal reasons, the first quarter is the Group's least significant in terms of the year as a whole. Nonetheless, it is encouraging to see that all of the regions in which we operate have remained on an upward trend. We also take confidence from our deal pipeline, with deals agreed but yet to start up by more than 30% year on year. In addition, the performance of our contract business during the quarter has been the strongest in recent years. We have started 2011 in good shape to take full advantage of an improving market opportunity and as a more international and diversified business than at any time in our history."

* at constant currency
** excludes retained business
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