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SThree plc Announces Trading Update

SThree plc Announces Trading Update

SThree plc ("SThree" or the "Group"), the international specialist staffing business, today issues a trading update for the six month period ended 29 May 11, being the first half of the financial year ending 27 November 11.


All regions continuing to show improving performance
Permanent gross profit up 34%* year on year
Contract gross profit up 15%* year on year
Group gross profit up 23%* year on year
Improvement in both permanent and contract fees
Sales headcount growth of 14% year on year
New offices opened in Sao Paulo, Doha and Antwerp
Strong financial position with net cash of circa 47m at period end

Group gross profit achieved in the period increased by 23%* year on year to circa 90m (10: 74.3m). UK gross profit increased by 9% and non-UK gross profit increased by 34%*. Non-UK now represents 63% of gross profit (10 full year: 60%). Permanent gross profit increased by 34%* and Contract gross profit increased by 15%*. In the period, Permanent represented 50% of gross profit (10 full year: 49%).

During the period SThree made a total of 3,450** permanent placements, an increase of 21% over the prior year (10: 2,842**), with an accompanying increase in the Group average placement fee. At the end of the period SThree had 4,381 active contractors, an increase of 11% year on year (10: 3,952) and an increase of 1% on the seasonal peak associated with the financial year end (28 November 10: 4,359). Average contractor gross profit per day rates have also improved.

During the period, UK permanent placements were up 6%** year on year, with improved fees. UK contract runners were up 5% year on year and UK gross profit per day rates remained strong.

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

The permanent deal pipeline currently indicates that the number of permanent deals agreed, with candidates due to start, is up by more than % year on year.

Group sales headcount at 29 May 11 was up 12% versus the year end and up 14% year on year. UK sales headcount was up 7% versus the year end position and up 10% year on year non-UK sales headcount was up 15% versus the year end position and up 17% year on year. The Group was actively seeking to fill an additional 190 live sales vacancies at the end of the period.

The Group had 55 offices at the end of the period, having opened new offices in Sao Paulo, Doha and Antwerp during the first half of 11 and has plans to open offices in Zurich, Luxembourg, and Chicago in the second half.

The Group remains in a strong cash position with net cash of circa 47m at 29 May 11 (10 year end: 55.2m).

Russell Clements, Chief Executive, commented: "The Group continued to make further progress during the first half, with Q2 gross profit up 27%* year on year, ahead of Q1 gross profit up 19%* year on year, despite progressively tougher comparatives. It is particularly pleasing to note that once again we have been able to grow both sales volumes and fee rates in line with our long term strategy.

"We continued to roll out new international offices during the period and plan to expand our global presence further through adding new locations during the second half of this year and beyond. In parallel we have also further expanded our teams in geographies in which we already have a well established market presence, in line with the improving market opportunity. Despite making these and other investments in the Group's future growth, our balance sheet remains strong, having finished the period with 47m of cash and no debt."


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