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SThree plc Q1 Interim Management Statement

SThree plc 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 28 November 2011 to date financial information relates to the quarter ended 26 February 2012.

Highlights:

&middot Group gross profit up 15%* year on year (up 12%* in Q4 2011)

&middot Permanent gross profit up 16%* year on year (up 14%* in Q4 2011)

&middot Contract gross profit up 13%* year on year (up 9%* in Q4 2011)

&middot Permanent deal pipeline volume up 11% year on year (up 1% at year end 2011)

&middot Seasonal recovery in contract runners tracking broadly in line with 2011

&middot Strong financial position with net cash of circa &pound30m at period end after payment of interim and special dividend of c&pound20m in early December 2011

Financial Highlights - Group Gross Profit

Q1
2012

Q1
2011

Q1
2012
yoy % Var*

Q4
2011
yoy % Var*

Group

&pound47.7m

&pound41.7m

15%

12%

Permanent

&pound24.1m

&pound20.9m

16%

14%

Contract

&pound23.6m

&pound20.8m

13%

9%

&pound47.7m

&pound41.7m

15%

12%

UK&I

&pound16.7m

&pound16.5m

1%

-7%

Non UK&I

&pound31.0m

&pound25.2m

24%

24%

&pound47.7m

&pound41.7m

15%

12%

Permanent/Contract Split

Permanent

51%

50%

Contract

49%

50%

100%

100%

Geographical Split

UK&I

35%

40%

Non UK&I

65%

60%

100%

100%

ICT/Non ICT Split

ICT

57%

59%

Non ICT

43%

41%

100%

100%

* At constant currency

Operating Metrics

Q1
2012
Number

Q1
2011
Number

Q1
2012
yoy % Var

Q4
2011
yoy % Var

Permanent Placements**

1,674

1,604

4%

3%

UK&I

-4%

-11%

Non UK&I

9%

12%

Group

4%

3%

Contract Runners***

4,461

4,207

6%

8%

UK&I

-1%

1%

Non UK&I

14%

15%

Group

6%

8%

** Excluding retainers
*** Period end number of contractors on site with clients and being billed

Average placement fees for the quarter have grown strongly year on year, despite continuing weakness in the global banking and finance market, with particularly strong performances from Energy and Pharmaceuticals & Biotechnology. Average contractor gross profit per day rates also strengthened year on year during the quarter.

Group sales headcount at 26 February 2012 was broadly level versus the year end, and up 27% year on year. UK sales headcount was up 8% year on year, but down 4% quarter on quarter, and non-UK sales headcount was up 40% year on year, and up 2% quarter on quarter. Average sales headcount in the quarter was up 29% year on year.

The current permanent deal pipeline shows an increase of 11% year on year, versus a 1% increase at the year end.

The Group opened offices in Oslo and San Diego during the quarter, taking the total to 62 offices in 18 countries.

The Group remains in a strong cash position with net cash of circa &pound30m at 26 February 2012.

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 pleasing to note that our gross profit growth year on year has improved in Q1 2012 compared to Q4 2011. We are also reassured by our permanent deal pipeline, with deals agreed but yet to start up by 11% year on year. In addition, the normal seasonal recovery in contract runners is following a similar shape to 2011.

"There remain significant differences within both geographies and sectors in the demand for the Group's services but, overall, market conditions remain in far better shape than we saw in the aftermath of the global financial crisis. We are a cash rich and agile business, with a twenty five year track record of profitability and a seasoned management team. As such, we are well placed to maximise the potential of whatever market conditions prevail in 2012."

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