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SThree plc Remains Robust

SThree plc Remains Robust

SThree plc has issued a trading update for the half year ended 27 May 2012.

Highlights:

&middot Group gross profit up 12%* year on year

&middot Permanent gross profit up 14%* year on year

&middot Contract gross profit up 10%* year on year

&middot Permanent deal pipeline volume level year on year (up 11% year on year at end of Q1 2012)

&middot Growth rate in contract runners ahead of same period in 2011

&middot Continued strong financial position with net cash of circa &pound30m at period end, prior to payment of the final dividend of 9.3p per share or circa &pound11m on 6 June 2012

 

Financial highlights - Group Gross profit

H1 2012

H1 2011

H1 2012
YoY % Var*

Q1 2012
YoY % Var*

Q2 2012
YoY % Var*

Group

&pound99.9m

&pound90.0m

12%

15%

9%

Permanent

&pound50.8m

&pound45.1m

14%

16%

12%

Contract

&pound49.1m

&pound44.9m

10%

13%

7%

UK&I

&pound34.8m

&pound34.1m

2%

1%

3%

Non UK&I

&pound65.1m

&pound55.9m

18%

24%

13%

&pound99.9m

&pound90.0m

12%

15%

9%

ICT

&pound55.5m

&pound54.1m

4%

10%

-1%

Non ICT

&pound44.4m

&pound35.9m

24%

22%

27%

&pound99.9m

&pound90.0m

12%

15%

9%

Contract/Permanent Split

Permanent

51%

50%

Contract

49%

50%

100%

100%

Geographical Split

UK&I

35%

38%

Non UK&I

65%

62%

100%

100%

ICT / Non ICT Split

ICT

56%

60%

Non ICT

44%

40%

100%

100%

* At constant currency

 

Operating Metrics

H1 2012
Number

H1 2011
Number

H1 2012
YoY % Var

Q1 2012
YoY % Var

Q2 2012
YoY % Var

Permanent Placements **

UK&I

-4%

-4%

-5%

Non UK&I

8%

9%

7%

Group

3,572

3,450

4%

4%

3%

Contract Runners***

UK&I

-2%

-1%

-2%

Non UK&I

21%

14%

21%

Group

4,757

4,381

9%

6%

9%

** Excludes Retainers

*** Period end number of contractors onsite with clients and being billed

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

Group sales headcount at 27 May 2012 was down 2% versus the year end, and up 15% year on year. UK sales headcount was down 9% versus year end and down 4% year on year, and non-UK sales headcount was up 2% versus year end and up 27% year on year. Average sales headcount in the half year was up 24% year on year.

The permanent deal pipeline at the period end was level year on year, versus a 1% increase year on year at the year end and versus an 11% increase year on year at Q1 2012. Sequentially the deal pipeline is up 16% versus Q1 2012, and the value of the pipeline is up 6% year on year.

The Group opened offices in Oslo, San Diego, Rio de Janeiro and Brisbane during the period, taking the total to 64 offices in 18 countries.

The Group remains in a strong cash position with net cash of circa &pound30m at 27 May 2012. This is after the Group paid circa &pound20m as a special and interim dividend in December 2011 and before payment of the final dividend of 9.3p per share or circa &pound11m on 6 June 2012.

Russell Clements, Chief Executive, commented:

"The Group has traded satisfactorily in the half year, given the deteriorating macro economic situation during the second quarter. Given the latter we have seen a slowing of the rate of growth in gross profit in Q2 versus Q1 but nonetheless gross profit in Q2 was 9% ahead of the same period last year. Pleasingly, we once again performed robustly in terms of the value of the business written up with strong improvements in average permanent fees.

"Demand in certain sectors such as Energy & Resources remains strong but in overall terms the market is becoming more challenging. In this respect we see our balanced business mix between contract and permanent as a strength given that contract tends to be relatively more resilient in weaker market conditions. We remain cash rich and debt free and reiterate our commitment to both further investment in the medium term potential of the Group and to our dividend policy. Our experienced management team has seen all possible market conditions over the last few years and has always proven itself up to the challenge."

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