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SThree plc Announce Half Year Interim Results

SThree plc Announce Half Year Interim Results

SThree, the international specialist staffing business, has announced its interim results for the half year ended 27 May 2012.

Financial Highlights

Six months ended

27 May 2012

29 May 2011

% change

Revenue

&pound278.4m

&pound254.9m

9.2%

Gross profit

&pound99.9m

&pound90.0m

11.0%

Operating profit

&pound9.1m

&pound11.0m

-16.7%

Profit before taxation

&pound9.3m

&pound11.2m

-16.9%

Basic earnings per share

5.2p

6.2p

-16.1%

Interim dividend per share

4.7p

4.7p

-

Operational Highlights

&middot Satisfactory first half performance with Gross Profit (GP) up 11.0% year on year ("YoY") to &pound99.9m (H1 2011: &pound90.0m). Like for like ("LFL") GP up 12.2%.

&middot Profit before tax reduced by 16.9% to &pound9.3m (H1 2011: &pound11.2m) reflecting costs of expanding the international network and relative immaturity of newer international teams which are yet to achieve full productivity.

&middot Permanent placements up by 3.5% to 3,572 (H1 2011: 3,450) - average Permanent placement fee up 8.2% LFL to a record &pound13,712 (H1 2011: &pound12,672).

&middot Number of active contractors at period end up by 8.6% YoY to 4,757 (H1 2011: 4,381) - average GP per day rates increased by 2.2% LFL to &pound87.88 (H1 2011: &pound86.03). Average Contract margin achieved of 21.6% (H1 2011: 21.4%).

&middot Permanent versus Contract mix of GP now 51:49 in favour of Permanent (FY 2011: 52:48).

&middot Non-UK&I GP for the period represented 66% of the Group total (FY 2011: 63%).

&middot Rest of World (excluding UK and Europe) GP grew to 16% of mix (FY 2011:13%), up 42% LFL.

&middot Non-ICT business segments grew by 24% YoY LFL, now representing 44% of total GP (FY 2011: 40%).

&middot Sales headcount up 14.8% YoY and down 2.2% versus year end 2011 position, as certain of the Group's markets have right sized to match macroeconomic conditions. Average sales headcount up 24% YoY, reflecting the impact of hiring that took place largely in H2 2011.

&middot New offices opened in Oslo, San Diego, Rio de Janeiro and Brisbane.

&middot Net cash position remains strong at &pound31.0m (FY 2011: &pound55.6m), after payment of a special dividend of &pound13.2m in December 2011.

&middot Management succession plan initiated - Gary Elden to succeed Russell Clements as CEO in 2013 and other Board level appointments made.

Russell Clements, Chief Executive Officer, said: "The Group traded satisfactorily and in line with management's expectations in the first half, particularly given the deterioration in the macro-economic situation seen during the second quarter. Despite this softening in demand, overall GP grew by 11% to &pound99.9m and, once again, our discipline on deal values was rewarded with strong improvements in average permanent fees and a robust performance in terms of contract day rates.

Against a background of continuing solid demand, both Engineering & Energy and Pharmaceuticals & Biotechnology are making an increasingly significant contribution to Group performance, and this trend is mirrored in our more recent international office openings, including those in Oslo, San Diego, Rio de Janeiro and Brisbane.

Looking ahead, in our seasonally more important second half we see the Group's balanced business model and in particular its significant presence in Contract as an undoubted strength in these more difficult trading conditions. Our strong net cash position will allow us to continue to invest in the Group's future growth while also underpinning our commitment to a robust dividend policy. With a seasoned and strengthened senior management team, we look forward to the future confident that we can optimise our performance whatever the prevailing market opportunity."

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