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SThree plc Performs Robustly

SThree plc Performs Robustly

SThree plc  the international specialist staffing business, is today issuing an Interim Management Statement for the period from 27 May 2012 to date. The financial data relates to the three month period ending 26 August 2012, being the third quarter of the financial year ending 25 November 2012.

Highlights:
&middot Group gross profit up 6%* year on year
&middot Contract gross profit up 10%* year on year
&middot Permanent gross profit up 2%* year on year
&middot Permanent deal pipeline volume level year on year
&middot Growth rate in contract runners ahead of same period in 2011&middot Continued strong financial position with net cash of circa &pound17m at period end, after payment of the final dividend of 9.3p per share (circa &pound11m) on 6 June 2012

Financial highlights - Group gross profit

Q3 2012

Q3 2011

Q3 2012 YoY % CC*

Q1 2012 YoY % CC*

Q2 2012 YoY % CC*

Group

&pound51.3m

&pound50.2m

6%

15%

9%

Permanent

&pound25.6m

&pound26.0m

2%

16%

12%

Contract

&pound25.6m

&pound24.3m

10%

13%

7%

UK&I

&pound17.7m

&pound18.9m

-6%

1%

3%

Non UK&I

&pound33.6m

&pound31.3m

13%

24%

13%

&pound51.3m

&pound50.2m

6%

15%

9%

ICT

&pound26.9m

&pound30.5m

-8%

10%

-1%

Non ICT

&pound24.4m

&pound19.7m

27%

22%

27%

&pound51.3m

&pound50.2m

6%

15%

9%

Contract / Permanent Split

Permanent

50%

52%

Contract

50%

48%

100%

100%

Geographical Split

UK&I

35%

38%

Non UK&I

65%

62%

100%

100%

ICT / Non ICT Split

ICT

52%

61%

Non ICT

48%

39%

100%

100%

*At Constant Currency

 

Operating metrics

Q3 2012

Number

Q3 2011

Number

Q3 2012 YoY % Var

Q1 2012 YoY % Var

Q2 2012 YoY % Var

Permanent Placements **

UK&I

-12%

-4%

-5%

Non UK&I

2%

9%

7%

Group

1,832

1,895

-3%

4%

3%

Contract Runners ***

UK&I

4%

-1%

-2%

Non UK&I

20%

14%

21%

Group

4,998

4,474

12%

6%

9%

** Excludes Retainers

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

Contract performed encouragingly in the period, with strong growth in gross profit in Europe (12%) and Rest of World (94%), offsetting a small decline of 2% in UK. The number of contract runners at the end of Q3 was up 7% versus the start of 2012. This compares to an increase of 3% at the end of Q3 2011, indicating a stronger seasonal recovery and run rate into the final quarter of this year.

Average permanent placement fees for the quarter grew robustly year on year, despite continuing weakness in the global banking and finance market which typically generates higher than average fees. Particularly strong performances were seen from Energy & Resources and Pharmaceuticals & Biotechnology. Average contractor gross profit per day rates remained strong during the period.

Group sales headcount at 26 August 2012 was down 6% versus the year end, and level year on year. UK sales headcount was down 16% versus year end and down 17% year on year. Non-UK sales headcount was level versus year end and up 10% year on year. Average sales headcount in the quarter was up 4% year on year.

The permanent deal pipeline at the period end was broadly level year on year (Q2 period end: level) and sequentially up 6% versus Q2 period end.

The Group finished the quarter with 64 offices in 18 countries, of which 42 were outside the UK. Non UK&I now represents 65% of gross profit (2011: 62%).

Russell Clements, Chief Executive, commented:

"The Group has traded satisfactorily in the third quarter, given the difficult macro economic backdrop. Understandably, this was reflected in a slowing of the rate of growth in gross profit in Q3 versus Q2 but nonetheless gross profit in Q3 was 6% ahead of the same period last year. Once again we performed robustly in terms of the value of the business written up, both in terms of average permanent fees and contract day rates.

"Demand in sectors such as Energy & Resources and Pharmaceuticals & Biotechnology remained strong and these businesses continued to increase their contribution to the Group result. We were particularly pleased with the performance of our contract division which, as expected, performed more resiliently than permanent in the more uncertain economic environment. Given that contract makes up half of the Group's business, this positions us well to optimise our performance against current market conditions, as does the fact that 65% of the business is generated outside of the UK&I.

"Our balance sheet remains strong, and we are a cash generative, debt-free business. This strength allows us to continue to make selective investments for the future whilst remaining committed to maintaining our strong track record in terms of our dividend."

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