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SThree announce year end results

Operational Highlights

&middot     Group performance improved as the year progressed against a backdrop of weaker macroeconomic conditions

&middot     Further progress made against key strategic priorities - Contract, ongoing sector diversification and international expansion

&middot     Contract GP grew by 4%** year on year, with Contract now accounting for 56%** of Group GP (2012: 51%)

&middot     Non-UK&I share of GP increased to 69% (2012: 67%) as the Group's business mix underwent a further shift in favour of our international operations

&middot     Continued sector diversification with non-ICT disciplines now representing 57% (2012: 54%)

&middot     Strong performance from newer sectors. Energy (9.3%**) and Life Sciences (18.3%**) now representing 27% of GP (2012: 22%)

&middot     New offices opened in Calgary, Tokyo and Berlin, bringing the Group total to 55 in 21 countries, of which 40 are outside the UK

&middot     Disposal of ITJB, a small non-core business, in July 2013 for an initial cash consideration of &pound9.2m, a further &pound0.5m receivable in 2014 and a further &pound2.5m contingent on the performance of ITJB in FY 2014

&middot     Restructuring of the Group's cost base brought savings of circa &pound3.2m in H2 2013 and reduces annualised costs by circa &pound8.5m pa

&middot     Group headcount at year end increased by 10% to 2,327 (2012: 2,116) although average headcount at 2,228 was flatyear on year (2012: 2,234)

&middot     The Group retains a strong balance sheet position, with year end net cash of &pound8.7m (2012: &pound28.3m), after the dividend payment of &pound16.9m and capital expenditure of &pound5.6m.

**at constant currency

Financial Highlights

As Reported

Like-for-like (LFL)

LFL

53
weeks

52
weeks

52
weeks

52
weeks

2013

2012

2013

2012*

52
 week

&poundm

&poundm

&poundm

&poundm

 change

Revenue

634.3

577.5

618.4

571.6

8.2%

Gross profit ('GP')

199.8

205.3

192.8

199.5

-3.4%

Operating profit before exceptional items

21.2

25.1

21.0

25.1

-16.3%

    Restructuring costs

(10.8)

-

-

-

-

    Gain on disposal of ITJB

5.3

-

-

-

-

Operating profit after exceptional items

15.7

25.1

n/a

n/a

n/a

Profit before taxation before exceptional items

21.0

25.3

20.8

25.3

-17.8%

Profit after taxation before exceptional items

11.1

16.8

11.1

16.8

-33.9%

Basic earnings per share before exceptional items

9.1p

14.1p

9.1p

14.1p

-35.5%

Proposed final dividend

9.3p

9.3p

9.3p

9.3p

-

Total dividend (interim plus final)

14.0p

14.0p

14.0p

14.0p

-

* 2012 reported figures excluding ITJB

Gary Elden, CEO, commented, "While the Group performance reflects the mixed market conditions which we encountered during the year, it was also a period of significant strategic progress during which we laid the foundations for our future growth.

"Contract gross profit grew robustly reflecting our recent investment in headcount. In Permanent, which is now beginning to demonstrate the first signs of recovery, we have addressed the headcount shortfall that became evident in the first half and enter 2014 with the business appropriately resourced.

"During the year, we strengthened our organisational structure with the appointment of sector heads and Regional CEOs for the Americas and Asia Pacific & the Middle East. Other key developments included our investment in the new Contract business structures necessary to build long term client relationships in high growth sectors such as Energy and Life Sciences and the rationalisation of our cost base.  Having completed this essential preparatory work we are now able to fully focus on executing our growth plans in 2014.

"We are trading in markets that are at different stages of the cycle - growing, stable or still in decline - and, while improved sentiment is clearly evident in certain markets, on balance, it is still too early to call a broadly-based recovery.  As we look forward, our niche specialist focus, experienced management team and strong financial position give us confidence that we will make the best of the market opportunity in 2014."

The current period results comprise 53 weeks and include both the costs of the mid year restructuring of the business and the disposal of the IT Job Board business ("ITJB"). For comparison purposes, 52 week data before exceptional items is disclosed where relevant and the results of the ITJB have been removed from the current Like For Like ("LFL") and prior year figures.

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