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SThree group gross profit up 17% YoY

Group sales headcount in line with the year end position and up 6% year on year

Excellent performance in the Americas (up 38%* year on year), now representing 17% of Group gross profit

ICT our strongest performing sector up 22%* year on year, driven by a strong performance across all regions, Life Sciences up 17%* year on year and Banking up 8%* year on year

Energy gross profit up 14%* year on year, but with deal activity sharply down year on year in Q1, as expected

Profitability enhanced by improved productivity and cost base restructuring implemented over the last two financial years    

Net debt of circa &pound25m (&pound9.9m at year end)

Gary Elden, chief executive, commented, "Overall, we've made a pleasing start to the year, trading in line with our expectations in what is our seasonally least significant quarter.  Our investment in Contract and our drive to rebuild productivity in Permanent is continuing to have a positive impact on Group performance.

"This first quarter outcome demonstrates the inherent strength of SThree's long-established strategy of remaining well-diversified by geography and by sector, with strong growth in ICT, Life Sciences and the Americas helping to offset the weakness in Energy during the period.

"Looking ahead, the expanded Contract book and solid Permanent performance give us a strong base from which to grow this year.  While the outlook for Energy is more challenging and Eurozone uncertainty persists, we have made a good start to 2015 and remain confident that there are significant growth opportunities for us this year across the diverse geographies and sectors that we serve."

Key Metrics & Commentary

With effect from the beginning of the current financial year, SThree will be reporting quarterly on a three month calendar basis, replacing the thirteen week quarter basis previously adopted.  This change is being implemented to improve comparability of periods and avoid the need for 53 week "rebasing" years such as 2013.  

Financial highlights - Group

 

 

 

Group Gross Profit

 

 

 

 

 

Q1 2015

Q4 2014

Q3 2014

Q2 2014

Q1 2014

Gross Profit

Q1 2015

Q1 2014 1

YoY % 1

YoY % 2

YoY % 2

YoY % 2

YoY % 2

 

 

 

 

Contract

&pound34.9m

&pound29.0m

24%

36%

28%

26%

18%

Permanent

&pound18.6m

&pound18.8m

6%

16%

6%

7%

-4%

Group

&pound53.5m

&pound47.8m

17%

27%

18%

18%

9%

 

 

 

 

UK&I

&pound15.9m

&pound14.2m

13%

23%

9%

10%

1%

Continental Europe

&pound24.2m

&pound23.3m

14%

18%

12%

12%

4%

Americas

&pound9.0m

&pound6.2m

38%

90%

75%

74%

49%

Asia Pac & Middle East

&pound4.4m

&pound4.1m

16%

12%

11%

12%

13%

Group

&pound53.5m

&pound47.8m

17%

27%

18%

18%

9%

 

 

 

 

ICT

&pound22.2m

&pound19.1m

22%

22%

8%

2%

-5%

Non ICT

&pound31.4m

&pound28.7m

11%

31%

26%

31%

20%

Group

&pound53.5m

&pound47.8m

17%

27%

18%

18%

9%

 

 

 

 

Contract / Permanent Split

 

 

 

 

Contract

65%

61%

 

 

 

Permanent

35%

39%

 

 

 

100%

100%

 

 

 

 

 

 

 

Geographical Split

 

 

 

 

UK&I

30%

30%

 

 

 

Continental Europe

45%

49%

 

 

 

Americas

17%

13%

 

 

 

Asia Pac & Middle East

8%

8%

 

 

 

100%

100%

 

 

 

 

 

 

 

Sector Split

 

 

 

 

ICT

41%

40%

 

 

 

Non ICT

59%

60%

 

 

 

100%

100%

 

 

 

 

 

 

 

 

Q1 2015

Q4 2014

Q3 2014

Q2 2014

Q1 2014

Operating Metrics

Q1 2015

Q1 2014 1

YoY % Var

YoY % Var

YoY % Var

YoY % Var

YoY % Var

 

 

 

 

Contract Runners 3

 

 

 

 

UK&I

2,893

2,576

12%

16%

17%

14%

8%

Continental Europe

3,070

2,412

27%

24%

20%

17%

10%

Americas

1,049

605

73%

97%

110%

130%

96%

Asia Pac & Middle East

397

260

53%

104%

73%

64%

67%

Group

7,409

5,853

27%

31%

29%

26%

16%

 

 

 

 

Permanent Placements 4

 

 

 

 

UK&I

410

346

17%

25%

-11%

-4%

-15%

Continental Europe

621

665

0%

4%

-11%

-12%

-13%

Americas

156

153

6%

60%

61%

67%

23%

Asia Pac & Middle East

235

270

-12%

2%

-4%

17%

33%

Group

1,422

1,434

3%

15%

-2%

1%

-4%

 

 

 

 

 

 

 

 

1 Prior year numbers are on a 4/4/5 week basis, variances at constant currency are calculated against restated numbers on a calendar month basis

2 At constant currency

 

 

 

 

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

4 Excludes Retainers

 

 

 

 

 

 

 

 

 

Q1 Group gross profit ("GP") increased by 17%* year on year.

Contract performed strongly in the period, with GP up 24%* year on year.  The Group saw a strong seasonal recovery in contract runners, which were up 27% year on year at period end and down only 2% since the traditional year end peak. Average contractor gross profit per day rates excluding Energy remained robust during the period.

Permanent GP was up 6%* year on year. UK&I was up 16%* year on year, Continental Europe up 2%* year on year, Americas up 13%* year on year and Asia Pacific & Middle East up 3%* year on year. Average permanent placement fees remained robust. The Permanent deal pipeline volume was up 5% year on year and up 12% excluding Energy.

Group sales headcount at 28 February 2015 was up 6% year on year. UK&I sales headcount was up 6% year on year, Continental Europe sales headcount was up 2%, Americas sales headcount was up 36% and Asia Pacific & Middle East sales headcount was down 6%. Consultant headcount continued to remix slightly towards Contract during the quarter, with Contract consultant numbers up 14% and Permanent consultant headcount down 3% year on year. Average consultant headcount was up 8% year on year, with Contract consultant average headcount up 16% and Permanent consultant average headcount down 1%.

The Group has a network of 44 offices in 18 countries, of which 32 are outside the UK. The Group generated 70% of its GP for the period from markets outside UK&I (2014: 70%). 

SThree remains in a strong financial position. Net debt at 28 February 2015 was circa &pound25m. The Group has a &pound50m revolving credit facility ("RCF") with RBS and HSBC, which is committed to 2019.

* at constant currency and prior year restated to a calendar month basis

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