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SThree confirms gross profit up 11% at Y/E 2015

SThree plc has released its final results for the year ended 30th November 2015, confirming good profit across all its sectors, except energy.

 

Highlights

 

2015

2014(2)

Variance

 

Adjusted(1)

As reported(2)

 

Adjusted

As reported

 

£m

£m

£m

%

%

Revenue

848.8

848.8

746.9

+17%*

+14%

Gross profit

235.7

235.7

218.2

+11%*

+8%

Operating profit

41.5

38.4

29.8

+39%

+29%

Profit before taxation

40.8

37.7

29.3

+39%

+29%

Basic earnings per share

23.2p

20.8p

16.3p

+42%

+28%

Proposed final dividend

9.3p

9.3p

9.3p

-

-

Total dividend (interim and final)

14.0p

14.0p

14.0p

-

-

Operating profit conversion ratio

17.6%

16.3%

13.7%

+3.9% pts

+2.6% pts

(1)Adjusted for the impact of £3.1m of costs in relation to the restructuring of the Energy business and the impairment and accelerated amortisation of certain IT assets.

(2) The figures presented above exclude the impact of exceptional items (2015: pre-tax income £0.4m, 2014: pre-tax net costs £5.3m).

 

The Group reported a strong full year performance with excellent operating profit growth and an improved cash performance. Adjusted operating profit is up 39% year on year ("YoY") to £41.5m (2014: £29.8m) with adjusted operating profit conversion ratio up 3.9% points to 17.6% (2014: 13.7%)

 

Group gross profit ("GP") is up 11%* YoY and ahead by 17%* excluding Energy. There is continued strong growth across ICT (+19%* YoY) and Life Sciences (+20%* YoY) offsetting weak performance in Energy (-19%* YoY).

 

There is continued strong performance in the Americas (+26%* YoY), now representing 19% of Group GP (2014: 15%). Contract GP is up 17%* YoY and ahead by 21%* excluding energy.

 

Continued strong growth in contractor runners is up 11% YoY to 8,412 at year-end (2014: 7,573), giving a strong platform for 2016. Contract now accounts for 64% of Group GP (2014: 61%)

 

Permanent GP is up 3%* YoY; with Permanent GP excluding energy up 11%* YoY.

 

Group year-end sales headcount up 8% YoY at 2,244 (2014: 2,081) and average sales headcount up 6% YoY at 2,117 (2014:  2,002) driven by increased Contract and reduced Permanent heads

 

Gary Elden, chief executive officer, commented, "Our strong 2015 performance demonstrates the benefits of the geographic and sectoral diversity of our operations.  GP growth of 11%* year on year has been converted into an excellent growth in adjusted operating profit of 39%, with performances from our ICT and Life Sciences businesses being particularly pleasing.

 

"Our Contract business performed strongly, with Contract GP increasing by 17%* year on year and enters the year in good shape with a record Contract book.

 

"Our Americas business produced another excellent performance with GP up by 26%* year on year driven by growth in ICT, Life Sciences and Banking & Finance. Our US growth prospects are exciting and we are continuing to invest for the future adding further space in New York and new offices in Austin and Minneapolis during H1 2016.

 

"While the trading environment remains broadly positive in the majority of our territories, we note that the global macro-economic uncertainties we identified in our last trading update have increased further recently, with greater risks to global growth. Oil & gas market conditions remain challenging and FX volatility persists.

 

"Against this backdrop, we will continue to invest selectively in our high performing teams around the world to grow our business and capitalise on market opportunities, especially in Contract, ICT, Life Sciences and the Americas. The expanded Contract book, combined with increased investment in our Contract infrastructure and teams give us a strong base from which to grow in the coming years."

 

Connor Campbell, senior market analyst at www.spreadex.com, said, "Bucking the day’s bearish trend, global recruitment firm SThree has had a rather successful Monday, jumping over 2% to recover some of its recent losses after the company announced impressive increases in both full year revenue (from £746.9 million to £848.8 million) and pre-tax profit (from £29.3 million to £37.7 million). The cherry on top was news that the company was expanding its presence in New York, as well as opening new offices in both Austin and Minneapolis."

 

 

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