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SThree GP up 11%

SThree plc ("SThree" or the "Group"), the international STEM+ specialist staffing business, is today issuing a trading update for the half year ended 31 May 2018.


Gary Elden, Chief Executive, commented:

"We are pleased to have delivered an encouraging first half performance, with our Continental Europe and USA businesses, in particular, showing strong growth through the second quarter.


"Our Contract business continues to grow robustly across all sectors, with Continental Europe and the USA both delivering double digit growth in GP.


"'Permanent achieved an improved performance during the first half, driven primarily by Continental Europe but also by our small and fast-growing business in Japan.


"We are continuing to invest in headcount in our high performing teams, consistent with our vision to be the number one STEM talent provider in the best STEM markets.  We remain on track with the delivery of our five-year growth strategy which we outlined at the Capital Markets Day in November 2017. 


"Looking ahead, the continued momentum of our Contract business and improved Permanent yields leaves us well-positioned for the second half and our expectations for the full year remain unchanged."


Group gross profit ("GP") increased by 11%* YoY, with Q2 up 13%* after growth of 8%* in Q1.


Contract continues to deliver a strong performance with GP up 14%* and Q2 up 16%*. A significant proportion of the growth in Contract at the half year was driven by Continental Europe, up 21%*, underpinned by the USA up 16%*. Group contract runners** were up by 11%, with Continental Europe up 23% and the other regions broadly level year on year.


Performance in Permanent was pleasing with GP up 4%* (Q2: +7%*), with average sales headcount up 1%. Performance was driven by Continental Europe up 9%* and Japan up 70%*. Permanent productivity improved by 3%* in the first half.


Overall, period end sales headcount was up 6% YoY, with Permanent down 4% and Contract up 12%.


Average Group sales headcount was up 10% YoY with Continental Europe up 18%, USA up 14% and UK&I down 5%. Average Permanent headcount was up 1% and average Contract headcount was up 16%.  Contract sales headcount represented 68% of total sales headcount at period end (2017: 64%).


The Group has a network of 43 offices in 16 countries, of which 37 are outside the UK. The Group generated 82% of Gross Profit for the period from markets outside the UK&I (2017: 80%).


Net debt at 31 May 2018 was £6.2m (31 May 2017: Net Cash of £5.0m). The Group has a £50m revolving credit facility ("RCF") with Citibank and HSBC, which is committed to 2023.

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