UK&I GP down 7% YoY in Q1 2019 for SThree
SThree plc has issued a trading update covering the period from 1st December 2018 to date; financial information relates to the quarter ended 28th February 2019.
Group GP for the year was up 9% to £78.1m with robust growth in Continental Europe up 12% (to £45.5m) and USA up 17% (to £16.4m). The growth in Continental Europe was driven by Benelux and DACH up 11% and 12% respectively. UK&I GP was down 7% (to £11.7m), although productivity in the region improved by 2%. ICT, engineering and energy delivered very good growth in the period.
Gary Elden, chief executive, commented, “We have made an encouraging start to the year, with robust Group GP growth in what is our seasonally least significant quarter.
“It is pleasing to see growth in both contract and permanent, with a particularly strong performance in Contract, driven by continued progress in our key markets, Continental Europe and the USA.
“Looking ahead, SThree will continue to invest in our teams to drive growth, consistent with our vision to be the number one STEM talent provider in the best STEM markets. Our focus on Contract and the continued strength of our performance across key regions and sectors provides resilience in today’s more turbulent market conditions. Set against this context, we remain confident in achieving good growth in the current year.”
Contract GP was up 12% (to £57.6m), with strong performances across ICT, life sciences, energy and engineering, and double-digit growth in all regions outside of UK&I. Continental Europe and USA combined now represent 79% of SThree’s contract GP (Q1 2018: 76%) in line with our strategy to focus on the world’s biggest STEM recruitment markets.
Permanent GP was up 1% to £20.5m, driven by DACH up 7% and Japan up 38%, both against tough comparatives. This progress was offset by USA which was down 1%, and by UK&I which, as expected, was down 16% reflecting the previously reported restructuring. Permanent productivity across the Group improved by 5% over last year, as a result of the Group’s strategy to focus on the best performing Permanent markets.
The planned relocation of the majority of SThree’s London based central support functions to Glasgow is now complete, with the expected benefits now being realised.
SThree remains in a strong financial position. Net debt at 28th February 2019 was circa £12m (28th February 2018: Net debt £2m). The group has a £50m revolving credit facility ("RCF") with HSBC and Citibank, which is committed to 2023.
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