Half Year Trading Update

RNS Number : 9437E

SThree plc

08 June 2012

 



8 June 2012

Half Year Trading Update

SThree plc ("SThree" or the "Group"), the international specialist staffing business, is today issuing a trading update for the half year ended 27 May 2012.

Highlights:

·    Group gross profit up 12%* year on year

·    Permanent gross profit up 14%* year on year

·    Contract gross profit up 10%* year on year

·    Permanent deal pipeline volume level year on year (up 11% year on year at end of Q1  2012)

·    Growth rate in contract runners ahead of same period in 2011

·    Continued strong financial position with net cash of circa £30m at period end, prior to payment of the final dividend of 9.3p per share or circa £11m on 6 June 2012

Financial highlights - Group Gross profit
	H1 2012	H1 2011	H1 2012 YoY % Var*		Q1 2012 YoY % Var*	Q2 2012 YoY % Var*
Group	£99.9m	£90.0m	+12%		+15%	+9%
Permanent	£50.8m	£45.1m	+14%		+16%	+12%
Contract	£49.1m	£44.9m	+10%		+13%	+7%
UK&I	£34.8m	£34.1m	+2%		+1%	+3%
Non UK&I	£65.1m	£55.9m	+18%		+24%	+13%
	£99.9m	£90.0m	+12%		+15%	+9%
ICT	£55.5m	£54.1m	+4%		+10%	-1%
Non ICT	£44.4m	£35.9m	+24%		+22%	+27%
	£99.9m	£90.0m	+12%		+15%	+9%
Contract/Permanent Split
Permanent	51%	50%
Contract	49%	50%
	100%	100%
Geographical Split
UK&I	35%	38%
Non UK&I	65%	62%
	100%	100%
ICT / Non ICT Split
ICT	56%	60%
Non ICT	44%	40%
	100%	100%
* At constant currency

Operating Metrics
	H1 2012 Number	H1 2011 Number	H1 2012 YoY % Var		Q1 2012 YoY % Var	Q2 2012 YoY % Var
Permanent Placements **
UK&I			-4%		-4%	-5%
Non UK&I			+8%		+9%	+7%
Group	3,572	3,450	+4%		+4%	+3%
Contract Runners***
UK&I			-2%		-1%	-2%
Non UK&I			+21%		+14%	+21%
Group	4,757	4,381	+9%		+6%	+9%
** Excludes Retainers
*** Period end number of contractors onsite with clients and being billed

Average placement fees for the half year have grown strongly year on year, despite continuing weakness in the global banking and finance market, with particularly strong performances from Energy & Resources and Pharmaceuticals & Biotechnology. Average contractor gross profit per day rates remained strong during the period.

Group sales headcount at 27 May 2012 was down 2% versus the year end, and up 15% year on year. UK sales headcount was down 9% versus year end and down 4% year on year, and non-UK sales headcount was up 2% versus year end and up 27% year on year. Average sales headcount in the half year was up 24% year on year.

The permanent deal pipeline at the period end was level year on year, versus a 1% increase year on year at the year end and versus an 11% increase year on year at Q1 2012. Sequentially the deal pipeline is up 16% versus Q1 2012, and the value of the pipeline is up 6% year on year.

The Group opened offices in Oslo, San Diego, Rio de Janeiro and Brisbane during the period, taking the total to 64 offices in 18 countries.

The Group remains in a strong cash position with net cash of circa £30m at 27 May 2012. This is after the Group paid circa £20m as a special and interim dividend in December 2011 and before payment of the final dividend of 9.3p per share or circa £11m on 6 June 2012.

Russell Clements, Chief Executive, commented:

"The Group has traded satisfactorily in the half year, given the deteriorating macro economic situation during the second quarter. Given the latter we have seen a slowing of the rate of growth in gross profit in Q2 versus Q1 but nonetheless gross profit in Q2 was 9% ahead of the same period last year. Pleasingly, we once again performed robustly in terms of the value of the business written up with strong improvements in average permanent fees.

"Demand in certain sectors such as Energy & Resources remains strong but in overall terms the market is becoming more challenging. In this respect we see our balanced business mix between contract and permanent as a strength given that contract tends to be relatively more resilient in weaker market conditions. We remain cash rich and debt free and reiterate our commitment to both further investment in the medium term potential of the Group and to our dividend policy. Our experienced management team has seen all possible market conditions over the last few years and has always proven itself up to the challenge."   

SThree is hosting an analyst conference call today at 0830 BST. The details are as follows:

Telephone number:  [phone]

For access to the call please quote Confirmation Code:  6980481

The Group will issue its interim results for the half year ended 27 May 2012 on 16 July 2012.

* at constant currency

** excludes retained business 

- Ends -

Enquiries:
SThree plc	020 7268 6000
Russell Clements, Chief Executive Officer
Alex Smith, Chief Financial Officer
Sarah Anderson, Deputy Company Secretary/IR enquiries
Citigate Dewe Rogerson	020 7638 9571
Kevin Smith/Nicola Swift

Notes to editors

SThree is a leading international specialist staffing businesses, providing permanent and contract specialist staff to a diverse client base of over 7,000 clients. From its well-established position as a major player in the information and communications technology ("ICT") sector the Group has broadened the base of its operations to include businesses serving Banking, Engineering & Energy, Pharmaceuticals & Biotechnology, Accountancy and Job Board sectors.

Since launching its original business, Computer Futures, in 1986, the Group has adopted a multi-brand strategy, establishing new operations to address growth opportunities. SThree brands include Computer Futures, Huxley Associates, Progressive and The Real Staffing Group. The Group has circa 2,300 employees in eighteen countries.

SThree plc is quoted on the Official List of the UK Listing Authority under the ticker symbol STHR and also has a US level one ADR facility, symbol SERTY.

Important notice

Certain statements in this announcement are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by those statements. Forward looking statements regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. Certain data from the announcement is sourced from unaudited internal management information. Accordingly, undue reliance should not be placed on forward looking statements.

 

END

 

 

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