REG-SThree SThree: Access to CCFF granted and further COVID-19 Update

SThreeAnnouncement

20/05/2020 07:05

============

   SThree (STEM)
   SThree: Access to CCFF granted and further COVID-19 Update

   20-May-2020 / 07:00 GMT/BST
   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

   ══════════════════════════════════════════════════════════════════════════

   20 May 2020

                                        

                                   SThree plc

                                        

               Access to CCFF granted and further COVID-19 Update

    

   SThree plc  ("SThree"  or  the  "Group"),  the  leading  global  pure-play
   specialist staffing  business focused  on  roles in  Science,  Technology,
   Engineering and  Mathematics  ('STEM'),  today issues  an  update  on  its
   financial position and operations.

    

   Strong financial position with access to significant liquidity

    

   The Group is pleased to announce  it has received confirmation that it  is
   eligible to  access  up to  £300  million of  funding  under the  Bank  of
   England's Covid Corporate Financing Facility (CCFF) to further  strengthen
   its financial position.  Of this,  the Board has  agreed, in  consultation
   with its existing RCF  lenders, that the CCFF  facility will be capped  at
   £50 million.

    

   This facility is  designed to  support liquidity among  larger firms  that
   make a material contribution  to the UK economy  and can demonstrate  they
   were in  sound  financial health  prior  to  the economic  impact  of  the
   COVID-19 pandemic.

    

   As detailed  in our  business  and trading  update  of 6th  April,  SThree
   continues to benefit from a strong  financial position. As at 18 May  2020
   the Group has total accessible  liquidity of £129.4 million. This is  made
   up of £24.4  million net cash, a  £50  million revolving  credit  facility
   ("RCF"), which has now been fully drawn down, a £5.0 million overdraft and
   £50 million from the CCFF (both  not yet drawn down). In addition,  SThree
   has a  £20 million  accordion facility  as well  as a substantial  working
   capital position reflecting net cash due to SThree for placements  already
   undertaken.

    

   Operating environment

    

   Demand in the short term, impacted  by global government responses to  the
   pandemic

    

   We are in the midst of a  health crisis and whilst governments across  the
   world are taking their next steps in response to the pandemic, uncertainty
   persists. The resultant  economic environment  has meant  the majority  of
   companies have  been  focused on  their  own immediate  challenges.  Those
   challenges are often specific to their sector, many even within particular
   niches, and sometimes distinct to each company. This has led to  aggregate
   demand for staffing being significantly  less than what would normally  be
   expected, with notable  spikes and  troughs across  different markets  and
   industries in the short term.

    

   Acceleration of long term secular trends

    

   The secular trends on which our business is focussed, flexible working and
   STEM, are  becoming more  evident  and we  believe these  will  accelerate
   significantly over the period ahead as noted by several global CEOs in the
   field.

    

   The enforced implementation of flexible working that we are now seeing  is
   likely to cause a  seismic shift in working  practices and cultures,  with
   many businesses  adopting  new  ways  of  operating  for  the  long  term.
   Alongside this,  in a  recent  SThree study1,  employers have  cited  that
   remote working  will help  to widen  their talent  pools where  there  are
   significant talent gaps.

    

   We believe a  crisis of  this nature  will ultimately  also drive  further
   acceleration of many  key STEM  trends over  the long  term. For  example,
   whilst many non-essential health procedures have been paused in the  short
   term, in the  future we see  greater investment in  health care  resulting
   from the crisis,  particularly digital and  data-led health  safeguarding,
   which will require key skills in  Life Sciences. In Engineering, there  is
   likely to be an  increased focus on the  resilience of infrastructure  and
   protection of  supply chains.  The  adoption of  Technology, AI  and  data
   science to problem solve  will become ever more  pervasive in business  as
   those that did not previously prioritise the "digital revolution"  rethink
   its potential impact on their businesses.

    

   Our continued response

    

   There has been  no time more  relevant for our  purpose: to bring  skilled
   people together to build the future.  Our scale and deep understanding  of
   STEM niches allows us  to continue to effectively  service our clients  in
   complex and fast moving  environments. We remain  focused on ensuring  our
   business is well placed  to benefit from the  acceleration of the  secular
   trends.

    

   Investing in the right markets in the right geographies

    

   At our Capital  Markets Day in  November 2019, we  talked about the  right
   markets in the right geographies and this  is key to our ability to  drive
   the business forward in the period  ahead. We began the period focused  on
   continuing  to  selectively  invest   in  our  business,  reflecting   our
   commitment to building the future, and we continue to believe that this is
   the right strategy for the future of our Group.

    

   As such, we are using our data  led approach to invest in specific  niches
   within sectors and markets  that are likely  to be key  in the future  and
   where we have an opportunity to  gain valuable market share, creating  new
   relationships as well as enhancing our existing ones. In those  industries
   that are pulling back,  we are supporting  our clients effectively  whilst
   rightsizing as appropriate.

    

   Using our scale and agility to deliver what clients need

    

   As the  world  adapts to  the  changes created  by  COVID-19, we  will  be
   operating in an environment that is  very different to what we have  known
   previously. As such, at SThree, we are focused on learning and evolving to
   operate better in this environment, utilising our agility and expertise to
   navigate a successful path and grow our market position for the long term.

    

   We have  the ability  to adapt  and  flex our  workforces to  continue  to
   provide what  our clients  need and  help them  to navigate  this  complex
   environment. We are investing in virtual interview and placement solutions
   and sharing knowledge of best practice across our global teams. As well as
   reinforcing our  relationships with  our clients,  this will  bolster  our
   market position now and into the future.

    

   Supporting our teams and candidates

    

   Our first priority  has been  to ensure the  safety and  wellbeing of  our
   teams.    We     are     also     working    hard     to     make     sure
   colleagues, contractors, candidates and clients are supported  effectively
   in this time, and that takes many different guises. Our teams have adapted
   well to home working and continue to service clients effectively. We would
   like to  take this  opportunity to  thank  them for  their hard  work  and
   contribution.

    

   For our colleagues we have created an internal 'Coronavirus Knowledge hub'
   with a  dedicated  space  and  materials  for  learning  and  development,
   including guidance on managing remote teams and guidance on remote working
   for our consultants. Alongside this we have accelerated investment in  our
   digital learning platform to provide learning on demand for all.

    

   For  candidates  we  have  created  dedicated  resources  on  our  digital
   platforms to ensure  that they are  supported, with information,  articles
   and guidelines on  remote working, how  to contact us  and other tips  for
   getting through COVID-19.  Illustrating the success  of these  programmes,
   our Net Promoter Score (NPS) from our candidates improved by seven  points
   and is now tracking at its highest  level over the last 12 months and  the
   results from candidate interviews were up 13 points.

    

   Notice of trading update

    

   In our H1 trading  update and interim results  announcement we will  share
   further detail  on current  trading  and how  adaptations are  being  made
   throughout the business in this current environment.

    

    

   1. SThree's customer insights research, May 2020

    

                                    - Ends -

    

    Enquiries:

                                                            

    
    SThree plc                           020 7268 6000
    Mark Dorman, Chief Executive Officer  
    Alex Smith, Chief Financial Officer   
    Steve Hornbuckle, Company Secretary
                                          
    
                                         020 3405 0205
    Alma PR
                                          
    Rebecca Sanders-Hewett

    Susie Hudson                         SThree@almapr.co.uk

    

    

    

   Notes to editors

    

   SThree is the  leading global pure-play  STEM staffing business  providing
   permanent and contract specialist staff to  a diverse client base of  over
   9,000 clients.

    

   The  Group's  operations   cover  the  Technology,   Banking  &   Finance,
   Engineering and Life  Sciences sectors. With  a multi-brand strategy,  the
   Group establishes new operations  to address growth opportunities.  SThree
   brands include Computer  Futures, Huxley Associates,  Progressive and  The
   Real Staffing  Group.  The  Group  has  a network  of  47  offices  in  16
   countries, of which  41 are  in our international(2)  markets, with  circa
   3,100 employees.

    

   SThree plc  is  quoted on  the  Official  List of  the  Financial  Conduct
   Authority under the ticker  symbol STEM 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  and  is before  any  exceptional  items.
   Accordingly, undue  reliance  should  not be  placed  on  forward  looking
   statements.

    

   ══════════════════════════════════════════════════════════════════════════

   ISIN:          GB00B0KM9T71
   Category Code: MSCH
   TIDM:          STEM
   LEI Code:      2138003NEBX5VRP3EX50
   Sequence No.:  64799
   EQS News ID:   1051267


    
   End of Announcement EQS News Service

   ══════════════════════════════════════════════════════════════════════════

    1 fncls.ssp?fn=show_t_gif&application_id=1051267&application_name=news&site_id=reuters8

References

   Visible links


============