REG-SThree SThree: Half Year Trading Update
15/06/2018 07:05
============
SThree (STHR)
SThree: Half Year Trading Update
15-Jun-2018 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR), transmitted by
EQS Group.
The issuer is solely responsible for the content of this announcement.
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15 June 2018
Half Year Trading Update
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.
Highlights
• Group gross profit ("GP") up 11%* YoY, with Q2 up 13%*
- Continued strong growth in Continental Europe up 18%*,
with DACH++ up 18%* and Netherlands up 25%*
- Good performance in USA up 9%*
- UK&I GP down 2%* YoY, with Contract GP up 1%*
- 82% of Group GP generated outside the UK&I (H1 2017: 80%)
• Contract GP up 14%* YoY
- Strong growth across all sectors, with ICT up 10%*, Life
Sciences up 14%* and Energy up 35%*
- Strong growth in Continental Europe up 21%* and USA up
16%*
- Contract represents 72% of Group GP (H1 2017: 70%)
• Permanent GP up 4%*, with Q2 up 7%*. Permanent productivity up 3%*
in H1
• Group period-end sales headcount up 6% YoY, with average headcount
up 10% YoY.
+Science, Technology, Engineering & Mathematics
++ Germany, Austria and Switzerland
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."
Financial Highlights -
Group Gross Profit
H1 2018 Q2 2018 Q1 2018
Gross Profit H1 2018 H1 2017 YoY % 1 YoY % 1 YoY % 1
Contract £106.7m £94.2m +14% +16% +11%
Permanent £41.7m £40.2m +4% +7% +2%
Group £148.4m £134.4m +11% +13% +8%
UK&I £26.5m £27.1m -2% -2% -3%
Continental Europe £83.9m £69.1m +18% +20% +15%
USA £29.5m £29.7m +9% +16% +1%
Asia Pac & Middle East £8.5m £8.5m +8% +1% +15%
Group £148.4m £134.4m +11% +13% +8%
ICT £66.5m £59.7m +9% +13% +5%
Banking & Finance £20.1m £20.5m +1% +1% -
Energy £14.0m £11.4m +31% +28% +35%
Engineering £14.3m £11.8m +17% +20% +14%
Life Sciences £30.6m £28.8m +11% +12% +9%
Other 3 £2.9m £2.2m +28% +25% +32%
Group £148.4m £134.4m +11% +13% +8%
Contract / Perm Split
Contract 72% 70%
Permanent 28% 30%
100% 100%
Geographical Split
UK&I 18% 20%
Continental Europe 56% 51%
USA 20% 22%
Asia Pac & Middle East 6% 7%
100% 100%
Sector Split
ICT 45% 44%
Banking & Finance 13% 15%
Energy 9% 9%
Engineering 10% 9%
Life Science 21% 21%
Other 2% 2%
100% 100%
1 *At constant currency
2 Other Sectors include Procurement & Supply Chain and Sales and Marketing
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.
*at constant currency
** Period end number of contractors onsite with clients
SThree is hosting an analyst conference call today at 0830 BST. The
details are as follows:
Telephone number: +44 (0) 20 3003 2666 or 0808 109 0700
For access to the call please quote passcode SThree
A replay facility will be available for seven days on +44 (0) 20 8196 1998
/ Access Pin: 1308082#
The Group will issue its interim results for the six months ended 31 May
2018 on 23 July 2018.
- Ends -
Enquiries:
SThree plc 020 7268 6000
Gary Elden, Chief Executive Officer
Alex Smith, Chief Financial Officer
Kirsty Mulholland, Company Secretariat
Citigate Dewe Rogerson 020 7638 9571
Kevin Smith/Jos Bieneman
Notes to editors
SThree is a leading international specialist staffing business, providing
permanent and contract specialist staff to a diverse client base of over
9,000 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 the
Banking & Finance, Energy, Engineering and Life Sciences 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 2,800 employees in sixteen 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 and is before any exceptional items.
Accordingly, undue reliance should not be placed on forward looking
statements.
══════════════════════════════════════════════════════════════════════════
ISIN: GB00B0KM9T71
Category Code: TST
TIDM: STHR
LEI Code: 2138003NEBX5VRP3EX50
Sequence No.: 5651
EQS News ID: 695591
End of Announcement EQS News Service
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