REG - SThree plc - FY24 Half Year Results
23/07/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240723:nRSW3681Xa&default-theme=true
RNS Number : 3681X SThree plc 23 July 2024
SThree plc
RESULTS FOR THE six months ENDED 31 MAY 2024
Resilient performance in H1 driven by our contract business
SThree plc ('SThree' or the 'Group'), the only global specialist talent
partner focused on roles in Science, Technology, Engineering and Mathematics
(STEM), today announces its financial results for the six months ended 31 May
2024.
FINANCIAL HIGHLIGHTS
H1 FY24 Variance
Continuing operations H1 FY23
Reported Like-for-like((1))
Revenue (£ million) 763.4 825.2 -7% -5%
Net fees (£ million) 188.7 208.6 -10% -7%
Operating profit (£ million) 37.7 38.1 -1% +3%
Operating profit conversion ratio 20.0% 18.3% +1.7% pts +1.9% pts
Profit before tax (£ million) 39.0 38.5 +1% +5%
Basic earnings per share (pence) 21.2 21.0 +1% +5%
Interim dividend per share (pence) 5.1 5.0 +2% +2%
Net cash (£ million)((2)) 90.0 72.4 +24% +24%
HALF-YEAR HIGHLIGHTS
· The Group delivered net fees of £188.7 million, down 7% YoY(()(3)), despite
the ongoing challenging backdrop and against a strong prior year performance.
o Within our core skill verticals Engineering was up 8% driven primarily by the
Energy sector, whilst Technology was down 9% and Life Sciences was down 16%
driven by global sector trends.
o Net fees across our three largest countries, representing 72% of Group:
Netherlands up 3%, Germany down 12% and USA down 13%.
· Contract net fees, now representing 84% of Group net fees (H1 FY23: 81%), were
down 4% as the ongoing softness in new business activity continues to be
partially offset by strong client extensions; a demonstration of our clients'
need to retain critical STEM skills and flexible talent.
· Contractor order book((4)) of £182.1 million, down only 2% YoY despite a very
strong prior year comparator, represents sector-leading visibility with the
equivalent of circa four months' net fees.
· Profit before tax of £39.0 million (up 5% YoY(()(3))) due to lower average
headcount for the half, tight cost control and the benefit of higher interest
income.
· Strong balance sheet, with £90.0 million net cash as at 31 May 2024 (H1 FY23:
£72.4 million).
· Interim dividend approved at 5.1 pence per share (H1 FY23: 5.0 pence).
· The Technology Improvement Programme remains on track, with the US live and
deployments well under way in both Germany and the UK.
· Sustainable business practice and ESG commitments demonstrated by:
o SThree's clean energy (renewables) business up 15% versus H1 FY23 (H1 FY23: up
29% versus H1 FY22).
o 8% carbon reduction in absolute emissions in FY23((5)) in comparison to FY19,
our baseline year.
o 37% of women (H1 FY23: 33%) in leadership as we progress towards achieving
50/50 representation in leadership.
OUTLOOK
· Contract extensions remain strong whilst new business activity continues to be
subdued.
· Whilst market conditions have remained challenging for longer than
anticipated, performance for FY24 currently expected to be in line with market
expectations((6)).
· Continued focus on investment and sequenced roll-out of the TIP across rest of
the Group, strengthening the Group's position for long-term growth.
((1)) Variance compares reported H1 FY24 against reported H1 FY23 on a
constant currency basis, whereby the prior financial period foreign exchange
rates are applied to current and prior financial period results to remove the
impact of exchange rate fluctuations.
((2)) Net cash represents cash and cash equivalents less borrowings and bank
overdrafts and excluding leases.
((3)) All YoY growth rates in this announcement are expressed at constant
currency.
((4)) The contractor order book represents value of net fees until contractual
end dates, assuming all contractual hours are worked.
((5)) Target not measured at mid-year.
((6)) Current consensus PBT expectation is £69.2 million. Source: SThree
compiled consensus.
Timo Lehne, Chief Executive Officer, commented:
"Given the challenges faced across the sector, our resilient performance in
the first six months of the financial year has been pleasing. Strong Contract
extensions have continued to underpin performance despite subdued new business
activity. Our unique business model focused on specialist STEM skills and
flexible talent solutions, continues to power our performance, supported by
global megatrends driving long-term demand for the skills we place.
We continue to progress with the Technology Improvement Programme, which
overall remains on track and on budget, and we are delighted with the progress
we have made so far with our phased roll out. Three of our largest markets
are now transacting business through the platform and we are already starting
to see early evidence of operational efficiencies, and we are excited by the
additional scale benefits to be realised as we continue on our journey to
becoming a digital-first innovator.
As we enter the second half of the year, market sentiment remains largely
unchanged. Contract extensions continue to be robust as clients seek to retain
much-needed STEM expertise, and we are well covered in our focussed skills
specialism and markets for when macroeconomic conditions ease. Through this,
we remain laser focussed on executing our vision and we continue to be bold in
our ambition. With our people, position and processes coming together in line
with our digital-first vision, the long-term future is bright."
Analyst conference call
SThree is hosting a webinar for analysts and investors today at 08:30 BST to
present the Group's results for the six months ended 31 May 2024.
In addition, at 14:00 BST, the Group will host the third in its series of
investor briefings. This virtual webinar will focus on the Employed Contractor
Model.
If you would like to register for these conference calls, please
contact SThree@almastrategic.co.uk (mailto:SThree@almastrategic.co.uk) .
SThree will issue its Q3 trading update on 24 September 2024.
The person responsible for this announcement is Kate Danson, Company
Secretary.
Enquiries:
SThree plc
Timo Lehne,
CEO
via Alma
Andrew Beach, CFO
Keren Oser, Investor Relations Director
Alma PR
+44 20 3405 0205
Rebecca
Sanders-Hewett
SThree@almastrategic.co.uk (mailto:SThree@almastrategic.co.uk)
Hilary Buchanan
Sam Modlin
Will Ellis Hancock
Notes to editors
SThree plc brings skilled people together to build the future. We are the only
global specialist talent partner focused on roles in Science, Technology,
Engineering and Mathematics (STEM), providing permanent and flexible contract
talent to a diverse base of nearly 4,800 clients (with whom we worked in H1
FY24) across 11 countries. Our Group's circa 2,600 staff cover the Technology,
Life Sciences and Engineering sectors. SThree is part of the Industrial
Services sector. We are listed on the London Stock Exchange's Main Market,
trading with ticker code STEM.
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.
Chief Executive Officer's STATEMENT
Overview
The Group's performance in the first half of the year has continued to
demonstrate the strength of our unique operating model and proposition centred
on sourcing STEM skills and flexible talent. Within the context of a
persistent challenging market, which has weighed on the wider sector, the
Group delivered net fees down 7% from record highs in the prior year and
comfortably above pre-covid levels, underpinned by a robust Contract
performance (down 4%). Alongside the resilient net fee performance, the Group
delivered operating profit of £37.7 million, up 3% YoY, and ended the period
with £90.0 million of net cash.
Further to this we have started to see the early rewards of our efforts to
move beyond the status quo and to do things differently. We took the bold
decision two years ago to initiate our Technology Improvement Programme (TIP)
to position SThree as a digital-first organisation, supercharging our teams
through an end-to-end technology platform to drive efficiencies and scale.
With three of our largest markets now transacting through early iterations of
the platform, we are pleased to see the first stage of benefits starting to
materialise in the form of operational efficiencies, and we look forward to
the top line benefits that will come, as anticipated, as the roll-out
progresses. Significant change programmes like this can be difficult for teams
to adapt to. We're proud of how our teams have risen to the challenge and
would like to take this opportunity to thank them for their commitment.
The real-world impact of our work has meant we have been able to help over
6,198 highly skilled STEM professionals successfully secure their next career
role, connecting them with dynamic organisations in industries that are at the
forefront of innovation and development. More broadly, in the first six months
of the year, we have positively impacted 9,280 lives through our work and
engagement with community initiatives, grown our clean energy business by
double-digits, invested in our teams and continued to execute our ambitious
growth strategy to ensure we are putting ourselves in the best position to win
and grow shareholder value for the long-term.
A business model positioned for a changing world
Whilst in the short term wider markets continue to be characterised by
uncertainty, causing many businesses to pause on new project spend and
investment initiatives, the conviction that our Contract and STEM focus
positions us at the centre of two long-term structural growth drivers is
stronger than ever. All the evidence suggests that STEM skills are in short
supply with many businesses in our key markets struggling to recruit the STEM
skills they need (1).
The widening gap between demand and supply of STEM skills has been accelerated
with the surge in adoption of generative-AI and machine learning technologies.
As a McKinsey Global Survey reports, AI adoption worldwide has increased
dramatically in the past year, with 72% of respondent organisations having
adopted AI in at least one business function, up from a consistent c.50% over
last six years(2). However, it has been shown that to fully embed AI and
achieve meaningful value from technology investment, organisations must invest
twice as much in people as they do in technologies(3). Businesses across all
industries must find the expertise to fill new types of roles, such as data
analytics and AI engineers, if they seek to harness the efficiency of modern
technologies.
We partner with diverse clients across sectors to connect them with
communities of sought-after specialists through a full suite of services that
meet both client and candidate needs, including Independent Contractors (IC),
Employed Contractors (ECM) and Permanent placements. Our strategic focus on
Contract, now representing 84% of Group total net fees, is a conscious effort
to align our business to the changing dynamics in the work environment and the
growing need for adaptability. Flexible talent encompasses contract workers,
part-time specialists and project-based teams who can pivot and adapt to the
fast-evolving requirements of the STEM industries. This approach allows us to
offer solutions that are not only responsive to the immediate needs of
businesses but also support the preference of our candidate community.
This focus gives rise to our unique model that delivers quality earnings and
sector-leading visibility through cycles. With continued strong Contract
extensions from our clients during the period, the Contract Order Book was
down only 2% YoY to £182.1 million, and represents the equivalent of circa
four months of net fees, partially offsetting the soft new business
environment.
Strategy execution and focus
We pursue our market opportunity with a highly disciplined approach to capital
allocation and with a clear strategy centred on four strategic pillars. I am
pleased to report that we continued to make meaningful progress against all
four, moving us closer to our vision of being the #1 STEM talent partner in
the best STEM markets, with scale and sustainable margins. As we drive best
practice through the business, work closer together as a global team and
challenge ourselves to do things better and more efficiently, our belief is
that as these pillars come together, we can redefine our future business model
and unlock further growth potential.
Our Places - knowing where to play, play where we can win
Our strict market investment model informs the regional and vertical mix we
choose to operate in, with our active market coverage targeted to the 11
largest STEM markets worldwide. As we regularly assess and analyse our
position within these markets, we are excited by the opportunities we see. Our
average market share remains at a modest 3%, ranging from 0.1% in Japan to 6%
in the Netherlands where we hold a market leading position. As such, this
leaves exponential scope to leverage our position to grow both organically
and, given the highly fragmented supplier landscape, through selective
M&A.
We are maintaining our disciplined and focused headcount investment in the
market and skill verticals that provide the best long-term growth
opportunities and where we see the potential for the strongest returns as the
market recovers. To support our growth ambitions in the regions, we have
continued to evolve our insights platform, and provide internal and external
data to our consultants to go deeper in our skills specialisms. We have
continued to align our consultants along very clear skills verticals by
region, and bring further clarity to the skills that we recruit for.
Our Platform - digital first
The overall TIP continues to progress on track and on budget. The first
iteration of our platform is deployed across our US business and is undergoing
continuous improvement as more and more data flows through the platform,
driving richer, bespoke insights. Our second major regional roll-out in
Germany is well underway and we have now initiated our third regional roll-out
in the UK. With each regional roll-out, we are absorbing new learnings and
becoming increasingly efficient in our deployments.
As at the end of H1, we had processed over 38,000 invoices, equating to nearly
£160 million of revenue. As we have stated before, cost efficiencies will be
the first benefit to materialise before we start to generate productivity
proof points from our early deployments. We are pleased to share that in line
with our expectations, in the US we have already seen material cost
efficiencies with further savings expected as systems are fully bedded in. We
are well on our journey to becoming a digital-first innovator and we continue
to see this programme as a key ingredient to driving higher margin growth over
the medium term.
Our People - best employer, best people
The resilient results we have delivered in the period reflect the talent and
capabilities of our global teams, who strive to bring our clients innovative
solutions to their unique needs, delivered with best-in-class customer
service. During the period, we have made several enhancements to our employee
value proposition, with a focus on employee engagement and inclusion, to
ensure we continue to attract and retain the best talent. As part of this, we
launched senior leadership development programmes in partnership with Deloitte
and St Gallen Business School to support talent management and succession. We
also witnessed the completion of the third cohort of our women in leadership
talent accelerator programme. In addition, we dedicated particular focus in
the period to our sales function, reviewing and enhancing processes to support
retention and productivity and ensuring we have the right structures in place
to support ambition.
A core focus of our TIP has been engagement and collaboration with our global
teams, ensuring everyone plays a role in our journey. We understand that
technology is only as good as how it is utilised, and it is pleasing to see
the excitement within the teams for the adoption of our new platform. New
learnings are being embedded through the organisation everyday through our
transformation learning programmes, and through this change, we are delighted
to have achieved an eNPS of 45 for H1 (H1 FY23: 47), comfortably maintaining
our position in the top quartile of professional services companies.
Our Position - a winning brand with competitive and differentiated value
propositions
We capture our market opportunity through our 'house of brands' approach,
leveraging the strong brand-value we have in our specialist vertical skills.
During the period, we have taken this to the next level by investing in our
brand websites and go-to-market channels, as well as enhanced our digital
marketing capabilities to drive mass lead generation. Unchanged through the
period is our reputation as a trusted partner, which remains core to our
proposition. Our customer-centric focus means we work hard to understand and
collaborate with our clients to address their needs quickly and effectively,
reaffirming our leadership in the STEM talent staffing sector.
Our focus as we look ahead into H2 is to further optimise our strong
go-to-market brands by tying them closer to the Group, including the
development of new, aligned visual identities, to leverage their collective
brand value across our markets and skills. We will further reinforce our Group
market position through new thought leadership initiatives, including our next
STEM survey report launching in H2.
Current trading and outlook
As we enter the second half of the financial year, market sentiment remains
largely unchanged. Commitment to new project expenditure is taking longer
resulting in continued subdued new business activity, however Contract
extensions remain robust as clients seek to retain much-needed STEM skills. As
we look ahead to improving market conditions, we continue to tightly manage
costs and remain highly focused in our targeted investments, ensuring we are
well positioned to capitalise when the market returns. As a result, we
currently expect FY24 performance to be in line with market expectations, and
we remain well covered in our focussed skills specialism which are aligned to
client requirements. We believe we are in the right sectors, the right
markets, with the right teams, and we continue to be bold in our ambition.
With our people, position and processes coming together in line with our
digital-first vision, the long-term future is bright.
(1) Source
(https://www.businesseurope.eu/publications/new-survey-european-companies-highlights-critical-labour-and-skills-shortages#:~:text=Respondents%20of%20our%20survey%20confirm%20that%20employers%20are%20facing%20shortages%20of%20people%20across%20all%20skill%20levels.%20However%2C%20the%20shortages%20are%20reported%20as%20being%20most%20acute%20in%20technical%20and%20engineering)
: New survey of European companies highlights critical labour
and skills shortages | BusinessEurope
(https://www.businesseurope.eu/publications/new-survey-european-companies-highlights-critical-labour-and-skills-shortages#:~:text=Respondents%20of%20our%20survey%20confirm%20that%20employers%20are%20facing%20shortages%20of%20people%20across%20all%20skill%20levels.%20However%2C%20the%20shortages%20are%20reported%20as%20being%20most%20acute%20in%20technical%20and%20engineering)
( ) Source
(https://www.brookings.edu/articles/improving-workforce-development-and-stem-education-to-preserve-americas-innovation-edge/#:~:text=Currently%2C%2045%25%20of%20STEM%20employees,and%20growing%20that%20talent%20pool.)
: Improving workforce development and STEM education to
preserve America's innovation edge | Brookings
(https://www.brookings.edu/articles/improving-workforce-development-and-stem-education-to-preserve-americas-innovation-edge/#:~:text=Currently%2C%2045%25%20of%20STEM%20employees,and%20growing%20that%20talent%20pool.)
(2) Source: The state of AI in early 2024: Gen AI adoption
spikes and starts to generate value | McKinsey
(https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai)
(3) Source: What will developers do with 40% more time? | SThree
(https://www.sthree.com/en-gb/insights-and-research/the-future-of-work/what-will-developers-do-with-40-more-time/)
COMMITMENT TO BEING A RESPONSIBLE BUSINESS
We continue to make steady progress towards our ESG targets during the first
half of the current year (against an FY19 baseline year). Our organisational
purpose is rooted in delivering sustainable outcomes and we have continued to
enhance our local communities through access to decent work and tackling
career inequalities. Despite a challenging market we have continued to invest
in building a diverse talent pipeline for our clients whilst addressing
barriers to STEM career paths for those underserved in the locations where we
operate.
During this period, we have also continued to see our clean energy business
(renewables) grow at pace as the world continues to focus on decarbonisation,
a megatrend underpinned by STEM skills. Whilst supporting our clients to
decarbonise their value-chain, we have also spent the first half of this year
strengthening our own net zero transition plans to ensure we make progress to
achieve our science-based targets.
Further details of our net zero targets and wider ESG commitments can be found
in our Impact Report on our website. Progress within the first half of this
financial year is detailed below:
To positively impact To double the share of our global clean energy business by FY24 To reduce our scope 1 and 2 emissions by 77% and reduce scope 3 emissions by We aspire to increase the representation of women in leadership to 50/50
50% by FY30*
150,000 lives by FY24
Progress 123,746 lives positively impacted by SThree since FY19 (baseline year). 173% growth in our clean energy business net fees since FY19 (baseline year). 31% increase in scope 1 & 2 and 12% reduction in scope 3 in FY23 from FY19 37% of leadership positions held by women.
(baseline year). Totalling an 8% reduction in absolute emissions.
H1 FY24 half year activities 9,280 lives positively impacted: 15% YoY growth in our clean energy business net fees in H1 FY24. Established our Net Zero working group and made progress towards developing a Completed our third cohort of our talent accelerator programme for women.
detailed Net Zero action plan.
6,198 accessed decent work through SThree placements. Launched our global women's network.
829 accessed our career support programme.
2,015 lives impacted through community initiatives.
Alignment to strategic pillars People Places Platform People
Position
Relevant UN Sustainable Development Goals SDG 4. Quality Education SDG 7. Affordable and clean energy SDG 13. Climate action SDG 10. Reduced inequalities
SDG 8. Decent Work and economic growth SDG 13. Climate action
SDG 10. Reduced inequalities SDG 17. Partnerships for the goals
* Full SECR reporting is available in our FY23 Annual Report and Accounts.
Group OPERATIONAL REVIEW
Overview
The Group delivered a resilient net fee performance in the first half of FY24
with net fees down 7% YoY despite the ongoing challenging market conditions
and against the record prior year performance.
Our Contract business, which is our main strategic area (representing 84% of
Group), saw net fees decline by 4% YoY. Contract lengths increased 9% YoY to
51 weeks, while pricing remained robust. The contractor order book closed at
£182.1 million which, whilst down only 2% YoY, continues to provide
sector-leading visibility. Permanent net fees were down 18% YoY reflecting
both global market conditions together with our targeted investment towards
Contract in specific markets. Average permanent headcount was down 13% YoY.
From a skill verticals perspective, the Group saw continued strong demand for
Engineering roles, up 8% YoY, driven primarily by the Energy sector, with
clean energy (renewables) the fastest growing segment, while net fees for
placements into Technology roles, our largest discipline, were down 9% YoY and
Life Sciences declined 16% YoY primarily driven by the global market
conditions in the sector, though still broadly in-line with pre-Covid levels.
Overall, Group reported operating profit was £37.7 million (H1 FY23: £38.1
million), up 3% YoY on a like-for-like basis, driven primarily by lower
personnel costs, with average headcount down 10% YoY, along with tight cost
management. The operating profit conversion ratio for the half was 20.0%,
which we expect to temper in the second half of the year due to planned
investments together with additional license and amortisation costs as the
Technology Improvement Programme (TIP) is rolled out across the Group.
The Group period-end headcount declined marginally by 2% compared to the end
of FY23, as we remain focused on managing our business prudently, whilst also
ensuring we are ready to respond when the market improves. Productivity in the
first half was up 4% YoY as the rate of net fee decline was lower than average
headcount decline, reflecting careful management of natural churn.
Update against our 2024 ambitions
In line with our 2024 ambitions to deliver growth and value for our Group and
all stakeholders, we continued to make good progress on our journey to become
the number one STEM talent provider in the best global STEM markets. In the
six months ended 31 May 2024, our key achievements included:
· Market share: Our net fee growth vs FY19 remains ahead of our peer group in
all core geographies.
· Conversion ratio: Achieved an operating profit conversion ratio of 20% in H1
FY24. We remain committed to our ambition of achieving margins at 21% or
higher in the mid to long-term, however as previously stated we expect current
macro-economic headwinds to dampen margin progression in the short term.
· People: Group-wide eNPS was 45 at H1 FY24, two points up since the year end.
Our recognition schemes, goal setting, performance feedback and progress made
in the roll-out of the TIP were identified as strengths which support the
efforts in creating a high performance culture. Our eNPS remains within the
top quartile of Professional Services industry.
· Planet: Reduced our carbon emissions by 8% versus FY19 (the base year). To
contribute towards the global fight against climate change, we launched
several actions to educate and influence sustainable behaviours across the
business to ensure we make progress towards our SBTi net zero targets which
were announced in April 2023. We also grew our clean energy business net fees
by 15% YoY, to represent 11% of Group net fees at H1 FY24.
· Positively impacted over 9,280 lives through delivering recruitment solutions
and community programmes in H1 FY24 alone.
Group net fees % of Group H1 FY24 H1 FY23 Variance
(£'000) (£'000)
Reported Like-for-like((1))
Geographical mix
DACH 34% 64,197 74,476 -14% -12%
USA 22% 41,841 49,364 -15% -13%
Netherlands including Spain 22% 41,121 39,381 +4% +7%
Rest of Europe 17% 31,311 35,178 -11% -10%
Middle East & Asia 5% 10,273 10,192 +1% +11%
Total 100% 188,743 208,591 -10% -7%
Skills mix
Technology 48% 90,153 101,712 -11% -9%
Engineering 29% 53,956 51,223 +5% +8%
Life Sciences 17% 31,618 38,958 -19% -16%
Other 6% 13,016 16,698 -22% -20%
Total 100% 188,743 208,591 -10% -7%
Service mix
Contract 84% 158,712 169,982 -7% -4%
Permanent 16% 30,031 38,609 -22% -18%
Total 100% 188,743 208,591 -10% -7%
(1) All YoY growth rates in this announcement are expressed at constant
currency.
Business mix
The Group is well diversified, both geographically and by the skills we place
across multiple sectors. Our top three countries now represent 72% of Group
net fees, with Germany accounting for 30%, USA 22% and the Netherlands 20% of
Group net fees.
Our Contract business declined by only 4% on a like-for-like basis against a
record prior year performance and now represents 84% of the Group net fees.
Our Permanent business, which now represents 16% of the Group net fees, saw
net fees decline 18% in the current financial period, with average Permanent
headcount down 13% YoY. Our market invest model enables us to continually
review our markets to prioritise investments where we see opportunities for
growth and the strongest returns.
Engineering, which represents 29% of the Group net fees, grew by 8% across
most regions, driven primarily by the Energy sector. Clean energy business
(renewables) remains the fastest growing segment, up 15% YoY. This was offset
by the decline in Technology of 9% YoY, and in Life Sciences of 16% YoY due to
reduced global expenditure in that sector. Technology and Life Sciences now
represent 48% and 17% of the Group net fees respectively.
Operational review by reporting segment
DACH (34% of Group net fees)
H1 FY24 H1 FY23 Variance
Performance highlights Reported Like-for-like
Revenue (£'000) 229,962 264,512 -13% -11%
Net fees (£'000) 64,197 74,476 -14% -12%
Average total headcount (FTE) 818 907 -10% n/a
· DACH is our largest region comprising businesses in Austria, Germany and
Switzerland, with Germany accounting for 87% of net fees.
· The region saw net fees decline by 12% YoY, with our Technology business down
15%, but partially offset by Engineering business, up 4% YoY.
· DACH Contract net fees were down 6% YoY and Permanent net fees were down 26%.
· Germany's net fees were down 12% YoY driven by Technology which was down 16%
due to market conditions across that sector.
· Switzerland saw net fees decline 2% and Austria net fees declined 9%.
USA (22% of Group net fees)
H1 FY24 H1 FY23 Variance
Performance highlights Reported Like-for-like
Revenue (£'000) 154,463 164,019 -6% -3%
Net fees (£'000) 41,841 49,364 -15% -13%
Average total headcount (FTE) 412 509 -19% n/a
· The USA is the world's largest specialist STEM staffing market and our
second-largest region on a net fee basis. It remains a key area of focus for
the Group, and we will continue to invest in the region as we align our
resources with the best long-term opportunities.
· USA saw net fees decline 13% YoY. Contract, which represents 91% of net fees,
was down 8% YoY driven by Life Sciences, down 20% YoY and Technology, down 24%
YoY, in line with the market conditions. Technology job posting volumes were
down by 26% in the first half of the year with soft demand in the key areas of
software development, infrastructure, and big data. Strong growth in
Engineering, up 10%, helped to partially offset the declines in the other two
skill verticals.
· Permanent, which represents 9% of net fees, declined 40% driven by Life
Sciences and due to the accelerated transition towards Contract.
Netherlands including Spain (22% of Group net fees)
H1 FY24 H1 FY23 Variance
Performance highlights Reported Like-for-like
Revenue (£'000) 175,913 177,497 -1% +1%
Net fees (£'000) 41,121 39,381 +4% +7%
Average total headcount (FTE) 415 436 -5% n/a
· Net fees for the region were up 7% YoY, with Contract up 6% and Permanent up
20%.
· The Netherlands, our largest country in the region which accounts for 91% of
net fees, delivered robust net fee growth of 3% YoY. Contract was up 1% YoY
and Permanent saw strong growth of 21% with overall performance supported by
growth in Engineering, up 10%, partially offset by decline in Life Sciences
and Technology, down 5% and 2% respectively.
· Spain saw strong growth of 73% in the first half, driven by Technology and
Engineering.
Rest of Europe (17% of Group net fees)
H1 FY24 H1 FY23 Variance
Performance highlights Reported Like-for-like
Revenue (£'000) 181,709 197,221 -8% -7%
Net fees (£'000) 31,311 35,178 -11% -10%
Average total headcount (FTE) 442 542 -18% n/a
· Rest of Europe comprises of businesses in the UK, Belgium and France.
· Net fees declined 10% YoY, which includes the impact of restructured markets.
Excluding these, net fees for the region would have been down 7%. Contract,
which represents 97% of net fees for the region, declined 7%, with Permanent
declining 53%, driven by both market conditions and the transition towards
Contract, particularly prominent in the UK.
· The UK, our largest country in the region, saw net fees decline 9%, with
growth in Engineering, up 18% YoY, outweighed by declines in Life Sciences and
Technology, down 26% and 5% respectively.
· Belgium saw net fees down 7% and France was up 2%.
Middle East & Asia (5% of Group net fees)
H1 FY24 H1 FY23 Variance
Performance highlights Reported Like-for-like
Revenue (£'000) 21,357 21,962 -3% +5%
Net fees (£'000) 10,273 10,192 +1% +11%
Average total headcount (FTE) 193 189 +3% n/a
· Our Middle East & Asia business principally includes Japan, UAE and
Singapore, and accounts for 5% of Group net fees.
· Net fees were up 11% YoY (excluding the impact of the restructured markets, up
18%), with Contract down 13% and Permanent up 24%. Japan, which represents 47%
of the region, delivered an exceptional performance for the first half, up 27%
YoY, driven by Engineering due to demand for roles within clean energy
business.
· Strong performance in UAE with net fees growing 9% driven by roles in Finance
and Life Sciences.
Chief financial officer's REVIEW
The Group has delivered a resilient net fee performance in the first half of
FY24, with net fees down 7% YoY, against the backdrop of a strong prior-year
performance and current macro-economic uncertainties. This is the third best
H1 performance on record, up 18% on pre-Covid performance. The performance is
supported by the strength of our well-established strategy, focused on STEM
and flexible talent.
Income statement
On a reported basis revenue for the half year was down 7% to £763.4 million
(H1 FY23: reported £825.2 million) while net fees decreased by 10% to £188.7
million (H1 FY23 £208.6 million). The weakening of our two main trading
currencies, the US Dollar and the Euro, against Sterling during the year,
decreased the total net fees by £5.0 million. Therefore, when presented on a
constant currency basis, the net fees decreased by 7% YoY.
Net fees in our Contract business, which represented 84% of the Group net fees
for the half year (H1 FY23: 81%), declined by 4%, driven by the ongoing
softness in new business but partially offset by continued strong contract
extensions. Across our core regions, only the Netherlands saw growth in
Contract net fee income, which was up 1%, thanks to strong demand for
Engineering skills. In the US, Contract net fees, which now account for over
90% of the region total net fees, were down 8% YoY primarily due to its
exposure to Life Sciences, while DACH was down 6%, reflecting softer demand
for Technology skills. Rest of Europe Contract performance was down 7%, though
excluding restructured markets would have been down 5% YoY. Middle East &
Asia was down 13%. Skills-wise Engineering was up 8% YoY, with Life Sciences
down 16% and Technology down 9%, reflecting global market conditions. The
Group Contract net fee margin, calculated as Contract net fees as a percentage
of Contract revenue 1 (#_ftn1) remained flat YoY at 21.7% (H1 FY23: 21.7%).
The contractor order book was down 2% YoY and continues to provide good
visibility into the remainder of FY24. Under the Contractor model, net fees
are earned on a month-by-month basis, with the contract order book reflecting
the value of net fees under contract but yet to be recognised. During softer
market conditions, this provides resilience with visibility over the
recurring-like nature of monthly contract fees as contracts run their course
(Contract 'finishers'). In a market recovery context, the Board would expect
the contract order book to gradually increase as and when new placements
outpace finishers over a sustained period through the year.
Permanent net fee income was down 18% reflecting market conditions across all
regions, together with our targeted investment towards Contract. Our largest
Permanent market, DACH, reported a decline of 26%. Netherlands region was up
21%, Rest of Europe down 53%, USA down 40%, and Middle East & Asia was up
by 24%. Permanent average fees increased by 12% YoY in the period, with
average permanent fee margin (net fees as a percentage of salary) now at 27.3%
(H1 FY23: 26.6%).
Operating expenses decreased by 11% YoY on a reported basis, amounting to
£151.0 million (H1 FY23: £170.5 million). Overall, the reported operating
profit was £37.7 million (H1 FY23: £38.1 million), up 3% YoY on a
like-for-like basis, while the Group operating profit conversion ratio
increased to 20.0% (H1 FY23: 18.3%). We expect the conversion ratio to
temper in the second half of the year due to additional licensing and
amortisation costs as we roll out the Technology Improvement Programme
alongside planned investments to ensure the Group is well positioned for when
market conditions improve. Productivity was up moderately YoY as average
headcount was down resulting in personnel costs declining faster than net
fees; this reflects careful management of natural churn. The net currency
movements versus Sterling were unfavourable to the operating profit, reducing
it by £1.5 million.
Net finance income
The Group received net finance income of £1.3 million as compared to net
finance income of £0.4 million in the previous year. The YoY increase was
driven by certain short-term investments into money market funds.
Income tax
The total tax charge for the half year on the Group's profit before tax was
£10.9 million (H1 FY23: £10.8 million), representing an estimated full-year
effective tax rate (ETR) of 27.9% (H1 FY23: 28.1%). The Group's ETR varies
depending on the mix of taxable profits by territory, non-deductibility of the
accounting charge for LTIPs and other one-off tax items.
Overall, the reported profit before tax was £39.0 million, up 5% YoY in
constant currency and up 1% on a reported basis (H1 FY23: £38.5 million).
The reported profit after tax was £28.1 million, up 5% YoY in constant
currency and up 2% on a reported basis (H1 FY23: £27.7 million).
Earnings per share (EPS)
The reported EPS was 21.2 pence (H1 FY23: 21.0 pence). The YoY movement is
attributable to the overall resilient trading performance, combined with lower
average headcount, tight cost control and higher net interest in the first
half, partially offset by an increase of 0.7 million in the weighted average
number of shares. Reported diluted EPS was 20.8 pence (H1 FY23: 20.4 pence).
Share dilution mainly results from various share options in place and expected
future settlement of certain tracker shares. The dilutive effect on EPS from
tracker shares will vary in future periods, depending on the profitability of
the underlying tracker businesses and the settlement of vested arrangements.
Dividends
The Board monitors the appropriate level of dividend, taking into account
achieved and expected trading of the Group, together with its balance sheet
position. The Board aims to offer shareholders long-term ordinary dividend
growth within a targeted dividend cover range of 2.5x to 3.0x through the
cycle.
The Board proposes to pay an interim dividend of 5.1 pence (H1 FY23: 5.0
pence), amounting to c.£6.8 million in total. This will be paid on 6 December
2024 to shareholders on record on 8 November 2024. The dividend will be paid
from distributable reserves.
Liquidity management
In H1 FY24, cash generated from operations was £41.6 million (H1 FY23: £55.1
million). The decrease was primarily driven by the lower rate of new placement
activity, partially offset by robust Contract extensions. Income tax paid
decreased to £11.4 million (H1 FY23: £10.2 million) in line with the trading
performance across our markets.
Capital expenditure increased to £5.0 million (H1 FY23: £3.0 million),
primarily driven by the continued development and roll-out of the Group-wide
Technology Improvement Programme. The capital expenditure also included costs
of leasehold improvements across our office portfolio.
The Group paid £7.1 million in rent (principal and interest portion) (H1
FY23: £7.7 million). Net interest income (excluding interest on lease
payments) was £1.7 million (H1 FY23: net interest income £0.6 million)
during the period. The Group spent £10.0 million (H1 FY23: £10.0 million) on
the purchase of its own shares to satisfy existing employee share incentive
schemes. Cash inflows of £0.4 million (H1 FY23: £0.1 million) were generated
from Save As You Earn employee scheme.
Dividends payments were £0.5 million and included £0.3 million in payments
to shareholders who claimed FY23 interim dividend post the year end, and £0.2
million in payments for unclaimed dividends due to shareholders from prior
years (2019-2023). In the comparator period, H1 FY23, dividend payments
amounted to £20.5 million, and comprised the FY22 interim dividend paid in
December 2022 and the FY22 final dividend for which funds were transferred to
the share administrator in May 2023.
Foreign exchange had a negative impact of £2.9 million (H1 FY23: positive
impact of £2.6 million).
Overall, the underlying cash performance in the first half of FY24 was very
strong, reflecting underlying profits for the half offset by share purchases
for the Employee Benefit Trust and capital expenditure on TIP. We started the
year with net cash of £83.2 million and closed the period with net cash of
£90.0 million.
Accessible funding
The Group's capital allocation priorities are financed mainly by retained
earnings, cash generated from operations, and a £50.0 million Revolving
Credit Facility (RCF). This has remained undrawn during the period, but any
funds borrowed under the RCF would bear a minimum annual interest rate of 1.2%
above the benchmark Sterling Overnight Index Average (SONIA). The Group also
maintains a £30.0 million accordion facility as well as a substantial working
capital position reflecting net cash due to SThree for placements already
undertaken.
During the current period, the Group did not draw down any of the above credit
facilities (H1 FY23: £nil).
On 31 May 2024, the Group had total accessible liquidity of £145.0 million,
made up of £90.0 million in net cash (H1 FY23: £72.4 million), the £50.0
million RCF and a £5.0 million overdraft facility (undrawn at the half-year
end).
Capital allocation
SThree remains disciplined in its approach to allocating capital, with the
core objective at all times being to maximise shareholder value. The Group's
capital allocation policy is reviewed periodically by the Board and was
refreshed at the start of 2024:
• Balance sheet - our intention is to maintain a strong balance sheet at all
times to provide operational flexibility throughout the business cycle.
• Dividend - we aim to pay a sustainable dividend, with a commitment to a
through the cycle dividend cover range of 2.5x to 3.0x of EPS.
• Deployment of capital prioritised in the order of:
1. Organic growth: Investing in our people and ensuring sufficient working
capital on hand to fund growth in the contractor order book while developing
new business opportunities.
2. Business improvement: Digitalising our business, putting in place the
technology and tools that are key to driving both scale and higher margins.
3. Acquisitions: Strict inorganic growth discipline, with a focus on
complementary and value enhancing acquisitions.
4. Capital return to shareholders: After all organic and inorganic opportunities
within an appropriate time horizon have been assessed, further cash returns to
shareholders may be considered.
PRINCIPAL RISKS AND UNCERTAINTIES
Risk management is a key part of our business, values and culture. Effective
risk management enables us to both protect the value of our business and to
proactively manage threats to the delivery of strategic and operational
objectives, while enhancing the realisation of
opportunities.
Our approach to risk management is flexible to ensure that it remains relevant
at all levels of the business, and dynamic to ensure we can be responsive to
changing business/macro-economic
conditions.
During HY24, there continues to be focus on the principal risks with oversight
of activities and controls to further mitigate these risks alongside
monitoring of key risk indicators to ensure any negative changes are
proactively addressed. We continue to make positive progress in risk
mitigation activities and continue to monitor the ongoing broader
macro-economic situation and assess the impact that this could have on
principal risks for the Group.
The principal risks and uncertainties that the Company expects to be exposed
to in the second half of FY24 are substantially the same as those described in
the 'Risk management' section of SThree plc Annual Report and Accounts FY23
(pages 78-82). The only principal risk which has changed from FY23 year-end is
detailed below. All other principal risks for the Group: Future Growth;
Macro-economic Environment; Strategic Change Management; Contractual
Liability; People; Data Privacy; Cyber Security; Regulatory Compliance; and
Health and Safety remain unchanged but with positive movement on mitigating
activities.
Risk Mitigation Change from FY23 year end
Commercial relationship · Robust payment terms oversight through a credit risk dashboard. Slight increase in gross and net risk due to external macro-economic factors
and transitory impact of the transition to a new ERP system.
SThree may suffer financial loss through bad debt write off or working capital · Regular review of high-risk customers with risk mitigation steps
impairment due to inappropriate credit terms agreed when entering into being managed by our credit risk analysts.
commercial relationship/s with either direct customers or intermediaries if
they are unable to fulfil their obligation. · Contract review and payment terms escalation process.
The materialisation of our principal risks, either separately or in
combination, could have an adverse effect on the implementation of our
strategic priorities, our business model, financial performance, cash flows,
liquidity, shareholder value and other key stakeholders.
Please refer to our FY23 Annual Report and Accounts for further detail on our
risks, available at www.sthree.com/en/investors/financial-results/
(http://www.sthree.com/en/investors/financial-results/) .
DIRECTORS' RESPONSIBILITY
STATEMENT
The Directors confirm that to the best of their
knowledge:
(a) the condensed consolidated interim financial statements of
the Group have been prepared in accordance with IAS 34 Interim Financial
Reporting as adopted for use in the United Kingdom and give a true and fair
view of the assets, liabilities, financial position and profit or loss of the
undertakings included in the consolidation as a whole for the period ended 31
May 2024 as required by the Disclosure Guidance and Transparency Rules
sourcebook of the UK FCA (DTR) 4.2.4R; and
(b) the half-year results announcement includes a fair review
of the significant events during the six months ended 31 May 2024 and a
description of the principal risks and uncertainties for the remaining six
months of the year ending 30 November 2024 in line with the requirements of UK
FCA (DTR) 4.2.7R;
(c) the interim management report includes a fair review
of the information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).The Directors of SThree plc are listed in
the SThree plc Annual Report and Accounts for 30 November 2023. A list of the
current Directors is maintained on the Group's website www.sthree.com
(http://www.sthree.com) .
The Group's condensed consolidated interim financial statements, and related
notes, were approved by the Board and authorised for issue on 23 July 2024 and
were signed on its behalf by:
Timo
Lehne
Andrew
Beach
Chief Executive
Officer
Chief Financial
Officer
23 July 2024
Condensed consolidated income statement
for the six months ended 31 May 2024
£'000 Note (Unaudited) (Unaudited)
Six months ended Six months ended
31 May 2024 31 May 2023
Continuing operations
Revenue 2 763,404 825,211
Cost of sales (574,661) (616,620)
Net fees 2 188,743 208,591
Administrative expenses 3 (150,055) (168,232)
Impairment losses on financial assets (987) (2,238)
Operating profit 37,701 38,121
Finance income 1,813 691
Finance costs (514) (321)
Profit before income tax 39,000 38,491
Income tax expense 4 (10,892) (10,816)
Profit for the period attributable to the owners of the Company 28,108 27,675
Earnings per share attributable to shareholders
pence
Total Group
Basic 5 21.2 21.0
Diluted 5 20.8 20.4
The accompanying notes form an integral part of these condensed consolidated
interim financial statements.
Condensed consolidated statement of comprehensive income
For the six months ended 31 May 2024
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2024 31 May 2023
Profit for the period 28,108 27,675
Other comprehensive loss
Items that may be subsequently reclassified to income statement
Exchange differences on retranslation of foreign operations (2,136) (2,117)
Other comprehensive loss for the period (net of tax) (2,136) (2,117)
Total comprehensive income for the period 25,972 25,558
attributable to owners of the Company
The accompanying notes form an integral part of these condensed consolidated
interim financial statements.
Condensed consolidated statement of financial position
as at 31 May 2024
(Unaudited) (Audited)
As at As at
31 May 2024 30 November 2023
£'000 Note
ASSETS
Non-current assets
Property, plant and equipment 31,097 31,116
Intangible assets 6 10,012 7,066
Deferred tax assets 5,805 5,799
Total non-current assets 46,914 43,981
Current assets
Trade and other receivables 331,252 345,120
Cash and cash equivalents 7 90,047 83,202
Total current assets 421,299 428,322
Total assets 468,213 472,303
EQUITY AND LIABILITIES
Equity attributable to owners of the Company
Share capital 8 1,351 1,349
Share premium 8 40,111 39,700
Other reserves (8,602) (3,597)
Retained earnings 193,934 185,432
Total equity 226,794 222,884
Current liabilities
Trade and other payables 195,334 200,132
Lease liabilities 9 10,575 11,297
Provisions 6,653 7,373
Current tax liabilities 10,416 10,746
Total current liabilities 222,978 229,548
Non-current liabilities
Lease liabilities 9 16,443 17,720
Provisions 1,998 2,151
Total non-current liabilities 18,441 19,871
Total liabilities 241,419 249,419
Total equity and liabilities 468,213 472,303
The accompanying notes form an integral part of these condensed consolidated
interim financial statements.
Condensed consolidated statement of changes in equity
for the six months ended 31 May 2024
£'000 Notes Share Share Capital Capital Treasury reserve Currency Fair value reserve of equity investments Retained Total equity attributable to owners of the Company
capital
premium
redemption
reserve
translation
earnings
reserve
reserve
Balance as at 1 December 2023 (audited) 1,349 39,700 172 878 (7,939) 3,305 (13) 185,432 222,884
Profit for the period - - - - - - - 28,108 28,108
Other comprehensive loss for the period - - - - - (2,136) - - (2,136)
Total comprehensive income for the period - - - - - (2,136) - 28,108 25,972
Dividends paid to equity holders 11 - - - - - - - (494) (494)
Dividends payable to equity holders 11 - - - - - - - (15,366) (15,366)
Settlement of vested tracker shares - - - - 51 - - (27) 24
Settlement of share-based payments 8 2 411 - - 7,080 - - (7,250) 243
Purchase of shares by Employee Benefit Trust 8 - - - - (10,000) - - - (10,000)
Credit to equity for equity-settled share-based payments - - - - - - - 3,531 3,531
Total movements in equity 2 411 - - (2,869) (2,136) - 8,502 3,910
Balance as at 31 May 2024 (unaudited) 1,351 40,111 172 878 (10,808) 1,169 (13) 193,934 226,794
1,345 38,239 172 878 (6,581) 4,742 (13) 161,610 200,392
Balance as at 1 December 2022 (audited)
Profit for the period - - - - - - - 27,675 27,675
Other comprehensive loss for the period - - - - - (2,117) - - (2,117)
Total comprehensive income for the period - - - - - (2,117) - 27,675 25,558
Dividends paid to equity holders 11 - - - - - - - (20,542) (20,542)
Settlement of vested tracker shares - - - - 30 - - (15) 15
Settlement of share-based payments 8 1 115 - - 4,552 - - (4,767) (99)
Purchase of shares by Employee Benefit Trust 8 - - - - (10,000) - - - (10,000)
Credit to equity for equity-settled share-based payments - - - - - - - 2,552 2,552
Total movements in equity 1 115 - - (5,418) (2,117) - 4,903 (2,516)
Balance as at 31 May 2023 (unaudited) 1,346 38,354 172 878 (11,999) 2,625 (13) 166,513 197,876
The accompanying notes form an integral part of these condensed consolidated
interim financial statements.
Condensed consolidated statement of cash flows
for the six months ended 31 May 2024
£'000 (Unaudited) (Unaudited)
Six months ended Six months ended
31 May 2024 31 May 2023
Note
Cash flows from operating activities
Profit before tax 39,000 38,491
Adjustments for:
Depreciation and amortisation charge 7,157 8,001
Loss on disposal of property, plant and equipment 80 112
Finance income (1,813) (691)
Finance costs 514 321
Non-cash charge for share-based payments 3,531 2,552
Operating cash flows before changes in working capital and provisions
48,469 48,786
Decrease in receivables 14,980 28,622
Decrease in payables (20,842) (19,603)
Decrease in provisions (940) (2,727)
Cash generated from operations 41,667 55,078
Interest received 1,813 691
Income tax paid - net (11,380) (10,230)
Net cash generated from operating activities 32,100 45,539
Cash flows from investing activities
Purchase of property, plant and equipment (2,355) (1,024)
Purchase of intangible assets 6 (2,653) (1,993)
Net cash used in investing activities (5,008) (3,017)
Cash flows from financing activities
Interest paid (514) (321)
Lease principal payments 9 (6,749) (7,398)
Proceeds from exercise of share options 8 412 116
Purchase of shares by Employee Benefit Trust 8 (10,000) (10,000)
Dividends paid to equity holders 11 (494) (20,542)
Net cash used in financing activities (17,345) (38,145)
Net increase in cash and cash equivalents 9,747 4,377
Cash and cash equivalents at beginning of the period 83,202 65,386
Exchange (losses)/gains relating to cash and cash equivalents (2,902) 2,648
Net cash and cash equivalents at end of the period 7 90,047 72,411
The accompanying notes form an integral part of these condensed consolidated
interim financial statements.
Notes to the CONDENSED CONSOLIDATED Financial REPORT
for the six months ended 31 May 2024
1. basis of preparation and Accounting
policies
Basis of preparation
SThree plc is a public limited company listed on the London Stock Exchange,
incorporated in the United Kingdom and domiciled in the United Kingdom, and
registered in England and Wales. Its registered office is 1(st) Floor, 75 King
William Street, London, EC4N
7BE.
These condensed consolidated interim financial statements (the 'Interim
Financial Report') as at and for the six months ended 31 May 2024 comprise
SThree plc (the 'Company') and its subsidiaries (referred to as the
'Group').
The Group's Interim Financial Report has been prepared in accordance with
International Accounting Standard 34 Interim Financial Reporting as adopted
for use in the United Kingdom (UK), and the Disclosure Guidance and
Transparency Rules sourcebook of the UK's Financial Conduct Authority. It
should be read in conjunction with the SThree plc Annual Report and Accounts
FY23, prepared in accordance with UK-adopted International Accounting
Standards and in conformity with the requirements of the Companies Act 2006 as
applicable to companies reporting under those
standards.
The Interim Financial Report does not constitute statutory accounts as defined
by section 434 of the Companies Act 2006. A copy of the statutory accounts for
the year ended 30 November 2023 has been delivered to the Registrar of
Companies. The auditors reported on those accounts; their report was
unqualified, did not draw attention to any matters by way of emphasis and did
not contain a statement under section 498 (2) or (3) of the Companies Act
2006.
The Interim Financial Report is unaudited and has not been reviewed by the
Group's external auditors.
The Interim Financial Report of the Group was approved by the Board for issue
on 22 July 2024.
Going concern
The financial information contained in this Interim Financial Report has been
prepared on a going concern basis.
The Directors have reviewed the Group's cash flow forecasts, considered the
assumptions contained in the reforecast, and considered associated principal
risks which may impact the Group's performance in the 12 months from the date
of approval of this Interim Financial Report and in the period immediately
thereafter.
At 31 May 2024, the Group had no debt except for lease liabilities of £27.0
million. Credit facilities relevant to the review period comprise a committed
£50.0 million RCF (with the expiry date of 26 July 2027) and an uncommitted
£30.0 million accordion facility, both jointly provided by HSBC and Citibank.
A further uncommitted £5.0 million bank overdraft facility is also held with
HSBC. These facilities remained undrawn on 31 May 2024.
In addition, the Group has £90.0 million of net cash and cash equivalents
available to fund its short-term needs, as well as a substantial working
capital position, reflecting net cash due to SThree for placements already
undertaken.
The Group delivered a good net fee performance in the first half of FY24
against the backdrop of a record prior year performance and tough market
conditions. Across both Contract and Permanent, the Group saw continued strong
demand for Engineering roles, driven primarily by the Energy sector with clean
energy business as the fastest growing segment, while demand for Life Sciences
and Technology roles continued to reflect ongoing market conditions and record
comparatives for Technology.
Regionally, the Group saw strong growth in the Middle East & Asia, driven
by exceptional performance in Japan primarily within Engineering skill
vertical. Within the Group's largest three markets, the Netherlands achieved
stable YoY growth due to very strong Engineering performances, while the USA
was down, driven by declines in Life Sciences and Technology partially offset
by an improving Engineering performance, and Germany was also down in spite of
Engineering and Life Sciences growth, as the decline in Technology outweighed
this
performance.
Based on the analysis performed, the Directors have formed a judgement that at
the time of approving the Interim Financial Report, there are no plausible
downside scenarios that would cause an issue for the Group's going concern
status. The Directors have therefore concluded that the Group has adequate
resources to continue in operational existence for the period through to 31
August
2025.
Accounting policies
The accounting policies used in the preparation of the condensed consolidated
financial statements are consistent with those applied in the previous
financial year and corresponding interim reporting period, except for the
adoption of new and amended standards effective as of 1 December 2023 as set
out below.
New and amended standards effective in FY24 and adopted by the
Group
The following amendments to the accounting standards, issued by the IASB and
endorsed by the UK and EU, have been adopted by the Group which became
applicable as of 1 December 2023. The Group did not have to change its
accounting policies or make retrospective adjustments as a result of adopting
these amended standards.
- Disclosure of Accounting Policies (Amendments to IAS 1
Presentation of Financial Statements and IFRS Practice Statement
2).
- Definition of Accounting Estimates (Amendments to IAS 8
Accounting policies, Changes in Accounting Estimates and Errors).
- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12 Income Taxes).
- IFRS 17 Insurance contracts, a standard that is ultimately
intended to replace IFRS 4 Insurance Contracts.
New and amended standards that are applicable to the Group but not yet
effective
As at the date of authorisation of this Interim Financial Report, the
following amendments to existing standards were in issue but not yet
effective. Subject to the endorsement by the UKEB, these changes are effective
for the period beginning 1 January 2024. These amendments are not expected to
have a material impact on the Group in the current or future
periods.
- New disclosure requirements for characteristics of supplier
finance arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7
Financial Instruments:
Disclosures).
- New requirements for measuring lease liability arising in a sale
and leaseback transaction (Amendments to IFRS 16 Leases).
- New classification requirements for liabilities as current or
non-current (Amendments to IAS 1 Presentation of Financial Statements).
The Group has not early adopted any standard, interpretation or amendment
that has been issued but is not yet effective.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of the Interim Financial Report includes the use of estimates
and assumptions. Although the estimates used are based on the management's
best information about current circumstances and future events and actions,
actual results may differ from these estimates.
In preparing this Interim Financial Report, the judgements made by management
in applying the Group's accounting policies and the key sources of estimation
uncertainty were materially the same as those applied in the Group's FY23
Annual Report and Accounts.
Alternative Performance Measures (APMs)
The Group presents certain measures of financial performance or financial
position in the Interim Financial Report that are not defined or specified
according to IFRS. These measures, referred to as APMs, are defined and
reconciled to IFRS in note 16 to the condensed consolidated financial
statements, and were prepared on a consistent basis for all periods
presented.
2. operating segments
The Group's operating segments are established on the basis of those
components of the Group that are regularly reviewed by the Group's chief
operating decision-making body (the 'CODM'), in deciding how to allocate
resources and in assessing performance. The Group's business is considered
primarily from a geographical perspective.
The Directors have determined the CODM to be the Executive Committee made up
of the Chief Executive Officer, the Chief Financial Officer, the Chief
Operating Officer, the Chief Commercial Officer and the Chief People Officer,
with other senior management attending via invitation.
The Group also presents separately the net fees of its five key markets:
Germany, the Netherlands, USA, the UK and Japan, as well as a breakdown of net
fees per Contract and Permanent, referred to as 'service mix'.
DACH region comprises Austria, Germany and Switzerland. Rest of Europe
comprises the UK, Belgium and France, and Middle East & Asia includes
Japan and
UAE.
Countries aggregated into DACH and separately into Rest of the Europe have
similar economic risks and prospects, i.e. they are expected to generate
similar average gross margins over the long term, and are similar in each of
the following areas:
- the nature of the services (recruitment/candidate placement);
- the class of candidates (candidates, who we place with our
clients, represent skill-sets in Science, Technology, Engineering and
Mathematics
disciplines);
- the methods used in which they provide services to clients
(independent contractors, employed contractors and permanent candidates);
and
- the class of candidates (candidates, who we place with our
clients, represent skillsets in Science, Technology and Engineering
disciplines).
The Group's management reporting and controlling systems use accounting
policies that are the same as those described in these financial statements
and in the Group's FY23 annual financial
statements.
Revenue and net fees by reportable segment
The Group assesses the performance of its operating segments through a measure
of segment profit or loss which is referred to as 'net fees' in the management
reporting and controlling systems. Net fees is the measure of segment profit
comprising revenue less cost of
sales.
Revenue (unaudited) Net fees (unaudited)
Six months ended Six months ended
£'000 31 May 2024 31 May 2023 31 May 2024 31 May 2023
DACH 229,962 264,512 64,197 74,476
Rest of Europe 181,709 197,221 31,311 35,178
Netherlands including Spain 175,913 177,497 41,121 39,381
USA 154,463 164,019 41,841 49,364
Middle East & Asia 21,357 21,962 10,273 10,192
763,404 825,211 188,743 208,591
Timing of revenue recognition
The Group derives revenue from the transfer of services over time and at a
point in time in the following geographical regions:
For the six months ended 31 May 2024 DACH Rest of Europe Netherlands including Spain USA Middle East & Asia Total
(unaudited)
£'000
Timing of revenue recognition
Over time 215,014 180,691 171,249 150,515 14,341 731,810
At a point in time 14,949 1,018 4,664 3,948 7,015 31,594
229,963 181,709 175,913 154,463 21,356 763,404
For the six months ended 31 May 2023 (unaudited) DACH Rest of Europe Netherlands including Spain USA Middle East & Asia Total
£'000
Timing of revenue recognition
Over time 243,756 195,014 173,260 157,188 15,743 784,961
At a point in time 20,756 2,207 4,237 6,831 6,219 40,250
264,512 197,221 177,497 164,019 21,962 825,211
Major customers
In the current and prior financial period, no single customer generated more
than 10% of the Group's revenue.
Other information
The Group's revenue from external customers, its net fees and information
about its segment assets (non-current assets excluding deferred tax assets) by
key location are detailed below:
Revenue (unaudited) Net fees (unaudited)
Six months ended Six months ended
£'000 31 May 2024 31 May 2023 31 May 2024 31 May 2023
Germany 197,779 229,247 55,976 65,740
Netherlands 164,176 170,103 37,489 37,252
USA 154,463 164,019 41,841 49,364
UK 118,145 128,305 19,977 21,938
Japan 6,184 4,989 4,849 4,380
RoW((1)) 122,657 128,548 28,611 29,917
763,404 825,211 188,743 208,591
(Unaudited) (Audited)
As at As at
£'000 31 May 2024 30 November 2023
Non-current assets
UK 14,435 11,458
Germany 12,232 11,891
Netherlands 5,097 5,678
USA 4,083 2,687
Japan 2,137 2,730
RoW((1)) 3,125 3,738
41,109 38,182
(1) RoW (Rest of the World) includes all countries other than
listed.
Non-current assets do not include deferred tax assets as they are not reviewed
by the CODM.
The following segmental analysis by brands, recruitment classification and
sectors (being the profession of candidates placed) have been included as
additional disclosure to the requirements of IFRS 8.
Revenue (unaudited) Net fees (unaudited)
Six months ended Six months ended
£'000 31 May 2024 31 May 2023 31 May 2024 31 May 2023
Brands
Progressive 282,691 269,946 69,935 68,832
Computer Futures 233,412 273,869 59,321 69,924
Real Staffing Group 127,120 162,941 32,946 43,377
Huxley Associates 120,181 118,455 26,541 26,458
763,404 825,211 188,743 208,591
Other brands, including Global Enterprise Partners, JP Gray and Madison Black,
are rolled into the above brands.
Revenue (unaudited) Net fees (unaudited)
Six months ended Six months ended
£'000 31 May 2024 31 May 2023 31 May 2024 31 May 2023
Service mix
Contract 731,810 784,961 158,712 169,982
Permanent 31,594 40,250 30,031 38,609
763,404 825,211 188,743 208,591
Revenue (unaudited) Net fees (unaudited)
Six months ended Six months ended
£'000 31 May 2024 31 May 2023 31 May 2024 31 May 2023
Skills mix
Technology 379,894 423,393 90,153 101,712
Engineering 214,894 194,579 53,956 51,223
Life Sciences 116,067 139,210 31,618 38,958
Other 52,549 68,029 13,016 16,698
763,404 825,211 188,743 208,591
3. administrative expenses
Operating profit is stated after charging:
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2024 31 May 2023
Staff costs 115,691 128,246
Depreciation 7,145 8,001
Amortisation 12 -
Loss on disposal of property, plant and equipment 80 112
Impairment losses on financial assets 987 2,238
Service lease charges - Buildings 888 1,071
Service lease charges - Cars 407 306
Foreign exchange losses 539 1,286
The Group establishes an allowance for doubtful accounts that represents an
estimate of an expected credit losses (ECLs) in respect of trade and other
receivables. In the current financial period, management increased ECLs by a
net amount of £1.0 million for certain debtors exposure due to the ongoing
macro-economic challenges, which led to additional insolvencies across the
Group's portfolio.
4. income tax expense
Income tax for the half year is accrued based on the Directors' best estimate
of the average annual effective tax rate (ETR) for the financial year. The tax
charge for the half year amounted to £10.9 million (H1 FY23: £10.8 million)
at an ETR of 27.9% (H1 FY23: 28.1%). The Group's ETR primarily varies with the
mix of taxable profits by territory, non-deductibility of the accounting
charge for LTIP's and other one-off tax items.
A deferred tax asset of £5.8 million (as at 30 November 2023: £5.8 million)
was recognised in the financial statements as at 31 May 2024. This comprised
deferred tax assets of £5.8 million (as at 30 November 2023: £5.8 million)
and deferred tax liabilities of £nil (as at 30 November 2023: £nil). The
deferred tax assets arise on accelerated depreciation, share based payments
and provisions. The movement in the period arises primarily on share based
payments.
At the reporting date, the Group had unused tax losses of £27.6 million (as
at 30 November 2023: £27.3 million) available for offset against future
profits. No deferred tax asset was recognised against these
losses.
On 17 November 2022, the UK Government confirmed its intention to implement
the G20-OECD Inclusive Framework Pillar 2 rules in the UK, including a
Qualified Domestic Minimum Top-Up Tax rule. This legislation, which was
enacted on 11 July 2023, will seek to ensure that UK-headquartered
multinational enterprises pay a minimum tax rate of 15% on UK and overseas
profit for accounting periods commencing after 31 December 2023. As the UK
rate of corporation tax in 2024 will be 25%, and the Group's business is
primarily in the UK and other jurisdictions with a tax rate of 25% or above,
the impact of these rules on the Group is not expected to be material.
5. Earnings per share
Basic earnings per share (EPS) is calculated by dividing the profit for the
year attributable to owners of the Company by the weighted average number of
ordinary shares outstanding during the period excluding shares held as
treasury shares and those held in the Employee Benefit Trust, which for
accounting purposes are treated in the same manner as shares held in the
treasury reserve.
Diluted EPS is calculated by adjusting the weighted average number of ordinary
shares outstanding to assume conversion of all dilutive ordinary shares
arising from exercising employee stock options and tracker shares.
The following tables reflect the income and share data used in the basic and
diluted EPS calculations.
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2024 31 May 2023
Earnings
Profit for the period attributable to the owners of the Company 28,108 27,675
(Unaudited) (Unaudited)
Six months ended Six months ended
millions 31 May 2024 31 May 2023
Number of shares
Weighted average number of shares used for basic EPS 132.6 131.9
Dilutive effect of share plans 2.7 3.5
Diluted weighted average number of shares used for diluted EPS 135.3 135.4
(Unaudited) (Unaudited)
Six months ended Six months ended
pence 31 May 2024 31 May 2023
Basic EPS 21.2 21.0
Diluted EPS 20.8 20.4
6. Intangible assets
Since the FY23 year end, the Group increased its intangible assets book value
by £2.9 million to £10.0 million (FY23: £7.1 million) due to ongoing
investment and gradual regional roll-out of the Technology Improvement
Programme (TIP) cohorts. In the current period, the Group also incurred £0.9
million for costs which were not directly attributable to the assets developed
under the Programme (such as project management and other
administration-related tasks) and which were expensed immediately to the
income statement.
At the reporting date, all the costs capitalised in the statement of financial
position were classified as assets under construction.
The asset amortisation is expected to commence at the end of the current
financial year at the earlier of (i) US and Germany deployment, including
interim ECM solution, be fully completed, or (ii) US and Netherlands
deployment be fully completed. Successful resolution of the challenges faced
during these deployments will provide management with assurance that any
possible insurmountable problems in all other regions will be overcome, and
the programme implementation will ultimately succeed across the entire Group.
7. Cash and cash equivalents
(Unaudited) (Audited)
As at As at
£'000 31 May 2024 30 November 2023
Cash at bank 90,047 83,202
Net cash and cash equivalents 90,047 83,202
Cash and cash equivalents comprise cash and short-term bank deposits with an
original maturity of three months or less, net of outstanding bank overdrafts.
The carrying amount of these assets approximate their fair values. All of
these assets are categorised within level 1 of the fair value hierarchy.
The Group has four cash pooling arrangements in place at HSBC US (USD), HSBC
UK (GBP), NatWest (GBP) and Citibank (EUR).
8. SHARE CAPITAL
During the current financial period, 157,416 (H1 FY23: 38,778) new ordinary
shares were issued, resulting in a share premium of £0.4 million (H1 FY23:
£0.1 million). These shares were issued pursuant to the exercise of share
awards under the Save-As-You-Earn scheme.
Treasury Reserve
Treasury reserve represents SThree plc shares repurchased and available for
specific and limited purposes.
No shares were purchased by, or utilised from, the treasury reserve during the
current and previous financial period. At the period end, 35,767 (H1 FY23:
35,767) shares were held in the treasury
reserve.
Employee Benefit Trust
The Group holds shares in the Employee Benefit Trust (EBT). The EBT is funded
entirely by the Company and acquires shares in SThree plc to satisfy awards
and grants under certain employee share-based payment schemes.
For accounting purposes shares held in the EBT are treated in the same manner
as shares held in the treasury reserve by the Company and are, therefore,
included in the Group financial statements as treasury reserve.
In the six months ended 31 May 2024, the EBT purchased 2,340,585 (H1 FY23:
2,198,735) of SThree plc shares. The average price paid per share was 427
pence (H1 FY23: 455 pence). The total acquisition cost of the purchased shares
was £10.0 million (H1 FY23: £10.0 million), for which the treasury reserve
was reduced. During the period, the EBT utilised 1,665,426 (H1 FY23:
1,101,288) shares on settlement of Long-Term Incentive Plan and ShareMatch
awards. At the period end, the EBT held 2,598,617 (H1 FY23: 2,868,593) shares.
9. leases
The leases which are recorded on the condensed consolidated statement of
financial position are principally in respect of buildings and cars.
The Group's right-of-use assets and lease liabilities are presented below:
(Unaudited) (Audited)
As at As at
£'000 31 May 2024 30 November 2023
Buildings 23,971 24,772
Cars 1,407 1,934
Total right of use assets 25,378 26,706
Current lease liabilities 10,575 11,297
Non-current lease liabilities 16,443 17,720
Total lease liabilities 27,018 29,017
The condensed consolidated income statement includes the following amounts
relating to depreciation of right-of-use assets:
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2024 30 May 2023
Buildings 5,504 5,849
Cars 527 616
IT equipment 29 -
Total depreciation charge of right-of-use assets 6,060 6,465
In the current period interest expense on leases amounted to £0.4 million (H1
FY23: £0.3 million) and was recognised within finance costs in the condensed
consolidated income statement.
The total cash outflow for leases in six months ended 31 May 2024 was £7.1
million (H1 FY23: £7.7 million) and comprised the principal and interest
element of recognised lease liabilities.
10. other financial liabilities
As at 31 May 2024, the Group maintains a committed Revolving Credit Facility
(RCF) of £50.0 million along with an uncommitted £30.0 million accordion
facility, both jointly provided by HSBC and Citibank, giving the Group an
option to increase its total borrowings under the facility to £80.0 million.
During the current and previous period, the Group did not draw down under
these facilities. The Group has also an uncommitted £5.0 million overdraft
facility with HSBC of which £nil was drawn at the half year end (as at 30
November 2023: £nil).
The RCF is subject to financial covenants and any funds borrowed under the
facility bear a minimum annual interest rate of 1.2% above the benchmark
Sterling Overnight Index Average (SONIA). In the six months ended 31 May 2024,
the Group incurred of £0.5 million in finance costs (H1 FY23: £0.3 million)
which were mainly related to lease interest.
The covenants which the RCF is subject to, require the Group to maintain
financial ratios over interest cover, leverage and guarantor cover. The Group
has complied with these covenants throughout the current and prior period.
The Group's exposure to interest rates, liquidity, foreign currency and
capital management risks is disclosed in the Group's FY23 annual financial
statements.
11. Dividends
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2024 31 May 2023
Amounts recognised as distributions to equity holders in the period
Interim dividend of 5.0 pence for FY23 (5.0 pence for FY22) per share 494 6,605
Final dividend of 11.6 pence for FY23 (11.0 pence for FY22) per share 15,366 13,937
15,860 20,542
The interim dividend for the year ended 30 November 2023 of 5.0 pence (FY22:
5.0 pence) per share was paid on 8 December 2023 to those shareholders on the
register of SThree plc on 10 November 2023. However, the £6.4 million in
funds, required for settlement of the FY23 interim dividend, were first
transferred by the Group to the share administrator before 30 November 2023.
The £0.5 million shown above as FY23 interim dividend distributed in H1 FY24
includes £0.3 million in payments to shareholders who claimed FY23 interim
dividend post the year end. The remaining balance, £0.2 million, relates to
the unclaimed dividends due to shareholders from prior years (2019-2023). The
£0.2 million in funds have been transferred to share administrator in H1 FY24
and is currently subject to the distribution to shareholders.
The final dividend for the year ended 30 November 2023 of 11.6 pence (FY22:
11.0 pence) per share was approved by shareholders at the Annual General
Meeting on 25 April 2024. The £15.4 million in funds, required for settlement
of the FY23 final dividend, were first transferred to the share administrator
on 3 June 2024, and the final dividend was paid on 7 June 2024 to those
shareholders on the register of SThree plc on 10 May 2024.
12. Contingent liabilities
Legal
The Group is involved in various disputes and claims which arise from time to
time in the course of its business. These are reviewed on a regular basis and,
where possible, an estimate is made of the potential financial impact on the
Group. The Group has contingent liabilities in respect of these claims. In
appropriate cases, a provision is recognised based on advice, best estimates
and management judgement.
The Directors believe that currently the likelihood of any material
liabilities materialising is low, and that such liabilities, if any, will not
have a material adverse effect on the Group's financial position.
13. RELATED PARTY DISCLOSURES
The Group's significant related parties are as disclosed in the Group's FY23
annual financial statements. There have been no significant changes to the
nature of its related party transactions as disclosed in note 22 of the SThree
plc's Annual Report and Accounts FY23.
14. Shareholder communications
SThree plc has taken advantage of regulations which provide an exemption from
sending copies of its Interim Financial Report to shareholders. Accordingly,
the FY24 Interim Financial Report will not be sent to shareholders but will be
available on the Company's website www.sthree.com or can be inspected at the
registered office of the Company.
15. Subsequent events
There were no subsequent events following 31 May 2024 requiring disclosure or
adjustment.
16. ALTERNATIVE PERFORMANCE MEASURES (APMs): definitions and reconciliations
In discussing the performance of the Group, comparable measures are used.
The Group discloses comparable performance measures to enable users to focus
on the underlying performance of the business on a basis which is common to
both periods for which these measures are presented. The reconciliation of
comparable measures to the directly related measures calculated in accordance
with IFRS is as follows.
APMs in constant currency
As the Group operates in 11 countries and with many different currencies, it
is affected by foreign exchange movements, and the reported financial results
reflect this. However, the Group business is managed against targets which are
set to be comparable between years and within them, for otherwise foreign
currency movements would undermine the management ability to drive the
business forward and control it. Within this Interim Financial Report,
comparable results have been highlighted on a constant currency basis as well
as the results on a reported basis which reflect the actual foreign currency
effects experienced.
The Group evaluates its operating and financial performance on a constant
currency basis (i.e. without giving effect to the impact of variation of
foreign currency exchange rates from period to period). Constant currency APMs
are calculated by applying the prior period foreign exchange rates to the
current and prior financial period results to remove the impact of exchange
rate.
Measures on a constant currency basis enable users to focus on the performance
of the business on a basis which is not affected by changes in foreign
currency exchange rates applicable to the Group's operating activities from
period to period.
The calculations of the APMs on a constant currency basis and the
reconciliation to the most directly related measures calculated in accordance
with IFRS are as
follows:
31 May 2024 (unaudited)
£'000, unless otherwise stated Revenue Net fees Operating profit Operating profit conversion ratio* Profit before tax Basic EPS
Reported 763,404 188,743 37,701 20.0% 39,000 21.2p
Currency impact 17,282 4,976 1,487 0.2% 1,511 0.8p
In constant currency 780,686 193,719 39,188 20.2% 40,511 22.0p
31 May 2023 (unaudited)
£'000, unless otherwise stated Revenue Net fees Operating profit Operating profit conversion ratio* Profit before tax Basic EPS
Reported 825,211 208,591 38,121 18.3% 38,491 21.0p
Currency impact (34,734) (9,102) (3,254) (0.8%) (3,233) (1.8p)
In constant currency 790,477 199,489 34,867 17.5% 35,258 19.2p
*Operating profit conversion ratio represents operating profit over net fees.
To calculate the YoY variances in constant currency, management compared the
H1 FY24 results in constant currency versus the H1 FY23 reported results.
Other APMs
Net cash excluding lease liabilities
Net cash is an APM used by the Directors to evaluate the Group's capital
structure and leverage. Net cash is defined as cash and cash equivalents less
current and non-current borrowings excluding lease liabilities, less bank
overdraft, as illustrated below:
(Unaudited) (Audited)
As at As at
£'000 31 May 2024 30 November 2023
Cash and cash equivalents 90,047 83,202
Net cash 90,047 83,202
EBITDA
In addition to measuring financial performance of the Group based on operating
profit, the Directors also measure performance based on EBITDA. It is
calculated by adding back to the reported operating profit operating non-cash
items such as the depreciation of property, plant and equipment (PPE), the
amortisation and impairment of intangible assets, loss on disposal of PPE and
intangible assets, gain on lease modification and the employee share options
charge. Where relevant, the Group also uses EBITDA to measure the level of
financial leverage of the Group by comparing EBITDA to net debt.
A reconciliation of reported operating profit for the period, the most
directly comparable IFRS measure, to EBITDA is set out
below.
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2024 31 May 2023
Reported operating profit for the period 37,701 38,121
Depreciation of PPE 7,145 8,001
Amortisation and impairment of intangible assets 12 -
Loss on disposal of PPE and intangible assets 80 112
Employee share options charge 3,531 2,552
EBITDA 48,469 48,786
Contract margin
The Group uses contract margin as an APM to evaluate contract business quality
and the service offered to customers. Contract margin is defined as contract
net fees as a percentage of contract revenue.
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000, unless otherwise stated 31 May 2024 31 May 2023
Contract net fees A 158,712 169,982
Contract revenue B 731,810 784,961
Contract margin (A ÷ B) 21.7% 21.7%
Financial Calendar
24 September 2024 FY24 Q3
Trading Update
30 November 2024 2024
Financial Year End
17 December 2024 FY24
Trading Update
28 January 2025
FY24 Final Results
1 (#_ftnref1) The Group has identified and defined certain alternative
performance measures (APMs). These are the key measures the Directors use to
assess the SThree's underlying operational and financial performance. The APMs
are fully explained and reconciled to IFRS line items in note 16 to the
consolidated financial statements.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR QKBBDCBKDOOBRecent news on SThree
See all newsREG - SThree plc - FY25 Half Year Trading Update
AnnouncementREG - SThree plc - Director Declaration
AnnouncementREG - SThree plc - Holding(s) in Company
AnnouncementREG - SThree plc - Director/PDMR Shareholding
AnnouncementREG - SThree plc - Director/PDMR Shareholding
Announcement