Interim Management Statement

RNS Number : 3158C

SThree plc

04 March 2011

 





Q1 Interim Management Statement

SThree plc ("SThree" or the "Group"), the international specialist staffing business, is today issuing an Interim Management Statement covering the period from 29 November 2010 to date; financial information relates to the quarter ended 27 February 2011.

Highlights:

·    All regions continuing to show improving performance

·    Permanent gross profit up 32%* year on year

·    Contract gross profit up 8%* year on year

·    Group gross profit up 19%* year on year

·    Permanent deal pipeline volume up in excess of 30% year on year

·    Strong financial position with net cash of circa £49m at period end

Group gross profit achieved in the first quarter increased by 19%* year on year to circa £42m (2010: £35.8m). UK gross profit increased by 12% and non-UK gross profit increased by 24%*. Non-UK now represents 63% of gross profit (2010 full year: 60%). Permanent gross profit increased by 32%* and Contract gross profit increased by 8%*. In the quarter, Permanent represented 50% of gross profit (2010 full year: 49%).

During the quarter SThree made a total of 1,604** permanent placements, an increase of 19% over the prior year (2010: 1,344**). Average placement fees remained strong. At the end of the first quarter SThree had 4,207 active contractors, an increase of 8% on the same quarter in the prior year (2010: 3,906) and a seasonal decline of 3% on the year end number (28 November 2010: 4,359). Average contractor gross profit per day rates have remained strong. 

During the quarter, UK permanent placements were up 11% year on year. Average UK permanent placement fees have remained strong. At the end of the first quarter UK contract runners were level year on year and UK gross profit per day rates remained robust.  

During the quarter, non-UK permanent placements increased by 31% year on year and average fees remained robust. At the end of the first quarter non-UK contract runners increased by 18% year on year, with gross profit per day rates remaining strong.

The current permanent deal pipeline reflects continuing improvements across all regions. At 27 February 2011, the number of permanent deals agreed, with candidates due to start, was up more than 30% year on year.

Group sales headcount at 27 February 2011 was up 2.7% versus the year end, and up 11.2% year on year. UK sales headcount was up 4.7% year on year, and up 0.4% quarter on quarter, and non-UK sales headcount was up 15.9% year on year, and up 4.2% quarter on quarter. The Group had 188 live sales vacancies at the end of the quarter.

The Group has 52 offices and plans to open new offices in Sao Paulo, Doha and Antwerp during the first half of 2011.

The Group remains in a strong cash position with net cash of circa £49m at 27 February 2011. 

Russell Clements, Chief Executive, commented:

"For seasonal reasons, the first quarter is the Group's least significant in terms of the year as a whole. Nonetheless, it is encouraging to see that all of the regions in which we operate have remained on an upward trend. We also take confidence from our deal pipeline, with deals agreed but yet to start up by more than 30% year on year. In addition, the performance of our contract business during the quarter has been the strongest in recent years. We have started 2011 in good shape to take full advantage of an improving market opportunity and as a more international and diversified business than at any time in our history."

* at constant currency

** excludes retained business

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

Telephone number:  + 44 (0) 20 8817 9301     

For access to the call please quote Confirmation Code: 4392469

The Group will issue a trading update for the six months ended 29 May 2011 on 8 June 2011.

- Ends -

Enquiries:

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

Notes to editors

SThree is a leading international specialist staffing businesses, providing permanent and contract specialist staff to a diverse client base of over 7,000 clients. From its well-established position as a major player in the information and communications technology ("ICT") sector the Group has broadened the base of its operations to include businesses serving the accountancy & finance, banking, engineering, oil & gas, pharmaceuticals, human resources, energy, legal and job board sectors.

Since launching its original business, Computer Futures, in 1986, the Group has adopted a multi-brand strategy, establishing new operations to address growth opportunities. SThree brands include Computer Futures, Huxley Associates, Progressive and The Real Staffing Group. The Group has circa 1,900 employees in twelve 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. Accordingly, undue reliance should not be placed on forward looking statements.

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