Trading Statement

RNS Number : 3032X

SThree plc

03 December 2010

 



Embargoed until 0700

3 December 2010

SThree plc

Trading Update

SThree plc ("SThree" or the "Group"), the international specialist staffing business, is today issuing a trading update for the financial year ended 28 November 2010.

Highlights:

·     All markets now improving and in growth

·     Full year results expected to be slightly ahead of market consensus

·     Group Gross Profit of circa £167m, down 2% year on year (2009: £171.1m)

·     Permanent Gross Profit up 15%* year on year for the full year and up 53%* year on year in Q4

·     Contract Gross Profit down 12%* year on year for the full year, but up 4%* year on year in Q4

·     Greater geographical diversification, with non-UK share of gross profit now at 60% (2009: 55%) and 6 new overseas offices opened during the year

·     Year end net cash of circa £53m (2009: £48.5m)

SThree closed the year with 4,359 contract runners, up 4.9% year on year (2009: 4,157) and a 6.5% increase on Q3's runners of 4,093. Average contractor gross profit per day rates have remained strong in the period.

SThree made 6,551** permanent placements that started in the year, an increase of 8.3% year on year (2009: 6,060) and sequentially up 20.4% Q4 vs Q3.  Average placement fees for the year have remained strong.

The current permanent deal pipeline reflects improvements across all markets. At 28 November 2010, the number of permanent deals agreed in the period, with candidates due to start in the future, were up more than 40% year on year.

The Group has continued to become more diversified.  For the full year, the Board estimates that non-UK Gross Profit now represents 60% of the Group Gross Profit (2009: 55%). During the year 6 new offices were opened, in Perth, Delhi, Houston, San Francisco, Munich and Düsseldorf, bringing the total to 52. Further new offices in Qatar and Antwerp are due to open in Q1 2011 and in Sao Paulo in Q2 2011.

The Board estimates that Contract Gross Profit now represents 51% of gross profit (2009: 58%) and non-ICT represents 38% of Group Gross Profit (2009: 28%).

For the full year 2010, public sector accounted for circa 6% of Group transactions versus 12% in 2009. As expected, the proportion of public sector transactions in Q4 remained at 5%, in line with Q3.

Total Group headcount as at 28 November 2010 of 1,863 was up 16.7% year on year (2009: 1,597), and up 4.8% on the half year 2010 position of 1,777 heads. In Q4 we consciously slowed down the rate of hiring, in line with normal seasonality. In 2011 we expect to continue to grow headcount based upon the same objective criteria that we have applied during the current year.

The Group remains in a strong net cash position, with net cash of circa £53m at the year end (2009: £48.5m).  DSOs have remained level at 37 days (2009: 37 days). The Group has committed facilities of £20m, which were not utilised during the period.

Given the strong financial position of the Group and the balanced business model, the Board remains robustly committed to its dividend policy.

Russell Clements, Chief Executive, commented:

"Our performance remains consistent with improving markets across all of the geographies in which we operate. By the final quarter of the year, all of our markets were showing both year on year and sequential growth.

"During the year we grew our sales headcount substantially and opened six new international offices. We also made further progress in terms of sector diversification. Taken as a whole I am very satisfied with our performance in 2010. We are now a more international and diverse business than at any time in our history, well positioned to achieve our global growth plans."

SThree is hosting an analyst conference call today at 0830 GMT. The dial in number is + 44 (0)20 8817 9301 and the password is SThree.

SThree will announce its results for the year ended 28 November 2010 on Monday 31 January 2011.

* at constant currency

**excludes retained business

- Ends -

Enquiries:

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

Notes to editors

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