Share Name Share Symbol Market Type Share ISIN Share Description
Sthree Plc LSE:STHR London Ordinary Share GB00B0KM9T71 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -1.25p -0.38% 323.75p 323.25p 324.25p 325.00p 322.75p 322.75p 25,841.00 12:09:29
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 959.9 37.3 21.2 15.3 420.01

Q1 Trading Update

17/03/2017 7:01am

UK Regulatory (RNS & others)


Dow Jones received a payment from EQS/DGAP to publish this press release.

 
 
 SThree (STHR) 
Q1 Trading Update 
 
17-March-2017 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
17 March 2017 
 
*Q1 Trading Update* 
 
SThree plc ('SThree' or the 'Group'), the international specialist staffing 
business, is today issuing a trading update covering the period from 1 
December 2016 to date; financial information relates to the quarter ended 28 
February 2017. 
 
*Highlights* 
 
  · Group gross profit ('GP') flat* YoY in Q1 
 
    · Robust performance in Continental Europe +7%* (Q4 2016: +8%*) 
 
    · Strong performance in the USA +12%* YoY (Q4 2016: +1%*), now 
    representing 22% of Group GP 
 
    · UK&I performance as expected adversely impacted by the EU Referendum 
    result and Public Sector reforms, with GP -19%* YoY (Q4 2016: -12%*) 
 
    · Continued growth across ICT (+2%* YoY) and Life Sciences (+4%* YoY) 
 
  · 80% of Group GP generated from markets outside the UK&I (2016: 72%) 
 
  · Contract GP up 7%* YoY (Q4 2016: +5%*) with strong growth across 
  Engineering (+22%* YoY) and Life Sciences (+17%* YoY) 
 
  · Contract represented 70% of Group GP (Q1 2016: 66%) 
 
  · Permanent GP down 14%* YoY, with average sales headcount down 18% 
 
  · Group period-end sales headcount was 2% below 2016 year-end position and 
  8% down YoY 
 
Gary Elden, Chief Executive, commented: 'Overall, we've made a satisfactory 
start to the year in what is our seasonally least significant quarter. 
 
'Our Contract business continues to grow robustly. We were also pleased to 
see momentum re-established in the USA, where GP grew by 12% in the first 
quarter, a significant acceleration from H2 2016. 
 
'Contract GP increased by 7%* year on year, driven by continued strong 
growth in Continental Europe, where Contract GP was ahead by 17%* in the 
first quarter. 
 
'Our Permanent business benefited from a further improvement in 
productivity, driven by a particularly strong performance in USA, which was 
up 16% YoY in Q1. Further productivity gains will remain the priority for 
our Permanent business in 2017. 
 
'Looking ahead, political and macro-economic uncertainty remains at 
heightened levels in a number of our key regions. Against this background, 
we are managing the business prudently and continue to invest in our highest 
performing teams. Our focus on Contract, the continued strength of our 
performance in Continental Europe, our greater momentum in the USA and firm 
control of our cost base, leave us well positioned for the future.' 
 
*Key Metrics & Commentar**y* 
 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|*Financial Highlights - Group Gross Profit*                      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        | *Q1 |  | *Q4 | *Q3 | *Q2 | *Q1  | 
|             |        |        |2017*|  |2016*|2016*|2016*|2016* | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|*Gross       |  *Q1   |  *Q1   |*YoY |  |*YoY |*YoY |*YoY |*YoY %| 
|Profit*      | 2017*  | 2016*  |% *1 |  |% *1 |% *1 |% *1 |  *1  | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Contract     |GBP45.6m  |GBP38.2m  | +7% |  | +5% | +6% |+10% | +11% | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Permanent    |GBP19.5m  |GBP19.8m  |-14% |  |-10% |-15% |-12% | +9%  | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|*Group*      |*GBP65.1m* |*GBP58.0m* | *-* |  | *-* |*-2%*|*+2%*|*+10%*| 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|UK&I         |GBP13.0m  |GBP16.0m  |-19% |  |-12% | -9% | -9% |  -   | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Continental  |GBP34.0m  |GBP27.5m  | +7% |  | +8% |+12% |+16% | +20% | 
|Europe       |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|USA          |GBP14.2m  |GBP10.7m  |+12% |  | +1% |-10% |  -  | +14% | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Asia Pac &   |GBP3.9m   |GBP3.8m   |-14% |  | -4% |-26% |-18% | -13% | 
|Middle East  |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|*Group*      |*GBP65.1m* |*GBP58.0m* | *-* |  | *-* |*-2%*|*+2%*|*+10%*| 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|ICT          |GBP29.5m  |GBP26.0m  | +2% |  | +6% | +8% |+15% | +20% | 
|Banking &    |GBP9.8m   |GBP9.5m   | -8% |  |-10% |-16% |-14% | +6%  | 
|Finance      |GBP5.1m   |GBP4.8m   | -8% |  |-24% |-32% |-28% | -34% | 
|Energy       |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Engineering  |GBP5.6m   |GBP5.1m   | -1% |  | +6% | +9% | +1% | +21% | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Life Sciences|GBP14.1m  |GBP11.5m  | +4% |  | +6% | +4% | +7% | +19% | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Other 3      |GBP1.0m   |GBP1.1m   | +4% |  |-11% | -3% |+11% | +15% | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|*Group*      |*GBP65.1m* |*GBP58.0m* | *-* |  | *-* |*-2%*|*+2%*|*+10%*| 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|*Contract /  |        |        |     |  |     |     |     |      | 
|Perm Split*  |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Contract     |  70%   |  66%   |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Permanent    |  30%   |  34%   |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             | *100%* | *100%* |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|*Geographical|        |        |     |  |     |     |     |      | 
|Split*       |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|UK&I         |  20%   |  28%   |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Continental  |  52%   |  47%   |     |  |     |     |     |      | 
|Europe       |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|USA          |  22%   |  18%   |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Asia Pac &   |   6%   |   7%   |     |  |     |     |     |      | 
|Middle East  |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             | *100%* | *100%* |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|*Sector      |        |        |     |  |     |     |     |      | 
|Split*       |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|ICT          |  45%   |  45%   |     |  |     |     |     |      | 
|Banking &    |  15%   |  16%   |     |  |     |     |     |      | 
|Finance      |   8%   |   8%   |     |  |     |     |     |      | 
|Energy       |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Engineering  |   9%   |   9%   |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Life Science |  22%   |  20%   |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Other 3      |   1%   |   2%   |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             | *100%* | *100%* |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        | *Q1 |  | *Q4 | *Q3 | *Q2 | *Q1  | 
|             |        |        |2017*|  |2016*|2016*|2016*|2016* | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|*Operating   |  *Q1   |  *Q1   |*YoY |  |*YoY |*YoY |*YoY | *YoY | 
|Metrics*     | 2017*  | 2016*  | %*  |  | %*  | %*  | %*  |  %*  | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|*Contract    |        |        |     |  |     |     |     |      | 
|Runners *2   |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|UK&I         | 2,568  | 2,795  | -8% |  | -8% | -3% | -6% | -3%  | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Continental  | 4,390  | 3,702  |+19% |  |+20% |+18% |+18% | +21% | 
|Europe       |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|USA          | 1,419  | 1,241  |+14% |  | +5% |  -  | +8% | +18% | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|Asia Pac &   |  501   |  422   |+19% |  |+17% | +3% | +5% | +6%  | 
|Middle East  |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|*Group*      |*8,878* |*8,160* |*+9%*|  |*+8%*|*+7%*|*+7%*|*+10%*| 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|             |        |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|_1 At constant        |        |     |  |     |     |     |      | 
|currency_             |        |     |  |     |     |     |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|_2 Period end number of contractors onsite with           |      | 
|clients_                                                  |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
|_3 Other Sectors include Banking & Finance and            |      | 
|Engineering_                                              |      | 
+-------------+--------+--------+-----+--+-----+-----+-----+------+ 
 
Q1 Group gross profit ('GP') was flat* YoY (Q4: flat*). We experienced 
strong growth in Continental Europe and the USA. However, the overall growth 
rate was impacted by a continuation of the more difficult market conditions 
in Banking and Finance, and Brexit uncertainty and Public Sector reforms 
within the UK. 
 
Contract continues to deliver a strong performance, with GP up 7%* YoY. A 
large proportion of this growth was driven by Continental Europe up 17%* YoY 
and the USA up 11%* YoY, which together represent 73% of Group Contract GP. 
 
Permanent GP was down 14%* YoY with UK&I down 37%* and Continental Europe 
down 11%* offset by a strong performance in the USA up 16%* YoY. The UK&I 
Permanent performance reflected a 27% reduction in average sales headcount 
YoY. Our performance in Continental Europe in part reflects very strong 
prior year comparatives, with GP in Q1 2016 up 25%* YoY. Permanent 
productivity per head improved by 6%* YoY with average heads down 18% YoY. 
 
Average Group sales headcount was down 8% YoY with Continental Europe up 5%, 
UK&I down 18% and USA down 21%. Contract headcount now represents 63% of 
Group sales headcount. 
 
The Group has a network of 38 offices in 15 countries, of which 30 are 
outside the UK. The Group generated 80% of Gross Profit for the period from 
markets outside the UK&I (2016: 72%). 
 
SThree remains in a strong financial position with net debt of circa GBP1m at 
period end (29 February 2016: GBP11m net debt). The Group has a GBP50m revolving 
credit facility ('RCF') with RBS and HSBC, which is committed to 2019. 
 
_* At constant currency_ 
 
SThree is hosting an analyst conference call today at 0830 GMT. The details 
are as follows: 
 
Telephone number: 0800 358 6377 or +44 (0)330 336 9105 
 
For access to the call please quote passcode SThree 
 
A replay facility will be available for seven days on 0808 101 1153 or +44 
(0) 20 7660 0134 Passcode: 6160488 
 
The Group will issue its trading update for the six months ended 30 May 2017 
on 16 June 2017. 
 
- Ends - 
 
+----------------------------------------------+---------------+ 
|*Enquiries:*                                  |               | 
+----------------------------------------------+---------------+ 
|*SThree plc*                                  |*020 7268 6000*| 
+----------------------------------------------+---------------+ 
|Gary Elden, Chief Executive Officer           |               | 
+----------------------------------------------+---------------+ 
|Alex Smith, Chief Financial Officer           |               | 
+----------------------------------------------+---------------+ 
|Sarah Anderson, Deputy Company Secretary/IR   |               | 
|Enquiries                                     |               | 
+----------------------------------------------+---------------+ 
|*Citigate Dewe Rogerson*                      |*020 7638 9571*| 
+----------------------------------------------+---------------+ 
|Kevin Smith/Jos Bieneman                      |               | 
+----------------------------------------------+---------------+ 
 
Notes to editors 
 
SThree is a leading international specialist staffing business, providing 
permanent and contract specialist staff to a diverse client base of over 
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 
Banking & Finance, Energy, Engineering and Life Sciences sectors. 
 
Since launching its original business, Computer Futures, in 1986, the Group 
has adopted a multi-brand strategy, establishing new operations to address 
growth opportunities. SThree brands include Computer Futures, Huxley 
Associates, Progressive and The Real Staffing Group. The Group has circa 
2,600 employees in eighteen countries. 
 
SThree plc is quoted on the Official List of the UK Listing Authority under 
the ticker symbol STHR and also has a US level one ADR facility, symbol 
SERTY. 
 
Important notice 
 
Certain statements in this announcement are forward looking statements. By 
their nature, forward looking statements involve a number of risks, 
uncertainties or assumptions that could cause actual results or events to 
differ materially from those expressed or implied by those statements. 
Forward looking statements regarding past trends or activities should not be 
taken as representation that such trends or activities will continue in the 
future. Certain data from the announcement is sourced from unaudited 
internal management information and is before any exceptional items. 
Accordingly, undue reliance should not be placed on forward looking 
statements. 
 
Language:      English 
ISIN:          GB00B0KM9T71 
Category Code: MSCU 
TIDM:          STHR 
LEI Code:      2138003NEBX5VRP3EX50 
Sequence No.:  3953 
 
End of Announcement EQS News Service 
 
554903 17-March-2017 
 
 

(END) Dow Jones Newswires

March 17, 2017 03:01 ET (07:01 GMT)

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