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SThree: Final Results

28/01/2019 7:03am

UK Regulatory (RNS & others)


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

 
 
 SThree (STHR) 
SThree: Final Results 
 
28-Jan-2019 / 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. 
 
SThree plc 
 
("SThree" or the "Group") 
 
Final results for the year ended 30 November 2018 
 
SThree, the international specialist staffing business, is today announcing its final results for the 
year ended 30 November 2018. 
 
FINANCIAL HIGHLIGHTS 
 
                 2018              2017          Variance (3) 
           Adjusted Reported Adjusted Reported  Actual  Constant 
                (1)               (2) 
 
                                               Movement Currency 
 
                                                        Movement 
                 GBPm       GBPm       GBPm       GBPm    %        % 
Revenue     1,258.2  1,258.2  1,114.5  1,114.5   +13%     +13% 
Contract      232.1    232.1    203.5    203.5   +14%     +14% 
gross 
profit 
Permanent      89.0     89.0     84.2     84.2   +6%      +6% 
gross 
profit 
Gross         321.1    321.1    287.7    287.7   +12%     +12% 
profit 
Operating      53.9     47.5     44.9     38.2   +20%     +20% 
profit 
Conversion    16.8%    14.8%    15.6%    13.3%  +1.2%    +1.2% 
ratio (%)                                        pts      pts 
Profit         53.4     47.0     44.5     37.7   +20%     +20% 
before 
taxation 
Basic         30.7p    26.6p    25.7p    21.5p   +19%     +20% 
earnings 
per share 
Proposed       9.8p     9.8p     9.3p     9.3p   +5%      +5% 
final 
dividend 
Total         14.5p    14.5p    14.0p    14.0p   +4%      +4% 
dividend 
(interim 
and final) 
per share 
Net           (4.1)    (4.1)      5.6      5.6    -        - 
(debt)/cas 
h 
 
(1) 2018 figures were adjusted for the impact of GBP6.4 million of net exceptional strategic 
restructuring costs. 
 
(2) 2017 figures were adjusted for the impact of GBP6.7 million of exceptional strategic restructuring 
costs. 
 
(3) All variances compare adjusted 2018 against adjusted 2017 to provide a like-for-like view. 
 
OPERATIONAL HIGHLIGHTS 
 
* Strong full year financial performance, ahead of expectations 
 
* Growth in gross profit ('GP') driven by Continental Europe (up 20%*), USA (up 8%*), and APAC & ME 
(up 11%*) 
 
* Restructured UK&I delivering in line with expectations, with GP down 5%* and productivity up 5%* 
 
* 83% of GP now generated outside UK&I (2017: 81%) 
 
* Contract GP up 14%* YoY, with growth across all sectors 
 
* Permanent GP up 6%* YoY, with Permanent productivity up 7% 
 
* Contract accounted for 72% of Group GP (2017: 71%) 
 
* Successful relocation of circa 240 roles from London to Centre of Excellence in Glasgow 
 
* Final dividend up 0.5p to 9.8p (2017: 9.3p), with cover now in target range of 2.0 to 2.5 times 
 
* Strong Q4 exit run rate underpins expectations heading into 2019 
 
* Variances in constant currency 
 
Gary Elden, CEO, commented: "The Group continued to make good progress throughout 2018. This resulted 
in a strong financial performance which, demonstrating our resilience, was delivered despite the 
ongoing macro-economic and political uncertainties. Alongside the financial metrics, we delivered 
further structural and operational progress which will enable us to attain our vision of being the 
number one Science, Technology, Engineering and Mathematics ('STEM') recruiter in the best STEM 
markets. We are on track with the delivery of the five-year plan as set out at the November 2017 
Capital Market Day." 
 
"Looking forward to the year ahead, our post-year end trading is in line with expectations and we 
remain well positioned to benefit from the growth opportunities in our chosen STEM markets." 
 
SThree will host a live presentation and conference call for analysts at 0930 GMT today. The 
conference call participant telephone details are as follows: 
 
      Dial in: 0800 358 9473 
 
Call passcode:     21768800# 
 
This event will also be simultaneously audio webcast, hosted on the SThree website at www.sthree.com 
[1]. Note that this is a listen only facility and an archive of the presentation will be available 
via the same link later. 
 
SThree will be announcing its Q1 Trading Update on Friday 15 March 2019. 
 
Enquiries: 
 
SThree plc                                   020 7268 6000 
Gary Elden, Chief Executive Officer 
Alex Smith, Chief Financial Officer 
Kirsty Mulholland, Company Secretariat 
 
Alma PR                                      020 3405 0205 
Rebecca Sanders-Hewett                 SThree@almapr.co.uk 
 
Josh Royston 
 
Susie Hudson 
 
Sam Modlin 
 
Notes to editors 
 
SThree is a leading international specialist recruitment business, providing Permanent and Contract 
specialist staff to a diverse client base of over 9,000 clients. From its well-established position 
as a major player in the Information & Communications Technology 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 
Progressive, Computer Futures, Huxley Associates and Real Staffing Group. The Group has circa 3,000 
employees in sixteen countries. 
 
SThree plc is quoted on the Official List of the UK Listing Authority under the ticker symbol STHR 
and also has a US level one ADR facility, symbol SERTY. 
 
Important notice 
 
Certain statements in this announcement are forward looking statements. By their nature, forward 
looking statements involve a number of risks, uncertainties or assumptions that could cause actual 
results or events to differ materially from those expressed or implied by those statements. Forward 
looking statements regarding past trends or activities should not be taken as representation that 
such trends or activities will continue in the future. Data from the announcement is sourced from 
unaudited internal management information. Accordingly, undue reliance should not be placed on 
forward looking statements. 
 
CHIEF EXECUTIVE OFFICER'S REVIEW 
 
Overview[1] 
 
The Group continued to make good progress throughout 2018. This resulted in a strong financial 
performance which, demonstrating our resilience, was delivered despite the ongoing macro-economic and 
political uncertainties. Alongside the financial metrics, we delivered further structural and 
operational progress which will enable us to attain our vision of being the number one Science, 
Technology, Engineering and Mathematics ('STEM') recruiter in the best STEM markets. We are on track 
with the delivery of the five-year plan as set out at the November 2017 Capital Market Day. 
 
At the start of 2018, I stated that after two years of political, market and economic pressure, we 
entered the year in good shape. That turbulence and pressure increased throughout the year and yet we 
delivered a creditable performance. As we enter 2019, I believe that we are in even better shape. 
 
The STEM markets in which we operate continue to be affected by the ongoing global shortage of 
skilled workers and the resulting supply and demand imbalances which underpin the need for our 
services. 
 
Group gross profit ('GP') was up 12%* in the year. The growth was largely delivered, as expected, 
through our key territories of Continental Europe and the USA; the former was driven by our 
market-leading businesses in Germany and the Netherlands which together saw growth of 20%*, whilst 
the latter was up 8%*. We also made improvements in our other target markets, including a stand-out 
performance from our growing team in Japan, up 85%*. From a sector point of view, we saw robust 
growth across the Group, with Information and Communication Technology ('ICT') up 12%*, Life Sciences 
up 8%*, Engineering up 16%* and Global Energy up 30%*. 
 
Our specialist focus on STEM and being in the right STEM markets is helping us to build a growing 
reputation, using a multi-brand approach where each brand is well regarded within its own specialist 
field. This is a key differentiator for SThree. In technology, for example, where other companies 
position themselves as IT specialists, we are recognised as experts in specific fields such as JAVA, 
Salesforce or .Net. This approach is the same across all our markets, so clients know that we can 
access the very best people for highly skilled positions. 
 
The Group is globally diversified, but at the same time specialises at a local level. We can source 
the right people for clients in multiple territories whilst also understanding the nuances and 
dynamics of each individual market. These include legislative requirements where our local knowledge 
can help us to advise clients on choosing the right contracts and also help successful candidates 
navigate the necessary requirements. 
 
The Group's central purpose is 'Bringing skilled people together to build the future', and we have 
six core principles that will enable us to achieve this purpose and generate returns for all of our 
stakeholders. These are: grow and extend regions, sectors and services; develop and sustain great 
customer relationships; focus on Contract, drive Permanent profitability; generate incremental 
revenues through innovation and M&A; build infrastructure for leveraged growth; and find, retain and 
develop great people. We have made considerable progress against the majority of our strategic 
priorities. I will touch on two of them in more detail below with our Chief Sales Officer and Chief 
Operational Officer providing further detail on the other four aspects. 
 
Find, retain and develop great people 
 
One of the most pleasing aspects of the year was the ongoing development of the Group's culture. 
Having collectively agreed on what kind of organisation we want to be and the principles to which we 
would hold ourselves, it has been particularly rewarding to see adoption across the Group and the 
benefits are already being seen. We have a vision that is shared across all of our operations and the 
mindset has noticeably changed from thinking as individuals to considering wider Group opportunities, 
shifting from a 'me' to a 'we' culture. 
 
We have started to see the benefits of changes that we made about a year ago, including the 
appointments of Dave Rees as Chief Sales Officer and Justin Hughes as Chief Operating Officer. As 
anticipated, this has helped us to align our sales and operational strategies and ensure we have the 
right services, infrastructure and people to execute our global growth strategy and provide our 
customers with the best possible experience. 
 
Pleasingly, the year's results were achieved despite the inevitable disruption caused by relocating 
our London-based support services to Glasgow where we have created a Centre of Excellence. All roles 
were fulfilled through our own recruitment teams and the project has delivered ahead of our 
expectations. Any disruption caused was addressed promptly and professionally and our customers 
experienced a smooth transition. We are delighted with the progress being made by the Glasgow team 
which will give us greater conversion margin and competitive advantage. 
 
Cultural changes do not happen overnight and there is still plenty for us to do. Our Female 
Leadership Development Programme, IdentiFy, has been running throughout the year. It was introduced 
to help us identify and nurture top female staff and give them the tools and support that they need 
to thrive, as in the past we have seen female staff as a proportion of the total drop away when they 
reach management levels. It has already given us greater insight, with initial feedback suggesting 
that female candidates will put themselves forward for a role only where they feel comfortable in 
executing 80% of the tasks involved in that role, whereas the corresponding figure for male 
applicants is 20%. Through this level of understanding we can take initiatives to redress that 
balance and encourage females to stay with us longer and progress further. This mirrors many of the 
initiatives that we are conducting externally on behalf of our clients to ensure that female talent 
is able to thrive in all of the STEM industries. During the year we have seen 14 female promotions to 
management positions across the Group (out of 27 participants) with one to Director level. 
 
We have made a great start in bringing our people together and encouraging them to behave in a way 
that is representative of our five Leadership Principles, Know Me, Focus Me, Develop Me, Care For Me 
and Include Me, providing the necessary coaching and training to help them succeed. As a result, I 
believe that we are becoming increasingly meritocratic and expect that trend to continue. 
 
Generate incremental revenues through innovation and M&A 
 
Ours remains a people business and one which thrives on the strength of its relationships. Our 
clients are looking for highly skilled workers and they choose us to source them because of our 
specialist sector focus and expertise in all aspects of our chosen markets. As such we believe that 
we are resilient to pure play technology competition that naturally suits more commoditised 
offerings. 
 
At the same time, our extensive industry expertise means that we are able to develop tools that can 
help deliver different products for different markets, diversifying our business and opening up new 
revenue streams where clients and candidates are less focused on the service elements that are so 
important in our chosen STEM markets. During 2018, we made significant progress with both our 
HireFirst and Showcaser initiatives. 
 
HireFirst is an easy to use platform that uses Artificial Intelligence ('AI') to offer candidates 
live matches to a diverse spectrum of roles and companies, whilst allowing companies the opportunity 
to market their employer brand and attract the best people. It was officially launched in beta 
testing in October in both Paris and London and I am pleased to say that the early results are 
encouraging. 
 
Showcaser is a video platform which gives candidates the ability to highlight certain aspects of 
their CV, career to date or other areas that they may choose to differentiate themselves. Showcaser 
was exhibited at UNLEASH Amsterdam in November and, again, the feedback has been encouraging. 
 
We would not anticipate material revenue from HireFirst or Showcaser in 2019 but do believe they have 
the ability to generate strong returns on investment over the medium term. 
 
Management succession 
 
Having been with the Company for nearly 30 years and as CEO for the last six, I shall be stepping 
down before the Annual General Meeting of Shareholders being held on 24 April 2019. The process for 
finding my successor is well underway. I am very proud of everything that we have achieved as a 
business in that time and, as these results demonstrate, I will be handing over the reins of a 
business that is in very good shape. I will be fully committed to the role until that time and will 
work with the Board and the leadership team to ensure a smooth handover to my successor. 
 
Outlook 
 
At the start of 2018, I stated that after two years of turbulent political markets and economic 
pressure we entered the year in good shape. Despite that turbulence and pressure increasing 
throughout the year, we delivered a strong set of results. Looking forward to the year ahead, our 
post-year end trading is in line with expectations and we remain well positioned to benefit from the 
growth opportunities in our chosen STEM markets. 
 
CHIEF SALES OFFICER'S OPERATING REVIEW 
 
Group[2] 
 
Gross Profit  2018    2017   YoY Variance* 
 
Contract     GBP232.1m  GBP203.5m      +14% 
Permanent    GBP89.0m   GBP84.2m        +6% 
Group        GBP321.1m  GBP287.7m      +12% 
 
2018 was a year of strong growth across the Group, with both Contract and Permanent showing an 
increase in gross profit ('GP'). Permanent was up 6%*, with productivity in the division increasing 
by 7%. Reflecting the industry megatrends driving our markets, and the Group's focus, the Contract 
division grew more strongly, up 14%*. In line with our strategy, the mix of Contract GP increased 
slightly to represent 72% of total Group GP, up from 71% in 2017. 
 
Regionally we saw stand out performances across the key regions of Germany, the Netherlands, and 
Japan. We also saw continued growth in the USA. These strong performances were driven by a mixture of 
structural growth in our markets, strong management execution and the benefits of our strategic 
business decisions becoming realised. We also saw growth in all but one of our sectors within STEM, 
with Information and Communication Technology ('ICT') up 12%*, Life Sciences up 8%*, Energy up 30%* 
and Engineering up 16%*. Banking & Finance was broadly level year on year. 
 
Breakdown of GP            2018 2017 
 
Contract/Permanent Split 
Contract                    72%  71% 
Permanent                   28%  29% 
                           100% 100% 
Geographical Split 
Continental Europe          57%  52% 
USA                         21%  22% 
UK&I                        17%  19% 
Asia Pacific & Middle East   5%   7% 
                           100% 100% 
Sector Split 
ICT                         44%  43% 
Life Sciences               21%  22% 
Banking & Finance           13%  15% 
Energy                      10%   9% 
Engineering                 10%   9% 
Other                        2%   2% 
                           100% 100% 
 
Regions 
 
Gross Profit                2018    2017   YoY Variance* 
Continental Europe         GBP183.3m  GBP150.6m       +20% 
USA                        GBP66.7m   GBP64.4m        +8% 
UK&I                       GBP53.1m   GBP55.7m        -5% 
Asia Pacific & Middle East GBP18.0m   GBP17.0m        +11% 
Group                      GBP321.1m  GBP287.7m       +12% 
 
SThree is a well-diversified business by geography, with non-UK GP now representing 83% of the 
Group's total GP. SThree is strategically located in regions where there are clear growth 
opportunities within STEM industries, and we are pleased that this resulted in growth across the vast 
majority of our businesses in the year. 
 
SThree built upon its strong position in Continental Europe, with GP up 20%*, driven by strong growth 
in both DACH (up 21%*) and Benelux, France & Spain (together up 18%*). Our key aims in this region 
are to dominate the STEM space in both Germany and the Netherlands. We delivered a particularly 
strong performance in the Netherlands, which is a key business hub for many multi-national companies, 
with GP up 25%*. During the year, we opened a new location in Eindhoven, improving client proximity 
and reaffirming our position as the market leader in STEM professional recruitment. In our largest 
country of operation, Germany, the team delivered another year of strong growth, with GP up 18%* year 
on year. Germany benefited from the expansion of its Contract service to include ECM, which we 
launched in 2017.[3] 
 
The USA saw robust GP growth of 8%* year on year, as we expanded our office footprint with a new 
office in Washington DC, having previously serviced this market remotely from New York. This growth 
was pleasing given the organisational changes implemented in the region in Q1 2018, which included 
the move from a regional to brand management structure. 
 
The increased economic uncertainty seen in the UK and Ireland continued to impact the region, causing 
overall GP to decline by 5%*. The UK is a mature recruitment market and is seeing slower industry 
growth than other geographies, although it remains a strategic priority for the Group. In the first 
half of 2018, we restructured parts of our Permanent business, consolidating into key hubs and 
implemented a change of management. These actions showed clear signs of delivery with Permanent 
productivity in the region up by 7%* on the prior year. As expected, the Contract business 
demonstrated its resilience, remaining broadly stable. 
 
Our Asia Pacific & Middle East ('APAC & ME') businesses delivered growth of 11%*. This was driven 
largely by an excellent performance from the team in Japan, delivering GP up 85%* year on year. Japan 
is an important technical market, with an immature recruitment industry, and the Group has 
capitalised well on these opportunities. Japan now represents 29% of the APAC & ME GP, up from 17% in 
2017. The Middle Eastern team also capitalised on its specialist knowledge, driving growth from 
Contract placements across the Energy and Banking & Finance sectors. 
 
Sectors 
 
Gross Profit       2018    2017   YoY Variance* 
ICT               GBP142.0m  GBP124.7m      +12% 
Life Sciences     GBP66.3m   GBP62.4m        +8% 
Banking & Finance GBP42.4m   GBP43.5m        -1% 
Energy            GBP33.4m   GBP26.5m       +30% 
Engineering       GBP30.6m   GBP25.9m       +16% 
Other             GBP6.4m   GBP4.7m       +28% 
Group             GBP321.1m  GBP287.7m      +12% 
 
Our largest sector continues to be ICT and our strong technology capability across all verticals is 
becoming increasingly recognised across our key regions. ICT represented 44% of Group GP, driven by 
an increase in GP across Continental Europe of 22%*. In total, ICT GP increased by 12%*, with the 
year-end headcount up 7%. 
 
Our Life Sciences sector is already a market leader across several of our regions, and we saw another 
robust performance delivered across the Group, with GP up 8%* year on year. This was driven by strong 
performances in both APAC up 29%* and Benelux, France & Spain up 15%*. Additionally, DACH and the USA 
delivered solid growth of 8% and 6% respectively. 
 
Banking & Finance was down 1%* year on year, with Contract GP up 4%*, driven by a robust performance 
in Continental Europe, where average headcount was up 5% on the prior year. The decline in Permanent 
GP seen in the UK and the USA was partially offset by growth in APAC and ME, leaving Banking & 
Finance at 13% of the Group GP. 
 
We saw strong growth across both our Engineering and Energy sectors in 2018, up 16%* and 30%* 
respectively, year on year. Within Engineering we pleasingly saw growth across all major regions with 
the UK up 7%*, DACH up 21%*, Benelux, France & Spain up 19%* and the USA up 29%*. 
 
Within Energy, where 94% of GP is derived from Contract, we had very strong performances in both 
Continental Europe, up 25%*, and in the USA where our position in renewable energy helped deliver 
40%* growth in GP. At the year end, global headcount was up 20% on the prior year, with Continental 
Europe up 28% and the USA up 27%. 
 
Focus on Contract, drive Permanent profitability 
 
In 2018 we delivered on our stated strategy by further investing in Contract growth, and improving 
Permanent productivity. 
 
At the year end, Contract headcount was up 8% year on year, and all regions excluding UK&I reported 
increased headcount and GP growth in Contract. Since 2012 we have doubled our runners, ending on 
11,203 and for the sixth consecutive year are able to report an all-time high number of runners at 
our financial year end. Our increased weighting towards Contract is creating a business that is more 
resilient in times of uncertainty, as well as providing stronger and more sustainable profits. The 
introduction of a Contract-specific management team has worked to increase accountability and focus. 
Our freelancer model is continuing to perform well, and the focus on growing the Employed Contractor 
Model ('ECM') is also paying dividends, as this model continues to grow in popularity across our key 
territories. This was a key focus in 2018 and now accounts for 21% of our Contract runners, up from 
19% in 2017. [4] 
 
Permanent productivity per head was up 7%, achieved through our focus on the best Permanent markets, 
with average salaries up 1% and average fees up 4%. Over the year we focused on reallocating our 
headcount into our key growth markets, rather than focussing on net growth in our Permanent 
headcount. We know that Permanent recruitment is more sensitive to overall market sentiment and 
therefore we have a clear strategy to actively invest in Permanent headcount in our key markets of 
Japan, the Netherlands, Germany and the USA, so that we are best-positioned for the future. 
Maintaining a strong base of Permanent business in markets where there is space to grow continues to 
be important to the business. From a strategic viewpoint, Permanent is key in building client 
relationships, provides a Contractor development pipeline, and has strong cash generation 
characteristics. 
 
                       GP*                Average Headcount 
    GP      Contract Permanent Total  Contract Permanent  Total 
USA           +14%      -5%     +8%     +15%      +2%     +11% 
APAC & ME     -2%      +24%     +11%    +13%      -3%      +3% 
Continental   +22%     +15%     +20%    +19%      +8%     +15% 
Europe 
UK&I           0%      -20%     -5%     -1%      -25%      -9% 
Total         +14%      +6%     +12%    +13%      -1%      +8% 
 
Develop and sustain great customer relationships 
 
Throughout 2018 we evolved our client segmentation strategy, allowing us to more effectively 
categorise our client types to ensure we develop our relationships with them in a more tailored 
manner. We developed our first onshore delivery centre based in Glasgow, which allows for larger and 
more nimble and scalable delivery mechanisms for project recruitment. 
 
We have fully integrated the Net Promoter Score ('NPS') metric into the organisation and it now feeds 
into the rewards process across the business. 
 
NPS scores were broadly flat in 2018, reflecting the move of our London support services to Glasgow. 
Looking ahead, we are confident that we are well positioned to improve in 2019. 
 
REGIONAL OVERVIEW 
 
Continental Europe (57% of Group GP) 
 
               GP                             Average Sales 
                                                Headcount 
           Growth* YoY       FY 2018 Mix       Growth YoY 
       Cont   Perm   Total   Cont   Perm   Cont    Perm   Total 
 
 2018   +22%   +15%    +20% 72%    28%       +19%     +8%  +15% 
 
Performance in 2018 
 
DACH 
 
Germany, Austria and Switzerland ('DACH'), representing 31% of Group GP, had a strong year in 2018, 
building on our market-leading position in this region. Changes made to the management set-up 
delivered productivity gains as expected, and during the year, we rolled out a new employer 
proposition, which helps us to attract and retain talent. It also allowed us to deepen our customer 
relationships, and offer tailored solutions to major clients with complex needs. This is a barrier to 
entry to our competitors. 
 
This translated into tangible benefits; in Germany our Permanent GP grew 16%* with just 4% additional 
headcount. ICT remains our largest sector. 
 
Our Contract business grew by 22%*, with a 16% investment in headcount, and the dilutive effect on 
average tenure of our expansion was fully compensated by a more focused customer strategy. 
 
The Employed Contractor Model ('ECM') has been steadily gaining ground and has been regionalised 
further across our existing office infrastructure. 
 
We successfully completed an office launch in Austria, which has more than doubled its freelance 
business year on year, whilst its Permanent business has increased its headcount by 50% year on year. 
 
Benelux, France & Spain[5] 
 
Benelux, France & Spain is the second largest region after DACH, representing 26% of the Group GP. 
Benelux, France & Spain GP was up 18%* year on year. 
 
Overall, we delivered strong growth in the region, supported by strong economic growth, tight labour 
markets and high quality execution from our team there. 
 
The Netherlands was the stand-out performer with GP up 25%* year on year, which was an improvement on 
the 20% delivered in the prior year. Belgium grew GP by 16%* year on year, while France and 
Luxembourg showed more modest growth. 
 
Strong growth was achieved in Contract across the region with GP up 21%* year on year. The 
Netherlands Contract business grew 27%* and Belgium Contract up 17%* year on year. We enter 2019 with 
a strong Contract runner book up 14% on prior year. 
 
Permanent also showed GP growth of 5%* year on year, with average sales headcount up 5%. 
 
ICT, our largest sector, grew 20%* and continues to be the strongest growth market in the region, 
with ICT Contract up 23%* and Permanent up 6% year on year*. 
 
Our relatively new offices in Barcelona, Eindhoven, Lille, Lyon and Toulouse, all of which have 
strong STEM opportunities, will enable us to more closely support our clients in these locations. 
 
Expectations for 2019 
 
DACH 
 
We exit the year with a strong Contract runner book, which combined across the DACH region is 25% 
bigger than in the prior year, a strong starter pipeline, and our largest ECM order book to date. 
 
In line with our Group strategy, we will continue to invest in all divisions with particular focus on 
further strengthening our ECM throughout 2019. 
 
Benelux, France & Spain 
 
We exit the year with a strong Contract pipeline, Permanent starter pipeline and a highly focused 
management team with a clear strategy. 
 
In line with our Group strategy, we will continue to invest in Contract throughout 2019, where we see 
market opportunity. We will focus on improving Permanent productivity, with selective headcount 
investments. 
 
Our investment in the ECM in 2018 helped the region increase the number of Contractors. We expect to 
leverage this further in 2019 across the region. 
 
We exit 2018 in good shape across our European business. Regional management objectives are fully 
aligned with our corporate vision and we start 2019 with strong pipelines in both Contract and 
Permanent, and our largest ECM order book to date. Despite ongoing macro-economic challenges, we 
remain optimistic in our growth potential for the year ahead. 
 
USA (21% of Group GP) 
 
               GP                             Average Sales 
                                                Headcount 
           Growth* YoY       FY 2018 Mix       Growth YoY 
       Cont   Perm   Total   Cont   Perm   Cont    Perm   Total 
 
 2018   +14%    -5%     +8% 73%    27%       +15%     +2%  +11% 
 
Performance in 2018 
 
The USA is our second largest region and represents 21% of Group GP.[6] 
 
Contract continued to deliver a strong performance in 2018 with GP up 14%*, balanced by the decline 
of 5%* seen in Permanent, leaving the region having delivered overall GP growth of 8%*. 
 
Growth in the region was across Energy, Life Sciences, ICT, and creative markets. Energy GP was up 
40%* as we continued to build our customer portfolio, build on our strong position in renewable 
energy, and broaden our service offering. Life Sciences, our largest sector in the region grew by 
6%*. ICT grew by 8%. We continue to see further opportunities for growth in all our markets. 
 
We continued to prioritise growth in Contract sales headcount, with an average increase of 15%* year 
on year. 
 
Overall, average headcount across the region was up 11%* in 2018, period end sales headcount was up 
5%. 
 
In our Permanent division, we made critical leadership and strategic changes to create a platform for 
more consistent and balanced growth. The effect of these structural changes impacted performance in 
the year, as we expected. We are fully confident we have made the right strategic decisions and we 
expect the positive impact of these changes to be seen in performance during 2019 and beyond. 
 
Expectations for 2019 
 
With a stable exit rate in Contract runners, especially in Energy and ICT, we expect to continue our 
strong growth into 2019. We expect Permanent to return to growth in 2019. 
 
We are confident that we have the right team and structure to deliver a high quality service to our 
clients and continue to penetrate the largest recruitment market in the world. We remain agile to 
cater for any risks or opportunities that are posed by the market. 
 
UK&I (17% of Group GP) 
 
               GP                             Average Sales 
                                                Headcount 
           Growth* YoY       FY 2018 Mix       Growth YoY 
       Cont   Perm   Total   Cont   Perm   Cont    Perm   Total 
 
 2018     0%   -20%     -5% 82%    18%        -1%    -25%   -9% 
 
Performance in 2018 
 
Despite the continued uncertainty around Brexit, we have made very good progress in laying the 
foundations to maximise our performance in the UK in 2019 through focusing on key strategic targets. 
We significantly reduced our headcount in our Permanent division during the year and moved to a 
specialist hub and onshore delivery model. This resulted in a strong productivity gain of 7%*. 
Permanent GP declined 20%* against a 25% reduction in headcount. Our increased productivity also 
resulted in a strong performance on profitability. Contract GP (flat* year on year) was largely due 
to a more cautious approach to headcount build in H1 which we ramped up in H2. Contract productivity 
was up 1%. The UK remains regionally well diversified with strong GP growth in Glasgow (up 12%*), 
Bristol (up 13%*), and Leeds (up 9%*). We also restructured a management team in Dublin (up 9%*) to 
better maximise the market opportunity. 
 
SThree has a diversified sector offering in UK&I, with strong GP performances within Life Sciences 
(up 7%*), Engineering (up 7%*) and Energy (up 28%*). We have conversely seen greater challenges in 
some of the more competitive spaces such as ICT (down 10%*) and Banking & Finance (down 7%*). 
However, we believe that we are focussing on the right markets and customer segments to see this 
improve in 2019. 
 
Expectations for 2019 
 
We are well diversified both regionally and from a sector perspective within UK&I. We will continue 
to invest in headcount based on customer and sector needs, mindful of the broader economic and 
political backdrop. We have an agile model that allows us to meet a broad spectrum of our clients' 
demands.[7] 
 
APAC & ME (5% of Group GP) 
 
               GP                             Average Sales 
                                                Headcount 
           Growth* YoY       FY 2018 Mix       Growth YoY 
       Cont   Perm   Total   Cont   Perm   Cont    Perm   Total 
 
 2018    -2%   +24%    +11% 45%    55%       +13%     -3%   +3% 
 
Performance in 2018 
 
APAC & ME represented 5% of Group GP, a reduction from the 7% contribution in 2017. Whilst the aim of 
the region is to outperform the Group average, 2018 was a return to growth for APAC & ME after a 
period of recovery in Energy and a realignment of market focus in other sectors. The region includes 
Australia, Singapore, Japan, Malaysia, Hong Kong and Dubai. 
 
Our market exposure is broad with a balanced approach to all STEM markets and alignment to our Group 
strategic priorities. Our exposure to Energy and Banking & Finance was lower than in previous years. 
The bulk of our headcount investment was within ICT, Life Sciences and Engineering. 
 
Our Japanese business delivered a stand-out performance this year, with Japan growing its GP by 85%*. 
We also saw a strong performance in ME Contract where GP grew by 48%*, driven by both the ICT and 
Energy sectors. We are confident in both businesses continuing that performance in 2019 and are 
investing in headcount and the correct infrastructure to provide a platform for further growth. 
 
Expectations for 2019 
 
We expect to maintain good growth in 2019. We will continue to invest in our Japanese Permanent 
business where we expect to continue seeing strong future growth. We will also continue to invest in 
ME Contract across both Energy and ICT. 
 
CHIEF FINANCIAL OFFICER'S REVIEW 
 
In 2018, our improved operational performance delivered strong growth in gross profit and profit 
before tax, ahead of market expectations. 
 
Income statement 
 
 Revenue for the year was up 13% on constant currency and reported bases to GBP1,258.2 million (2017: 
 GBP1,114.5 million). On constant currency and reported bases, gross profit ('GP') increased by 12% to 
  GBP321.1 million (2017: GBP287.7 million). Growth in revenue exceeded the growth in GP as the business 
continued to remix towards Contract. Contract represented 72% of Group GP in the year (2017: 71%). 
This change in mix resulted in a slight decrease in the overall GP margin to 25.5% (2017: 25.8%) as 
Permanent revenue has no cost of sale, whereas the cost of paying the contractor is deducted to 
derive Contract GP. The Contract margin increased slightly to 19.9% (2017: 19.8%). 
 
 Reported profit before tax was up 25% at GBP47.0 million. The adjusted profit before tax ('PBT') was 
   GBP53.4 million up 20% year on year (2017: adjusted GBP44.5 million and reported GBP37.7 million). The 
 adjusted PBT excludes restructuring costs of GBP6.4 million that were incurred during the year in 
 respect of the relocation of our support function to Glasgow (2017: GBP6.7 million). In 2018, this 
exceptional restructuring delivered savings which drove an increase in our operating profit 
conversion ratio of 1.2 percentage points to 16.8% on an adjusted basis and 1.5 percentage points to 
14.8% on a reported basis (2017: adjusted 15.6% and reported 13.3%). 
 
Restructuring costs ('adjusting items') 
 
A strategic relocation of the majority of our central support functions away from our London 
headquarters to a new facility located within Glasgow was announced on 1 November 2017. The 
transition to the Glasgow Centre of Excellence is now substantially complete and we anticipate this 
 restructuring will realise cost savings ahead of expectations, in excess of GBP5 million per annum. In 
line with the project implementation timescale, benefits started to be realised in the second half of 
 the financial year and have led to the recognition of GBP2.6 million in savings in the year. The 
 trajectory of the realised savings is expected to result in additional support costs savings of GBP2.9 
million in 2019. 
 
 We continue to anticipate that one-off restructuring costs will be in the region of GBP14.0 million, 
 with circa GBP12.9 million of operating expenses, including personnel costs and professional advisor 
 fees, and circa GBP1.1 million of property related costs. The project is being partially funded by a 
 grant receivable from Scottish Enterprise of circa GBP2.1 million which is receivable and recognisable 
over several years, subject to the terms of the grant being met within a fixed timeframe. 
 
 Net exceptional costs of GBP6.4 million have been charged to the Consolidated Income Statement during 
the year, bringing the total costs recognised to date to GBP13.1 million. The exceptional charge in the 
year included personnel costs of GBP4.1 million and other costs of GBP2.7 million (primarily professional 
and property costs). During the year, the grant income of GBP0.4 million was recognised as an offset to 
the exceptional costs. 
 
The strategic nature and material cost of the restructuring of support functions announced in 2017 
continues to be of sufficient magnitude to warrant separate disclosure as an exceptional item on the 
face of the Consolidated Income Statement, in line with our accounting policies. The separate 
disclosure of the exceptional items helps readers understand the Group's underlying results for the 
year ('Adjusted'). The Group adjusted profit KPIs for the year are presented in various sections of 
this Annual Report. 
 
A reconciliation of 'Adjusting items' is provided below: 
 
GBP'million                                              2018 2017 
Reported profit before tax after exceptional items     47.0 37.7 
Exceptional strategic restructuring costs (net of       6.4  6.7 
government grant) 
Reported profit before tax and exceptional items       53.4 44.5 
('Adjusted') 
 
Operating costs 
 
  Adjusted operating costs, excluding one-off net restructuring costs of GBP6.4 million (2017: GBP6.7 
  million), increased by 10% to GBP267.2 million (2017: GBP242.8 million). The increase was mainly driven 
by additional investment in headcount (8% increase year on year), 10% increase in personnel costs 
 (GBP11.0 million* increase in salaries; GBP3.5 million* increase in commissions and bonuses in line with 
 the improved GP), and GBP0.9 million increase in property costs reflecting demand for new and 
modernised office space.[8] 
 
Payroll costs represented 79% of our cost base. Average total headcount was up by 10% at 2,926 (2017: 
2,668), with average sales headcount up 8%. The increase in average sales headcount was in response 
to supportive market conditions across the majority of our geographies as well as improvements in 
consultant productivity, attributable primarily to Continental Europe (Benelux & France and DACH 
regions) and the USA, (headcount up 15% and 11% respectively). 2% of the average total headcount was 
attributable to the relocation of the support function to Glasgow. The year-end total headcount was 
up 4% at 2,979. 
 
The year-end sales headcount represented 78% of the total Group headcount. 
 
The full benefits of the restructure of our UK support function on personnel and property costs are 
expected to be realised from the financial year 2019 onwards. 
 
Investments 
 
During the year, we continued to invest in in-house innovation initiatives, expensing a total of GBP2.4 
 million (2017: GBP2.0 million) across the year. Our intent is to build a more diverse portfolio of 
products and services so that we capture a greater share of total customer spend on employment 
matters and to ensure we are well positioned to benefit from potential disruption. The bulk of the 
investment was made in our HireFirst and Showcaser initiatives. HireFirst launched in October 2018 is 
at the beta testing stage, and no profits were generated during the year. Showcaser is progressing 
well and it has received encouraging feedback from the prospective clients. We do not anticipate 
material revenue from HireFirst or Showcaser in 2019. 
 
We continued to hold non-controlling shareholdings in three innovation start-ups. (i) Ryalto Limited 
which is designing and developing a mobile application for healthcare professionals. (ii) 
RoboRecruiter Inc. which is building automated multichannel platforms connecting candidates with 
recruiters and employers in real time; and (iii) The Sandpit Limited, a privately owned group that 
specialises in developing early stage start-up companies within defined markets. 
 
Taxation 
 
 The tax charge on pre-exceptional statutory profit before tax for the year was GBP13.9 million (2017: 
 GBP11.4 million), representing an effective tax rate ('ETR') of 25.9% (2017: 25.6%). The ETR on 
post-exceptional statutory profit before tax was 27.1% (2017: 26.7%). 
 
The ETR primarily reflects our geographical mix of profits and a cautious approach to recognising 
deferred tax assets on tax losses. USA Tax Reform legislation passed in December 2017 saw a reduction 
in the federal corporate tax rate from 35% to 21%. As previously indicated, this had a minimal impact 
on the ETR because the tax credit associated with the current year profits was largely offset by the 
reduction in the deferred tax asset. Whilst the Group benefited from a reduction in the USA cash tax 
payable in 2018, the accounting ETR benefit of this change will occur in 2019 and beyond. 
 
Other regulatory changes which may impact the Group in future years include: 
 
(i) If the UK leaves the European Union, the Group will no longer be able to benefit from provisions 
applying in certain tax treaties and in the EU Parent Subsidiary Directive. The Group is currently 
planning mitigating actions against this and hence we do not expect any material costs to arise. 
 
(ii) In October 2017, the European Commission opened a state aid investigation into the Group 
Financing Exemption in controlled foreign company rules, introduced by the UK Government in 2013. The 
Group has historically relied on this exemption in certain jurisdictions and we are therefore 
monitoring the investigation. If the preliminary findings of the European Commission are upheld, we 
 calculate our maximum potential liability to be GBP3.2 million. Our current assessment is that no 
provision is required in respect of this issue. 
 
(iii) Increased transparency arising from the implementation of Country-By-Country reporting 
provisions in various OECD member states may result in more frequent tax audits, particularly in the 
area of transfer pricing. The Group is comfortable that its policies in this area are robust. 
 
We will continue to monitor and assess the impact of any changes as they are implemented. 
 
Earnings per share ('EPS') 
 
On an adjusted basis, basic EPS was up by 5 pence, or 19%, at 30.7 pence (2017: adjusted 25.7 pence), 
due to an increase in the adjusted profit before tax, partially offset by a marginal increase in 
weighted average number of shares. On a reported basis, EPS increased to 26.6 pence, up 5.1 pence on 
the prior year (2017: 21.5 pence). The weighted average number of shares used for basic EPS remained 
stable at 128.7 million (2017: 128.6 million). Reported diluted EPS was 25.7 pence (2017: 20.8 
pence), up 4.9 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, the volume of 
new tracker arrangements created and the settlement of vested arrangements. 
 
Dividends 
 
The Board monitors the appropriate level of the dividend, taking into account, inter alia, achieved 
and expected trading of the Group, together with its balance sheet position. In line with the Board's 
strategy of targeting a dividend cover of between 2.0x and 2.5x, based on underlying EPS, over the 
short to medium term, the Board has proposed an increased final dividend of 9.8 pence per share 
(2017: 9.3 pence). Taken together with the interim dividend of 4.7 pence per share (2017: 4.7 pence), 
this brings the total dividend for the year to 14.5 pence per share (2017: 14.0 pence). This 
represents a 4% increase in dividend per share versus the prior year. This dividend increase reflects 
the Board's confidence in SThree's long-term strategy, with cover now in the target range of 2.0 to 
 2.5 times. The final dividend, which amounts to approximately GBP12.8 million, will be subject to 
shareholder approval at the 2019 Annual General Meeting. It will be paid on 7 June 2019 to 
shareholders on the register on 26 April 2019. 
 
Share options and tracker share arrangements 
 
  We recognised a share-based payment charge of GBP4.7 million during the year (2017: GBP3.3 million) for 
the Group's various share-based incentive schemes. The greater charge in 2018 is primarily due to 
improved non-market vesting conditions, such as the adjusted earnings per share driven by increased 
profit before tax. A portion of the annual charge also reflects the accelerated cost for all 'good 
leavers' who left the Group as a result of restructuring and relocation of support functions away 
from London. 
 
We also operate a tracker share model to help retain and motivate our entrepreneurial management 
within the business. The programme gives our most senior sales colleagues a chance to invest in a 
business they manage with the support and economies of scale that the Group can offer them. In 2018, 
 68 employees invested an equivalent of GBP0.6 million in 25 Group businesses. 
 
 We settled certain tracker shares during the year for a total consideration of GBP3.7 million (2017: 
 GBP3.2 million) which was determined using a formula in the Articles of Association underpinning the 
tracker share businesses. We settled the consideration in SThree plc shares either by issuing new 
shares (398,298 new shares were issued on settlement of vested tracker shares in 2018) or treasury 
shares (in total 700,200 were used in settlement of vested tracker shares in 2018). Consequently, the 
arrangement is deemed to be an equity-settled share-based payment arrangement under IFRS 2 
'Share-based payments'. There is no charge to the income statement as initially the tracker 
shareholders subscribed to the tracker shares at their fair value. We expect future tracker share 
  settlements to be between GBP5 million to GBP15 million per annum. These settlements may either dilute 
the earnings of SThree plc's existing ordinary shareholders if funded by new issue of shares or will 
result in a cash outflow if funded via treasury shares. This year we purchased 411,354 of SThree 
plc's ordinary shares for immediate cancellation to offset a negative impact on share dilution as a 
result of tracker arrangements being funded via a new issue of shares. 
 
Note 1 to the financial statements provides further details about all Group-wide discretionary share 
plans, including the tracker share arrangements. 
 
Balance sheet 
 
At 30 November 2018, the Group's net assets increased to GBP101.7 million (2017: GBP80.7 million), mainly 
due to the excess of net profit over the dividend payments supported by a strengthening of the Euro 
vs Sterling, offset by share buy backs and share cancellations during the year. 
 
The most significant item in our statement of financial position is trade receivables (including 
  accrued income) which increased to GBP274.6 million (2017: GBP217.7 million). The main drivers of this 
increase were an almost four day growth in Days Sales Outstanding ('DSOs') to 44.7 days (2017: 40.6 
days), reflecting a short-term impact from the move of support functions to Glasgow, a 12% increase 
 in Contract GP in Q4 year on year, and a GBP4.3 million increase due to movements in foreign exchange 
rates. We expect DSOs to improve during the course of 2019. Trade and other payables increased from 
  GBP159.6 million to GBP191.7 million, with GBP2.5 million due to movements in foreign exchange rates, and 
the remainder primarily due to an increase in Contract GP. Creditor days were 17 days (2017: 18 
  days). Provisions decreased by GBP3.3 million primarily due to a GBP5.3 million utilisation in a 
provision for the relocation of central support functions from London to Glasgow. 
 
Investment in subsidiaries (Company only) 
 
In the previous two years an impairment charge was recognised in respect of the Company's carrying 
value of investments in subsidiaries. This was primarily in respect of the Group's UK operations. In 
2018, we considered whether there were new indicators of impairment and did not identify any 
circumstances or triggers which would require a formal impairment test to be performed. However, as 
set out in the Risk section, at the date of signing the financial statements, there is ongoing 
uncertainty surrounding the potential outcomes of Brexit. This is being monitored and there remains a 
risk that Brexit outcome could trigger an impairment risk in 2019 or future periods. 
 
Cash Flow 
 
 On an adjusted basis, we generated net cash from operations of GBP40.6 million (2017: GBP41.1 million on 
an adjusted basis) due to continued growth of the Contract runner book increasing our working capital 
and an increase in DSOs. This resulted in a lower cash conversion ratio of 67% (2017: 79%) on an 
adjusted basis or 52% (2017: 90%) on a reported basis. 
 
  Capital expenditure (excluding GBP1.0 million in exceptional capital expenditure) reduced to GBP4.2 
 million (2017: GBP5.8 million), the majority of which was in relation to infrastructure investment in 
offices in the Netherlands, Germany and UK, and investment in the Contractor Timesheet Portal 
 ('Workflow') of GBP0.6 million. We expect capital expenditure will increase year on year in 2019, to 
address security, out of support systems and a number of office moves. Investments in available for 
  sale financial assets were GBPnil (2017: GBP1.2 million) in the year. 
 
  During the year, SThree plc bought back shares for GBP1.5 million (2017: GBP7.8 million) to satisfy 
employee share schemes in future periods, and repurchased 411,354 of its ordinary shares at an 
average price of 357 pence for immediate cancellation. Small cash inflows were generated from share 
based payment schemes. 
 
  Income tax payments increased to GBP14.4 million (2017: GBP10.9 million). Small cash outflows were made 
for interest payments. 
 
Dividend payments were GBP18.0 million (2017: GBP18.0 million) and there was a small cash outflow of GBP0.1 
million representing distributions to tracker shareholders. 
 
We started the year with the net cash of GBP5.6 million and closed the financial year with the net debt 
 of GBP4.1 million. The year-on-year decrease primarily reflected increased cash absorbed in working 
 capital as the Contract business continued to grow, increased DSOs, and the GBP11.5 million cash cost 
of the restructuring of the support functions in the UK. We expect DSOs to improve in 2019 and the 
restructuring cash costs to be significantly less in the first half of 2019, as the project is now 
substantially complete. 
 
Treasury management 
 
We finance the Group's operations through equity and bank borrowings. The Group's cash management 
policy is to minimise interest payments by closely managing Group cash balances and external 
borrowings. We intend to continue this strategy while maintaining a strong balance sheet position. 
 
 We maintain a committed Revolving Credit Facility ('RCF') of GBP50 million, along with an uncommitted 
 GBP20 million accordion facility, with Citibank and HSBC, giving the Group an option to increase its 
 total borrowings to GBP70 million for general corporate purposes. This facility was successfully 
renegotiated earlier in the year and extended to May 2023, on similar terms and conditions to the 
  previous facility. We also have an uncommitted GBP5 million overdraft facility with NatWest and a GBP5 
million overdraft facility with HSBC. 
 
  At the year end, the Group had drawn down GBP37.4 million (2017: GBP12.0 million) on these facilities. 
 
The RCF is subject to financial covenants requiring the Group to maintain financial ratios over 
interest cover of at least 4.0, leverage of at least 3.0 and guarantor cover at 85% of EBITDA and 
gross assets. In 2018, we ended the year with significant headroom on all our covenants. 
 
The funds borrowed under this facility bear interest at a minimum annual rate of 1.3% above 3 month 
LIBOR, giving an average interest rate of 1.8% during the year (2017: 1.5%). The finance costs for 
  the year amounted to GBP0.7 million (2017: GBP0.4 million). 
 
The Group's UK-based treasury function manages the Group's treasury risks in accordance with policies 
and procedures set by the Board, and is responsible for day-to-day cash management; the arrangement 
of external borrowing facilities; the investment of surplus funds; and the management of the Group's 
interest rate and foreign exchange risks. The treasury function does not engage in speculative 
transactions or operate as a profit centre. 
 
Foreign exchange 
 
Foreign exchange volatility continues to be a significant factor in the reporting of the overall 
performance of the business with the main functional currencies of the Group entities being Sterling, 
the Euro and the US Dollar. 
 
For 2018, movements in exchange rates between Sterling and the Euro and the US Dollar provided a 
moderate net headwind to the reported performance of the Group with the highest impact coming from 
the Euro and US Dollar. The exchange rate movements decreased our reported 2018 GP by approximately 
GBP0.7 million and operating profit by GBP0.1 million. 
 
Our financial performance KPIs remain materially sensitive to exchange rate movements. By way of 
illustration, each one per cent movement in annual exchange rates of the Euro and US Dollar against 
Sterling impacted our 2018 GP by GBP1.8 million and GBP0.7 million, respectively, and operating profit by 
GBP0.5 million and GBP0.2 million, respectively. 
 
The Board considers it appropriate in certain cases to use derivative financial instruments as part 
of its day-to-day cash management to provide the Group with protection against adverse movements in 
the Euro and US dollar during the settlement period. The Group does not use derivatives to hedge 
translational foreign exchange exposure in its balance sheet and income statement. 
 
Principal Risks and Uncertainties 
 
Connecting risk, opportunity and strategy 
 
Principal risks and uncertainties affecting the business activities of the Group will be detailed 
within the Strategic Report section of the Group's 2018 Annual Report, a copy of which will be 
available on the Group's website www.sthree.com [1]. 
 
Delivering on our strategy requires all parts of our business to work together. In isolation risk 
mitigation helps SThree manage specific subjects and areas of the business. However, when brought 
into our day-to-day activities successful risk management has helped us to maximise our competitive 
advantage and deliver on our strategic priorities in 2018. Whilst the ultimate responsibility for 
risk management rests with the Board, the effective day-to-day management of risk is in the way we do 
business and our culture. 
 
Aligning risks and strategy by using risk to help make the right strategic decisions - in order to 
deliver our strategy and competitive advantage throughout the business we must ensure that we 
maintain a balance between safeguarding against potential risks and taking advantage of all potential 
opportunities. 
 
consolidated income statement 
 
For the year ended 30 November 2018 
                                          2018                            2017 
                        Before Exceptional   Total  Before   Exceptional Total 
                        except       items          except         items 
                         ional                       ional 
                         items                       items 
                  Note   GBP'000       GBP'000   GBP'000   GBP'000         GBP'000 GBP'000 
 
Continuing 
operations 
 
Revenue              2 1,258,            - 1,258,  1,114,              - 1,114 
                           152                 152     530                ,530 
Cost of                (937,0            - (937,0  (826,8              - (826, 
sales                      26)                 26)     58)                858) 
 
Gross profit         2 321,12            - 321,12  287,67              - 287,6 
                             6                   6       2                  72 
 
Administrative       3 (267,2      (6,397) (273,6  (242,7        (6,741) (249, 
expenses                   11)                 08)     52)                493) 
 
Operating            4  53,915     (6,397)  47,518 44,920        (6,741) 38,17 
profit                                                                       9 
                                                      124 
                                                    (439) 
                                                    (147) 
 
Finance                     75           -      75     124             -   124 
income 
Finance                  (743)           -   (743)   (439)             - (439) 
costs 
Gain on                    146           -     146   (147)             - (147) 
disposal/(Sh 
are of 
losses) of 
associate 
 
Profit before           53,393     (6,397)  46,996  44,458       (6,741) 37,71 
taxation                                                                     7 
 
Taxation             5 (13,85        1,127 (12,72  (11,39          1,303 (10,0 
                            1)                  4)      2)                 89) 
 
Profit for the          39,542     (5,270)  34,272  33,066       (5,438) 27,62 
year attributable                                                            8 
to owners of the 
Company 
 
Earnings per         7   pence       pence   pence   pence         pence pence 
share 
 
Basic                     30.7       (4.1)    26.6 25.7            (4.2)  21.5 
                                                   24.9 
 
Diluted                   29.7       (4.0)    25.7    24.9         (4.1)  20.8 
 
consolidated statement of comprehensive income 
For the year ended 30 November 2018 
                                                   2018     2017 
                                                  GBP'000    GBP'000 
 
Profit for the year                              34,272   27,628 
 
Other comprehensive income/(loss): 
Items that may be subsequently reclassified to 
profit or loss: 
Exchange differences on retranslation of          2,572  (1,083) 
foreign operations 
 
Total other comprehensive income/(loss) for       2,572  (1,083) 
the year (net of tax) 
 
Total comprehensive income for the year          36,844   26,545 
attributable to owners of the Company 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
As at 30 November 2018 
                                         30 November 30 November 
                                                2018        2017 
                                Note           GBP'000       GBP'000 
 
              Assets 
  Non-current assets 
 Property, plant and                           6,915       6,746 
           equipment 
   Intangible assets                           9,609      11,386 
       Investment in                               -         655 
           associate 
   Other investments                           1,977       1,110 
 Deferred tax assets                           2,750       4,199 
                                              21,251      24,096 
 
      Current assets 
     Trade and other                         285,618     226,558 
         receivables 
  Current tax assets                           2,751       1,534 
       Cash and cash               8          50,844      21,338 
         equivalents 
                                             339,213     249,430 
 
        Total assets                         360,464     273,526 
 
          Equity and 
         Liabilities 
        Equity attributable to owners of the Company 
       Share capital                           1,319       1,317 
       Share premium                          30,511      28,806 
      Other reserves                         (5,275)     (8,556) 
   Retained earnings                          75,116      59,138 
 
        Total equity                         101,671      80,705 
 
         Non-current 
         liabilities 
      Provisions for                           1,569       2,172 
     liabilities and 
             charges 
 
 Current liabilities 
          Borrowings               9          37,428      12,000 
      Bank overdraft               8          17,521       3,717 
      Provisions for                           9,614      12,352 
     liabilities and 
             charges 
     Trade and other                         191,742     159,556 
            payables 
         Current tax                             919       3,024 
         liabilities 
                                             257,224     190,649 
   Total liabilities                         258,793     192,821 
 
    Total equity and                         360,464     273,526 
         liabilities 
 
consolidated statement of 
changes in equity 
for the year ended 30 
November 2018 
                     Share   Share    Capital Capital Treas    Currency Retained Total 
                   capital premium redemption reserve   ury translation earnings equit 
                                      reserve         reser     reserve              y 
                                                         ve                      attri 
                                                                                 butab 
                                                                                 le to 
                                                                                 owner 
                                                                                  s of 
                                                                                   the 
                                                                                 Compa 
                                                                                    ny 
 
              Note   GBP'000   GBP'000      GBP'000   GBP'000 GBP'000       GBP'000    GBP'000 GBP'000 
 
Balance at 1         1,312  27,406        168     878 (6,44          16   52,333 75,67 
December 2016                                         3)                             0 
Profit for               -       -          -       -     -           -   27,628 27,62 
the year                                                                             8 
Other                    -       -          -       -     -     (1,083)        - (1,08 
comprehensive                                                                       3) 
loss for the 
year 
Total                    -       -          -       -     -     (1,083)   27,628 26,54 
comprehensive                                                                        5 
income for 
the year 
Dividends        6       -       -          -       -     -           - (17,994) (17,9 
paid to                                                                            94) 
equity 
holders 
Distributions            -       -          -       -     -           - (115)    (115) 
to tracker 
shareholders 
Settlement of            4   1,185          -       - 2,746           -  (3,060)   875 
vested 
tracker 
shares 
Settlement of            1     215          -       - 2,959           - (2,972)    203 
share-based 
payments 
Purchase of              -       -          -       - (4,61           -        - (4,61 
own shares                                               8)                         8) 
Purchase of              -       -          -       - (3,17           -        - (3,17 
own shares by                                            9)                         9) 
Employee 
Benefit Trust 
Credit to                -       -          -       -     -           -    3,256 3,256 
equity for 
equity-settle 
d share-based 
payments 
Current and      5       -       -          -       -     -           -       62    62 
deferred tax 
on 
share-based 
payment 
transactions 
Total                    5   1,400          -       - (2,09     (1,083)    6,805 5,035 
movements in                                          2) 
equity 
 
Balance at 30        1,317  28,806        168     878 (8,53     (1,067)   59,138 80,70 
November 2017                                         5)                             5 
Profit for               -       -          -       -     -           -   34,272 34,27 
the year                                                                             2 
Other                    -       -          -       -     -       2,572        - 2,572 
comprehensive 
income for 
the year 
Total                    -       -          -       -     -       2,572   34,272 36,84 
comprehensive                                                                        4 
income for 
the year 
Dividends        6       -       -          -       -     -           - (18,007) (18,0 
paid to                                                                            07) 
equity 
holders 
Distributions            -       -          -       -     -           -    (124) (124) 
to tracker 
shareholders 
Settlement of            4   1,306          -       - 2,124           -  (3,306)   128 
vested 
tracker 
shares 
Settlement of            2     399          -       -    65           -     (65)   401 
share-based 
payments 
Cancellation           (4)       -          4       -     -           -  (1,468) (1,46 
of share                                                                            8) 
capital 
Purchase of              -       -          -       - (1,48           -        - (1,48 
own shares by                                            4)                         4) 
Employee 
Benefit Trust 
Credit to                -       -          -       -     -           -    4,697 4,697 
equity for 
equity-settle 
d share-based 
payments 
Current and      5       -       -          -       -     -           -     (21)  (21) 
deferred tax 
on 
share-based 
payment 
transactions 
Total                    2   1,705          4       -   705       2,572   15,978 20,96 
movements in                                                                         6 
equity 
 
Balance at 30        1,319  30,511        172     878 (7,83       1,505   75,116 101,6 
November 2018                                         0)                            71 
 
consolidated statement of cash flows 
For the year ended 30 November 2018 
                                                  2018     2017 
                                        Note     GBP'000    GBP'000 
 
Cash flows from 
operating activities 
Profit before taxation                          46,996   37,717 
after exceptional items 
Adjustments for: 
Depreciation and                                 6,145    5,744 
amortisation charge 
Accelerated                                        709      309 
amortisation and 
impairment of 
intangible assets 
Finance income                                    (75)    (124) 
Finance cost                                       743      439 
Loss on disposal of                        4         8      110 
property, plant and 
equipment 
(Gain on                                         (146)      147 
disposal)/Share of 
losses of associate 
Loss on disposal of                                 70      144 
subsidiaries 
FX revaluation gain on                            (26)        - 
other investments 
Non-cash charge for                              4,697    3,256 
share-based payments 
Operating cash flows before changes in 
working capital and provisions 
                                      59,121    47,742 
Increase in receivables                       (55,372) (35,712) 
Increase in payables                            30,116   19,291 
(Decrease)/increase in                         (3,796)    8,758 
provisions 
 
Cash generated from                             30,069   40,079 
operations 
Interest received                                   35      124 
Income tax paid - net                         (14,391) (10,921) 
 
Net cash generated from operating               15,713   29,282 
activities 
 
Cash generated from operating activities        26,208   30,273 
before exceptional items 
Net cash outflow from recognised              (10,495)    (991) 
exceptional items 
Net cash generated from operating               15,713   29,282 
activities 
 
Cash flows from 
investing activities 
Purchase of property,                          (3,161)  (2,374) 
plant and equipment 
Purchase of intangible                         (2,043)  (3,392) 
assets 
Investments designated                               -    (383) 
as available-for-sale 
Investment in an                                     -    (802) 
associate 
 
Net cash used in investing activities          (5,204)  (6,951) 
 
Cash flows from 
financing activities 
Proceeds from                              9    25,428   12,000 
borrowings 
Interest paid                                    (540)    (431) 
Proceeds from exercise                             401      215 
of share options 
Employee subscription                              644       98 
for tracker shares 
Cancellation of share                          (1,468)        - 
capital 
 
Purchase of own shares                         (1,484)  (7,797) 
Dividends paid to                          6  (18,007) (17,994) 
equity holders 
Distributions to                                 (116)    (115) 
tracker shareholders 
 
Net cash generated                               4,858 (14,024) 
from/(used in) 
financing activities 
 
Net increase in cash and cash equivalents       15,367    8,307 
Cash and cash equivalents at beginning of       17,621   10,022 
the year 
Exchange gains/(losses)                            335    (708) 
relating to cash and 
cash equivalents 
 
Net cash and cash                          8    33,323   17,621 
equivalents at end of 
the year 
 
Notes to the Financial Information 
 
For the year ended 30 November 2018 
 
1. Accounting policies 
 
Basis of preparation 
 
The financial information in this preliminary announcement has been extracted from the Group audited 
financial statements for the year ended 30 November 2018 and does not constitute statutory accounts 
within the meaning of section 434 of the Companies Act 2006. The Group financial statements and this 
preliminary announcement were approved by the Board of Directors on 25 January 2019. 
 
The auditors have reported on the Group's financial statements for the years ended 30 November 2018 
and 30 November 2017 under s495 of the Companies Act 2006. The auditors' reports are unqualified and 
do not contain a statement under section 498(2) or (3) of the Companies Act 2006. The Group's 
statutory financial statements for the year ended 30 November 2017 have been filed with the Registrar 
of Companies and those for the year ended 30 November 2018 will be filed following the Company's 
Annual General Meeting. 
 
The Group's financial statements have been prepared in accordance with International Financial 
Reporting Standards ('IFRSs') and IFRS Interpretations Committee ('IFRS IC') as adopted and endorsed 
by the European Union and have been prepared under the historical cost convention with the exception 
of certain financial instruments classified as available for sale. 
 
The same accounting policies, presentation and computation methods are followed in this preliminary 
announcement as in the preparation of the Group financial statements. The accounting policies have 
been applied consistently by the Group. 
 
Going concern 
 
The Group's business activities, together with the factors likely to affect its future development, 
performance, its financial position, cash flows, liquidity position and borrowing facilities are 
described in the strategic section of the Annual Report. In addition, notes to the Group financial 
statements include details of the Group's treasury activities, funding arrangements and objectives, 
policies and procedures for managing various risks including liquidity, capital management and credit 
risks. 
 
The Directors have considered the Group's forecasts, including taking account of reasonably possible 
changes in trading performance, and the Group's available banking facilities. Based on this review 
and after making enquiries, the Directors have a reasonable expectation that the Group has adequate 
resources to continue in operational existence for the foreseeable future. For this reason, the 
Directors continue to adopt a going concern basis in preparing these financial statements and this 
preliminary announcement. 
 
2. SEGMENTAL ANALYSIS 
 
IFRS 8 'Segmental Reporting' requires operating segments to be identified on the basis of internal 
results about components of the Group that are regularly reviewed by the entity's chief operating 
decision maker to make strategic decisions and assess segment performance. 
 
Management has determined the chief operating decision maker to be the Executive Committee made up of 
the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the Chief 
People Officer and the Chief Sales Officer, with other senior management attending via invitation. 
Operating segments have been identified based on reports reviewed by the Executive Committee, which 
consider the business primarily from a geographical perspective. The Group segments the business into 
four regions: the United Kingdom & Ireland ('UK&I'), Continental Europe, the USA and Asia Pacific & 
Middle East ('APAC & ME'). 
 
The Group's management reporting and controlling systems use accounting policies that are the same as 
those described in note 1 to the Group financial statements in the summary of significant accounting 
policies. 
 
Revenue and Gross Profit by reportable segment 
 
The Group measures the performance of its operating segments through a measure of segment profit or 
loss which is referred to as "Gross Profit" in the management reporting and controlling systems. 
Gross profit is the measure of segment profit comprising revenue less cost of sales. 
 
Intersegment revenue is recorded at values which approximate third party selling prices and is not 
significant. 
 
                                REVENUE         GROSS PROFIT 
                               2018     2017      2018      2017 
                              GBP'000    GBP'000     GBP'000     GBP'000 
 
Continental Europe          716,058  576,018   183,367   150,636 
UK&I                        268,031  269,777    53,144    55,687 
USA                         215,099  212,737    66,654    64,369 
APAC & ME                    58,964   55,998    17,961    16,980 
 
                           1,258,15 1,114,53   321,126   287,672 
                                  2        0 
 
Continental Europe primarily includes Austria, Belgium, France, Germany, Luxembourg, Netherlands, 
Spain and Switzerland. 
 
APAC & ME mainly includes Australia, Dubai, Hong Kong, Japan, Malaysia and Singapore. 
 
Other information 
 
The Group's revenue from external customers, its gross profit and information about its segment 
assets (non-current assets excluding deferred tax assets) by key location are detailed below: 
 
                           REVENUE            GROSS PROFIT 
                           2018     2017        2018        2017 
                          GBP'000    GBP'000       GBP'000       GBP'000 
 
Germany                 310,399  256,825      93,701      78,021 
UK                      256,056  259,028      48,814      51,922 
Netherlands             237,904  180,602      48,563      38,039 
USA                     215,099  212,737      66,654      64,369 
Other                   238,694  205,338      63,394      55,321 
 
                      1,258,152 1,114,53     321,126     287,672 
                                       0 
 
                                           NON-CURRENT ASSETS 
                                         30 November 30 November 
                                                2018        2017 
                                               GBP'000       GBP'000 
 
UK                                            14,354      15,702 
USA                                            1,136       1,608 
Germany                                        1,060       1,132 
Netherlands                                      803         431 
Other                                          1,148       1,024 
 
                                              18,501      19,897 
 
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       GROSS PROFIT 
                               2018     2017      2018      2017 
                              GBP'000    GBP'000     GBP'000     GBP'000 
 
Brands 
Progressive                 401,959  344,537    92,064    77,105 
Computer Futures            362,958  311,134    96,672    83,700 
Huxley Associates           254,119  228,529    60,128    56,183 
Real Staffing Group         239,116  230,330    72,263    70,684 
 
                          1,258,152 1,114,53   321,126   287,672 
                                           0 
 
Other brands including Global Enterprise Partners, JP Gray, Madison Black, Newington International 
and Orgtel are rolled into the above brands. 
 
Recruitment classification 
Contract                                   1,169,141 1,0 232 203 
                                                     30, ,11 ,50 
                                                     359   5   1 
Permanent                                     89,011 84, 89, 84, 
                                                     171 011 171 
                                           1,258,152 1,1 321 287 
                                                     14, ,12 ,67 
                                                     530   6   2 
 
Sectors 
Information & Communication Technology       580,732 502 141 124 
                                                     ,29 ,97 ,74 
                                                       9   0   6 
Life Sciences                                195,102 176 66, 62, 
                                                     ,87 250 351 
                                                       0 
Banking &                                    180,122 181 42, 43, 
Finance                                              ,00 454 502 
                                                       7 
Energy                                       169,018 142 33, 26, 
                                                     ,82 452 494 
                                                       2 
Engineering                                  111,608 97, 30, 25, 
                                                     469 618 851 
Other                                         21,570 14, 6,3 4,7 
                                                     063  82  28 
 
                                           1,258,152 1,1 321 287 
                                                     14, ,12 ,67 
                                                     530   6   2 
 
Other includes Procurement & Supply Chain and Sales & Marketing. 
 
3. ADMINISTRATIVE EXPENSES - EXCEPTIONAL ITEMS 
 
A strategic relocation of the majority of our central support functions away from our London 
headquarters to a new facility located within Glasgow was announced on 1 November 2017. The 
transition to the Glasgow Centre of Excellence is now substantially complete and we anticipate that 
 this restructuring will realise cost savings ahead of expectations, in excess of GBP5 million per 
annum. 
 
In line with the project implementation timescale, benefits started to be realised in the second half 
 of this financial year and led to the recognition of GBP2.6 million in savings in 2018. The trajectory 
 of the realised savings is expected to result in additional savings of GBP2.9 million in support costs 
in 2019. 
 
 We continue to anticipate that one-off restructuring costs will be in the region of GBP14.0 million, 
 with circa GBP12.9 million of operating expenses, including personnel costs and professional advisor 
 fees, and circa GBP1.1 million of property related costs. The project is being partially funded by a 
 grant receivable from Scottish Enterprise of circa GBP2.1 million which is receivable and recognisable 
over several years, subject to the terms of the grant being met within a fixed timeframe. 
 
 Net exceptional costs of GBP6.4 million have been charged to the Consolidated Income Statement during 
  the year, bringing the total costs recognised to date to GBP13.1 million (2017: GBP6.7 million). The 
  exceptional charge in the year included personnel costs of GBP4.1 million and other costs of GBP2.7 
 million (primarily professional and property costs). During the year, the grant income of GBP0.4 
million was recognised as an offset to the exceptional costs of an agreed percentage of gross wages 
for each full time role created in the Centre of Excellence in the year. 
 
A restructuring provision can only include the direct expenditure arising from the announced 
strategic restructuring, which are costs that are both necessarily entailed by the restructuring and 
not associated with the ongoing activities of the entity. Restructuring items related to the 
transition, design and set up of the new support function for which there is no constructive 
obligation at period end have not been included within the restructuring provision and will be 
recognised as incurred. The remaining balance of the provision for redundancy costs for employees, 
  who will leave the business post the year end date, amounted to GBP1.1 million (2017: GBP5.7 million). 
 
Due to the material size and non-recurring nature of this strategic restructuring project, the 
associated costs have been separately disclosed as exceptional items in the Consolidated Income 
Statement in line with their treatment in 2017. Disclosure of items as exceptional, highlights them 
and provides a clearer, comparable view of underlying earnings. 
 
Items classified as exceptional were as follows: 
 
                                                      2018  2017 
                                                     GBP'000 GBP'000 
 
Exceptional items - 
charged to operating 
profit 
Staff costs and                                      4,075 5,709 
redundancy 
Professional advisor fees                            1,050 1,017 
Property costs                                         898     - 
Travel                                                 496     - 
Recruitment                                            282     - 
Other                                                   14    15 
Total exceptional costs                              6,815 6,741 
Grant income                                         (418)     - 
Total net exceptional costs                          6,397 6,741 
 
4. OPERATING PROFIT 
 
Operating profit is stated after charging/(crediting): 
 
                                                     2018  2017 
                                                    GBP'000 GBP'000 
 
Depreciation                                        2,852 2,516 
Amortisation                                        3,049 3,228 
Accelerated                                           244     - 
depreciation 
Accelerated amortisation and impairment of            709   309 
intangible assets 
Foreign exchange                                    (644) (345) 
gains 
Staff costs                                        206,71 187,4 
                                                        3    19 
Movement in bad debt provision and debts            1,279   496 
directly written off 
Loss on disposal of property, plant                     8   110 
and equipment 
Loss on disposal of                                    62    66 
intangible assets 
Net exceptional                                     6,397 6,741 
restructuring costs 
Net (gain)/loss on disposal of                       (76)   144 
subsidiaries and associate (1) 
Operating lease 
charges 
- Motor                                             1,771 1,790 
vehicles 
- Land and                                         12,647 12,00 
buildings                                                     5 
 
 (1) The net gain on disposal of GBP76k comprises (i) GBP70k in the accumulated foreign exchange net loss 
reclassified from Currency Translation Reserve to the Consolidated Income Statement on liquidation of 
 subsidiary companies; and (ii) GBP146k gain on disposal of associate. 
 
5. TAXATION 
 
(a) Analysis of tax charge for the year 
 
                                                2018                                 2017 
                       Before   Exceptional Total         Before     Exceptional    Total 
                       except         items           exceptiona           items 
                        ional                            l items 
                        items 
                        GBP'000         GBP'000 GBP'000          GBP'000           GBP'000    GBP'000 
 
Current taxation 
 
Corporation tax        12,862 (1,127                11,735    13,520          (946)   12,574 
charged/(credited)                 ) 
on profits for the 
year 
Adjustments in          (541)      -              (541)            (758)             -    (758) 
respect of prior 
periods 
 
Total current          12,321 (1,127             11,194           12,762         (946)   11,816 
tax                                ) 
charge/(credit) 
 
Deferred 
taxation 
Origination             2,308      -            (2,308)            (743)         (357) (1,100 
and reversal                                                                                  ) 
of temporary 
differences 
Adjustments             (778)      -              (778)            (627)             -    (627) 
in respect 
of prior 
periods 
 
Total                   1,530      -              1,530          (1,370)         (357) (1.727 
deferred tax                                                                                  ) 
credit 
 
Total income           13,851 (1,127             12,724           11,392       (1,303)   10,089 
tax                                ) 
charge/(cred 
it) in the 
income 
statement 
 
(b) Reconciliation of the effective tax rate 
 
The Group's tax charge for the year exceeds (2017: exceeds) the UK statutory rate and can be 
reconciled as follows: 
 
                                   2018                     2017 
               Before Exceptional Total Before Exceptional Total 
               except       items       except       items 
                ional                    ional 
                items                    items 
                GBP'000       GBP'000 GBP'000  GBP'000       GBP'000 GBP'000 
 
Profit         53,393     (6,397) 46,99 44,458     (6,741) 37,71 
before                                6                        7 
taxation 
 
Profit 
before 
taxation 
multiplied 
by the 
standard 
rate of 
corporation 
tax in the 
UK at 19.00% 
(2017: 
19.33%) 
     10,1 (1,2  8,929       8,594 (1,30  7,291 
       44  15)                       3) 
 
Effects of: 
Disallowable      988          88 1,076    847           -   847 
items 
Differing       3,029           - 3,029  2,725           - 2,725 
tax rates on 
overseas 
earnings 
Adjustments    (1,319           - (1,31 (1,385           - (1,38 
in respect          )                9)      )                5) 
of prior 
periods 
Adjustment        816           -   816     33           -    33 
due to tax 
rate changes 
Tax losses        193           -   193    578           -   578 
for which 
deferred tax 
asset was 
derecognised 
 
Tax            13,851     (1,127) 12,72 11,392     (1,303) 10,08 
charge/(cred                      4                            9 
it) for the 
year 
 
Effective       25.9%       17.6% 27.1%  25.6%       19.3% 26.7% 
tax rate 
 
(c) Current and deferred tax movement recognised directly in equity 
 
                                                     30       30 
                                               November November 
                                                   2018     2017 
                                                  GBP'000    GBP'000 
 
Equity-settled share-based payments 
Current tax                                         (2)        - 
Deferred tax                                       (19)     (62) 
 
                                                   (21)     (62) 
 
The Group expects to receive additional tax deductions in respect of share options currently 
unexercised. Under IFRS, the Group is required to provide for deferred tax on all unexercised share 
options. Where the amount of the tax deduction (or estimated future tax deduction) exceeds the amount 
of the related cumulative remuneration expense, this indicates that the tax deduction relates not 
only to remuneration expense but also to an equity item. In this situation, the excess of the current 
 or deferred tax should be recognised in equity. At 30 November 2018, a deferred tax asset of GBP0.9 
 million (2017: GBP1.0 million) has been recognised in respect of these options. 
 
6. DIVIDENDS 
 
                                                     2018   2017 
                                                    GBP'000  GBP'000 
 
Amounts recognised as distributions to equity holders 
in the year 
Interim dividend of 4.7p (2017: 4.7p) per           6,041  6,052 
share (i) 
Final dividend of 9.3p (2017:                      11,966 11,942 
9.3p) per share (ii) 
 
                                                   18,007 17,994 
 
Amounts proposed as distributions to equity 
holders 
Interim dividend of 4.7p (2017: 4.7p) per           6,077  6,038 
share (iii) 
Final dividend of 9.8p (2017: 9.3p) per share      12,819 12,086 
(iv) 
 
(i) 2017 interim dividend of 4.7 pence (2016: 4.7 pence) per share was paid on 8 December 2017 to 
shareholders on record at 3 November 2017. 
 
(ii) 2017 final dividend of 9.3 pence (2016: 9.3 pence) per share was paid on 8 June 2018 to 
shareholders on record at 27 April 2018. 
 
(iii) 2018 interim dividend of 4.7 pence (2017: 4.7 pence) per share was paid on 7 December 2018 to 
shareholders on record at 2 November 2018. 
 
(iv) The Board has proposed a 2018 final dividend of 9.8 pence (2017: 9.3 pence) per share, to be 
paid on 7 June 2019 to shareholders on record at 26 April 2019. This proposed final dividend is 
subject to approval by shareholders at the Company's next Annual General Meeting on 24 April 2019, 
and therefore, has not been included as a liability in these financial statements. 
 
7. EARNINGS PER SHARE 
 
The calculation of the basic and diluted earnings per share ('EPS') is set out below: 
 
Basic EPS is calculated by dividing the earnings attributable to owners of the Company by the 
weighted average number of shares in issue during the year excluding shares held as treasury shares 
and those held in the EBT which are treated as cancelled. 
 
For diluted EPS, the weighted average number of shares in issue is adjusted to assume conversion of 
dilutive potential shares. Potential dilution resulting from tracker shares takes into account 
profitability of the underlying tracker businesses and SThree plc's earnings per share. Therefore, 
the dilutive effect on EPS will vary in future periods depending on any changes in these factors. 
 
                                                    30       30 
                                              November November 
                                                  2018     2017 
                                                 GBP'000    GBP'000 
 
Earnings 
Profit for the year after tax before            39,542   33,066 
exceptional items 
Exceptional items net of tax                   (5,270)  (5,438) 
Profit for the year attributable to             34,272   27,628 
owners of the Company 
 
                                               million  million 
 
Number of shares 
Weighted average number of shares used           128.7    128.6 
for basic EPS 
Dilutive effect of share plans                     4.4      4.0 
 
Diluted weighted average number of               133.1    132.6 
shares used for diluted EPS 
 
                                                    30       30 
                                              November November 
                                                  2018     2017 
                                                 pence    pence 
 
Basic 
Basic EPS before exceptional items                30.7     25.7 
Impact of exceptional items                      (4.1)    (4.2) 
Basic EPS after exceptional items                 26.6     21.5 
 
Diluted 
Diluted EPS before exceptional items              29.7     24.9 
Impact of exceptional items                      (4.0)    (4.1) 
Diluted EPS after exceptional items               25.7     20.8 
 
8. CASH AND CASH EQUIVALENTS 
 
                                                       30     30 
                                                   Novemb Novemb 
                                                       er     er 
                                                     2018   2017 
                                                    GBP'000  GBP'000 
 
Cash at bank                                       50,844 21,338 
Bank overdraft                                     (17,52 (3,717 
                                                       1)      ) 
 
Net cash and cash equivalents per the              33,323 17,621 
consolidated statement of cash flow 
 
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 is 
approximately equal to their fair values. 
 
The Group has cash pooling arrangements in place which allow any one account to be overdrawn up to 
  GBP50 million, so long as the overall pool of accounts does not exceed a net overdrawn position of GBP5 
million. 
 
9. BORROWINGS 
 
  The Group has access to a committed RCF of GBP50 million along with an uncommitted GBP20 million 
accordion facility in place with HSBC and Citibank, giving the Group an option to increase its total 
 borrowings under the facility to GBP70 million. The funds borrowed under the facility bear interest at 
a minimum annual rate of 1.3% (2017: 1.3%) above the appropriate Sterling LIBOR. The average interest 
 rate paid on the RCF during the year was 1.8% (2017: 1.5%). The Group also has an uncommitted GBP5 
 million overdraft facility with NatWest and a GBP5 million overdraft facility with HSBC. 
 
  At the year end, the Group had drawn down GBP37.4 million (2017: GBP12.0 million) on these facilities. 
 
The RCF is subject to certain covenants requiring the Group to maintain financial ratios over 
interest cover, leverage and guarantor cover. The Group has been in compliance with these covenants 
throughout the year. 
 
In May 2018, the Directors successfully renegotiated the RCF with its key terms and conditions 
(including the total amount available under the facility and interest margin) remaining unchanged and 
the term of the facility having been extended until 2023. Since there was no substantial modification 
to the underlying terms and conditions, the refinancing of the existing facility did not qualify for 
derecognition, hence no modification gain or loss was recognised in the consolidated income statement 
 
10. ANNUAL REPORT AND ANNUAL GENERAL MEETING 
 
The 2018 Annual Report and Notice of 2018 Annual General Meeting will be posted to shareholders 
shortly. Copies will be available on the Company's website www.sthree.com or from the Company 
Secretary, 1st Floor, 75 King William Street, London, EC4N 7BE. The Annual General Meeting of SThree 
plc is to be held on 24 April 2019. 
 
=---------------------------------------------------------------------------------------------------- 
 
[1] * Variances in constant currency 
 
[2] * Variances in constant currency 
 
[3] * Variances in constant currency 
 
[4] * Variances in constant currency 
 
[5] * Variances in constant currency 
 
[6] * Variances in constant currency 
 
[7] * Variances in constant currency 
 
[8] *Variances in constant currency 
 
ISIN:           GB00B0KM9T71 
Category Code:  FR 
TIDM:           STHR 
LEI Code:       2138003NEBX5VRP3EX50 
OAM Categories: 1.1. Annual financial and audit reports 
Sequence No.:   7264 
EQS News ID:    769857 
 
End of Announcement EQS News Service 
 
 
1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=04ccb9928f205f22063cbe5da1a3724c&application_id=769857&site_id=vwd_london&application_name=news 
 

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