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SThree (STHR) 16 March 2018
Q1 Trading Update
SThree plc ("SThree" or the "Group"), the international STEM+ specialist staffing business, is today issuing a trading update covering the period from 1 December 2017 to date; financial information relates to the quarter ended 28 February 2018.
Highlights
+Science, Technology, Engineering & Mathematics ++ Germany, Austria and Switzerland
Gary Elden, Chief Executive, commented:
"While Q1 is our least significant quarter, we've made an encouraging start to the new financial year.
"Our Contract business continues to go from strength to strength, with GP increased by 11%* in Q1, driven by continued strong growth in Continental Europe, especially key markets such as the Netherlands and Germany. Growth in Contract GP from our Life Sciences, ICT and Energy businesses has also been particularly pleasing.
"As anticipated, the growth rate in our US business reflected the tough prior year comparatives from Q1 2017. The market opportunity in the USA remains very strong and we expect to see an improving performance from this business.
"Our Permanent GP increased by 2%*, driven by strong performances in Germany up 13%* and in Japan up 75%*.
"Looking ahead, we will continue to invest in our highest performing teams, consistent with our vision to be the number one STEM talent provider in the best STEM markets. Our focus on Contract and the continued strength of our performance in Continental Europe and across key sectors leave us confident that there are good growth opportunities available for us this year."
Q1 Group gross profit ("GP") was up 8%* YoY (Q4 2017: +8%*), driven, in particular, by strong growth in Continental Europe.
Contract remains the driving force of this strong performance, with GP up 11%* YoY. This growth was driven by Continental Europe up 19%* and the USA up 10%*, which together represent 76% of Group Contract GP.
Permanent GP was up 2%* YoY (Q4 2017: -5%*), with Germany up 13%*, supported by growth in APAC & MENA up 44%*. The USA was down 18%*, reflecting the previously highlighted strong prior year comparatives (Q1 2017: +16%*).
Average Group sales headcount was up 12% YoY with Continental Europe up 20%, USA up 16% and UK&I down 2%. Average Permanent headcount was up 4% and average Contract headcount was up 17%. Contract headcount now represents 66% of Group sales headcount (Q1 2017: 63%).
The strategic restructuring and relocation of our London based support functions to Glasgow, as previously announced, is progressing well. We remain on track to deliver the expected benefits.
The Group opened two new offices in Eindhoven and Washington D.C. during the period to better service its clients. We now have a network of 43 offices in 16 countries, of which 35 are outside the UK. The Group generated 82% of GP for the period from markets outside the UK&I (2017: 80%). SThree remains in a strong financial position. Net debt at 28 February 2018 was circa £2m (28 February 2017: £1m). The Group has a £50m revolving credit facility ("RCF") with HSBC and Citibank, which is committed to May 2019.
*at constant currency
SThree is hosting an analyst conference call today at 0830 GMT. The details are as follows:
Telephone number: +44 (0) 20 3003 2666
For access to the call please quote passcode SThree
A replay facility will be available for seven days on +44 (0) 208 196 1998 Passcode: 5497258#
The Group will issue its trading update for the six months ended 31 May 2018 on 15 June 2018.
- Ends -
Notes to editors
SThree is a leading international specialist staffing 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 and communications technology ('ICT') sector the Group has broadened the base of its operations to include businesses serving the Banking & Finance, Energy, Engineering and Life Sciences sectors.
Since launching its original business, Computer Futures, in 1986, the Group has adopted a multi-brand strategy, establishing new operations to address growth opportunities. SThree brands include Computer Futures, Huxley Associates, Progressive and The Real Staffing Group. The Group has circa 2,800 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. Certain data from the announcement is sourced from unaudited internal management information and is before any exceptional items. Accordingly, undue reliance should not be placed on forward looking statements.
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| ISIN: | GB00B0KM9T71 |
| Category Code: | QRF |
| TIDM: | STHR |
| LEI Code: | 2138003NEBX5VRP3EX50 |
| Sequence No.: | 5307 |
| End of Announcement | EQS News Service |