Q3 Trading Update
September 15 2017 - 1:03AM
UK Regulatory
Dow Jones received a payment from EQS/DGAP to publish this press
release.
SThree (STHR)
Q3 Trading Update
15-Sep-2017 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
15 September 2017
Q3 Trading Update
SThree plc ("SThree" or the "Group"), the international specialist STEM
staffing business, is today issuing a trading update covering the period
from 1 June 2017 to date; financial information relates to the quarter ended
31 August 2017.
Highlights
· Group gross profit ("GP") up 5%* YoY in Q3, with sustained momentum from
Q2 when Group GP grew by 4%*
· Solid growth across Engineering up 5%* YoY, Life Sciences up 3%* and
Global Energy up 35%*
· Strong growth in USA up 20%* YoY
· Robust performance in Continental Europe up 6% YoY
· UK&I remains challenging down 10%* YoY, in line with management
expectations
· Contract GP up 9%* YoY, with strong growth across Engineering up 10%*,
Life Sciences up 13%* and Energy up 37%*
· Permanent GP down 6%* YoY, broadly in line with average sales headcount
down 7%
· 80% of Group GP generated outside the UK&I (2016: 76%)
· Group period-end sales headcount up 3% on the 2016 year-end position,
and up 4% YoY
· Full year 2017 adjusted profit before tax expected to be ahead of
current consensus+
+ Consensus for the year ended 30 November 2017 is GBP42.4m, with a range of
GBP39.3m to GBP45.6m
Gary Elden, Chief Executive, commented: "We are pleased with our sustained
momentum in the period, with gross profit showing a sequential increase over
Q2. A robust performance in Continental Europe and further strong growth in
the USA were particular highlights and our Contract business is continuing
to drive growth across the Group.
"We are well-positioned for the final quarter and now expect to deliver a
full year result ahead of current consensus."
Financial Highlights -
Group Gross Profit
Q3 2017 Q2 2017 Q1 2017
Gross Profit Q3 2017 Q3 2016 YoY % 1 YoY % 1 YoY % 1
Contract GBP53.1m GBP45.4m +9% +9% +7%
Permanent GBP20.6m GBP20.6m -6% -6% -14%
Group GBP73.7m GBP66.0m +5% +4% -
UK&I GBP14.5m GBP15.8m -10% -14% -19%
Continental Europe GBP37.9m GBP32.9m +6% +7% +7%
USA GBP17.3m GBP13.5m +20% +20% +12%
Asia Pac & Middle GBP4.0m GBP3.8m +1% +5% -14%
East
Group GBP73.7m GBP66.0m +5% +4% -
ICT GBP31.6m GBP29.3m +1% +1% +2%
Banking & Finance GBP11.3m GBP10.5m +1% -1% -8%
Energy GBP7.1m GBP4.8m +35% +23% -8%
Engineering GBP6.9m GBP6.2m +5% +3% -1%
Life Sciences GBP15.6m GBP14.3m +3% +7% +4%
Other Sectors 3 GBP1.2m GBP0.9m +24% +13% +4%
Group GBP73.7m GBP66.0m +5% +4% -
Contract / Perm Split
Contract 72% 69%
Permanent 28% 31%
100% 100%
Geographical Split
UK&I 20% 24%
Continental Europe 52% 50%
USA 23% 20%
Asia Pac & Middle 5% 6%
East
100% 100%
Sector Split
ICT 43% 44%
Banking & Finance 15% 16%
Energy 10% 7%
Engineering 9% 10%
Life Science 21% 22%
Other Sectors 3 2% 1%
100% 100%
Q3 2017 Q2 2017 Q1 2017
Operating Metrics Q3 2017 Q3 2016 YoY % YoY % YoY %
Contract Runners 2
UK&I 2,512 2,693 -7% -6% -8%
Continental Europe 4,925 4,174 +18% +19% +19%
USA 1,631 1,316 +24% +23% +14%
Asia Pac & Middle 489 411 +19% +25% +19%
East
Group 9,557 8,594 +11% +12% +9%
1 At constant currency
2 Period-end number of contractors onsite with clients
3 Other Sectors includes Procurement & Supply Chain and
Sales & Marketing
Group gross profit ("GP") was up 5%* YoY and up 5%* sequentially vs Q2, with
Q2 having been up 4%* YoY after a flat performance in Q1. USA GP was ahead
by 20%* YoY in the quarter, another strong performance after being up 20%*
in Q2. Continental Europe posted a robust performance in the quarter up 6%*
YoY. Sales headcount for the Group was up 4% YoY and 3% ahead of the 2016
year end position.
Contract continues to perform strongly, up 9%* YoY with a large proportion
of the growth in the quarter from Continental Europe up 12%* and USA up
24%*, offset by a decline in the UK&I, down 10%*. On a sector basis, the
Group maintained strong growth in Engineering up 10%* YoY and Life Sciences
up 13%*. We continued to prioritise growth in Contract sales headcount, with
an average increase in the quarter of 8% YoY.
Permanent GP was down 6%* YoY, broadly in line with average sales headcount
down 7% YoY. In the quarter, Permanent GP in UK&I declined by 12%* YoY,
Continental Europe declined by 9%*, offset by a strong performance in USA,
up 12%*.
Average Group sales heads were up 2% YoY. UK&I sales headcount was down 9%
YoY, Continental Europe was up 13%, USA was down 3% and Asia Pacific &
Middle East was down 15%. Contract sales headcount represented 65% of total
sales headcount at the end of the quarter (2016: 62%).
The Group has a network of 39 offices in 16 countries, of which 32 are
outside the UK. The Group generated 80% of Gross Profit for the period from
markets outside the UK&I (2016: 76%).
SThree remains in a strong financial position. Net debt at 31 August 2017
was circa GBP8m (31 August 2016: GBP14m). The Group has a GBP50m revolving credit
facility ("RCF") with Citibank and HSBC, which is committed to 2019.
* at constant currency
SThree is hosting an analyst conference call today at 0830 BST. 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) 20 8196 1998
followed by 1582104#
The Group will be hosting a Capital Markets Day in London on the afternoon
of 15 November 2017.
The Group will issue a trading update for the year ended 30 November 2017 on
15 December 2017.
- Ends -
Enquiries:
SThree plc 020 7268 6000
Gary Elden, Chief Executive Officer
Alex Smith, Chief Financial Officer
Sarah Anderson, Deputy Company Secretary/IR
Enquiries
Citigate Dewe Rogerson 020 7638 9571
Kevin Smith/Jos Bieneman
Notes to editors
SThree is a leading international specialist staffing business, providing
permanent and contract specialist staff to a diverse client base of over
7,000 clients. From its well-established position as a major player in the
information and communications technology ('ICT') sector the Group has
broadened the base of its operations to include businesses serving the
Banking & Finance, Energy, Engineering and Life Sciences sectors.
Since launching its original business, Computer Futures, in 1986, the Group
has adopted a multi-brand strategy, establishing new operations to address
growth opportunities. SThree brands include Computer Futures, Huxley
Associates, Progressive and The Real Staffing Group. The Group has circa
2,700 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.
ISIN: GB00B0KM9T71
Category Code: TST
TIDM: STHR
LEI Code: 2138003NEBX5VRP3EX50
Sequence No.: 4635
End of Announcement EQS News Service
609909 15-Sep-2017
(END) Dow Jones Newswires
September 15, 2017 02:03 ET (06:03 GMT)
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