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View All NewsSThree gross profit rises 4% in Q2 with biggest increase in US
SThree plc, a specialist recruitment firm that ranks among the largest global recruitment firms, reported gross profit rose 4% on a constant currency basis in the second quarter of its fiscal year ended May 31. The company’s US-based operations posted the biggest increase in gross profit, up 20% in constant currency in the second quarter, among all its regions. However, gross profit in the firm’s UK operations fell 14% in constant currency during the quarter.
“Looking ahead, the continued momentum of our contract business and improved permanent yields give us a solid base from which to grow in a macroeconomic environment which remains uncertain,” Chief Executive Gary Elden said.
The UK-based firm reported contract staffing gross margin rose 9% in the second quarter while permanent placement gross profit fell 6%. The company reported growth in contract staffing across all regions, but the strongest was in the US and continental Europe. It also noted in permanent placement, average sales headcount was down 17% in the first half of the year.
Looking at industry sectors, the sharpest increase in gross profit took place in the energy sector, where gross profit rose 23% on a constant currency basis. SThree’s largest sector served, information and communication technology, saw a 1% increase in gross profit on a constant currency basis.
| Gross profit | H1 2017 | H1 2016 | % change in constant currency | H1 2017 (in US$) | ||
| H1 2017 | Q2 2017 | Q1 2017 | ||||
| Contract | £94.2 | £79.7 | 8% | 9% | 7% | $120.95 |
| Permanent | £40.1 | £40.1 | -10% | -6% | -14% | $51.49 |
| Total | £134.3 | £119.8 | 2% | 4% | - | $172.43 |
| Geography | ||||||
| UK and Ireland | £27.0 | £32.1 | -16% | -14% | -19% | $34.67 |
| Continental Europe | £69.0 | £57.9 | 7% | 7% | 7% | $88.59 |
| US | £29.7 | £22.1 | 16% | 20% | 12% | $38.13 |
| Asia Pacific and Middle East | £8.6 | £7.7 | -4% | 5% | -14% | $11.04 |
| Total | £134.3 | £119.8 | 2% | 4% | - | $172.43 |
| Sector | ||||||
| Information and Communication Technology | £59.7 | £54.2 | 1% | 1% | 2% | $76.65 |
| Banking and Finance | £20.5 | £19.5 | -5% | -1% | -8% | $26.32 |
| Energy | £11.3 | £9.4 | 7% | 23% | -8% | $14.51 |
| Engineering | £11.8 | £10.7 | 1% | 3% | -1% | $15.15 |
| Life Sciences | £28.8 | £24.1 | 6% | 7% | 4% | $36.98 |
| Other | £2.2 | £1.9 | 9% | 13% | 4% | $2.82 |
| Total | £134.3 | £119.8 | 2% | 4% | - | $172.43 |
| Contract/Perm Split | ||||||
| Contract/Perm Split | 134% | 67% | ||||
| Permanent | 30% | 33% | ||||
| Geographical Split | ||||||
| UK and Ireland | 20% | 27% | ||||
| Continental Europe | 51% | 48% | ||||
| US | 22% | 19% | ||||
| Asia Pacific and Middle East | 7% | 6% | ||||
| Sector split | ||||||
| Information and Communication Technology | 44% | 45% | ||||
| Banking and Finance | 15% | 16% | ||||
| Energy | 9% | 8% | ||||
| Engineering | 9% | 9% | ||||
| Life Sciences | 21% | 20% | ||||
| Other | 2% | 2% | ||||
Shares in SThree plc closed up 2.14% to £310.00. The company had a market cap of £399.0 million.