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SThree revenue rises 7%; gross profit up except in UK

July 24, 2017

SThree plc (STHR: LSE), a London-based staffing provider, reported revenue rose 7% in constant currency and gross profit rose 2% in the first half of the year.

(£ millions) H1 2017 H1 2016 % growth % growth constant currency H1 2017 (USD millions)
Revenue £521.0 £443.5 17% 7% $675.7
Gross profit £134.4 £119.8 12%   $174.3
Gross margin 25.8% 27.0%      
Profit before taxation £19.2 £12.8 27% 5% $24.9

The company reported gross profit rose 16% in its US operations on a constant currency basis in the first half and was up 7% in continental Europe. However, UK and Ireland gross profit fell 16%; the company cited Brexit, the recent general election and public sector reforms as creating headwinds during the first half.

Among sectors served, gross profit in the energy sector showed the strongest growth in the first half; it was up 7% on a constant currency basis. Life sciences gross profit rose 6% in constant currency, and information and communication technology rose 1%. However, first-half gross profit fell 5% in banking and finance.

QUOTE

“We are encouraged by our first half performance, with a step up in growth achieved in Q2 against a background of mixed trading conditions,” CEO Gary Elden said. “The growing breadth and scale of our international operations, which now account for four fifths of gross profit, underline how far the group has grown from its UK roots, with particularly strong performances in Continental Europe and the USA, which is now our second largest region.”

Shares in SThree closed up 4.23% at £297.06, and the company had a market cap of £381.55 million, according to Google.