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View All NewsUK – SThree net fees up 3% in fiscal Q4 but fall in UK and Ireland
SThree plc (STEM: LSE) reported net fees rose 3% year over year in its fiscal fourth quarter ended 30 November 2019. The London-based staffing provider reported net fees rose across most business lines and geographies in the fourth quarter with the exception of the UK and Ireland. Net fees were up 5% for the full fiscal year.
| Net fees | FY 2019 (£m) | FY 2018 (£m) | FY 2019 % change | % change Q4 | % change Q3 | % change Q2 | % change Q1 |
| Contract | £254.4 | £232.1 | 8% | 3% | 7% | 13% | 12% |
| Permanent | £87.8 | £89.0 | -3% | -4% | -5% | -2% | 1% |
| Group | £342.2 | £321.1 | 5% | 1% | 4% | 9% | 9% |
Contract net fees rose 3% in the fourth quarter while permanent net fees fell 4%.
On a year-over-year basis, contract net fees were up 8% with growth across all sectors with the exception of banking and finance. Contract growth for the year was driven by Continental Europe, which was up 11% largely due to technology, and the US, which was up 17% driven by energy and life sciences.
Permanent net fees fell 3% for the full year. Permanent net fees rose in the Germany, Austria and Switzerland region by 5% in the fiscal year, but Continental Europe was otherwise flat. In addition, perm net fees in the US fell 11%; in the UK and Ireland perm fees fell 18% for the year. Perm net fees were up in Asia Pacific and the Middle East North Africa by 16%.
Looking at total net fees by geography, SThree reported growth across regions except for the UK and Ireland. The company informed of management changes in the UK and Ireland with the aim of boosting performance amid a challenging macro-economic and political backdrop.
Net fees by geography
| Net fees | FY 2019 (£m) | FY 2018 (£m) | FY 2019 % change | % change Q4 | % change Q3 | % change Q2 | % change Q1 |
| Continental Europe | £196.7 | £183.4 | 8% | 1% | 5% | 14% | 12% |
| US | £76.7 | £66.6 | 9% | 6% | 5% | 10% | 17% |
| UK and Ireland | £48.1 | £53.1 | -9% | -11% | -7% | -12% | -7% |
| Asia Pacific, Middle East | £20.7 | £18.0 | 12% | 8% | 14% | 20% | 5% |
| Group | £342.2 | £321.1 | 5% | 1% | 4% | 9% | 9% |
By segment, SThree reported net fees rose with the exception of banking and finance, which fell by 20% year over year in the fourth quarter and in “other” which fell by 3% in the fourth quarter. The company’s “other” segment includes “procurement and supply chain” as well as “sales and marketing.”
Net fees by segment
| Net fees | FY 2019 (£m) | FY 2018 (£m) | FY 2019 % change | % change Q4 | % change Q3 | % change Q2 | % change Q1 |
| Technology | £152.6 | £142.0 | 7% | 1% | 8% | 12% | 10% |
| Life sciences | £67.8 | £63.1 | 5% | 6% | 2% | 8% | 3% |
| Banking and finance | £37.9 | £42.5 | -13% | -20% | -12% | -13% | -3% |
| Energy | £39.1 | £33.4 | 16% | 6% | 8% | 29% | 25% |
| Engineering | £34.8 | £30.6 | 11% | 13% | 6% | 9% | 19% |
| Other | £10.0 | £9.5 | 3% | -3% | 5% | -3% | 11% |
| Group | £342.2 | £321.1 | 5% | 1% | 4% | 9% | 9% |
Share price and market cap
Shares in SThree closed down 3.18% at £335.00 on Thursday; the company had a market cap of £459.1 million.