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UK – Full year profits up at SThree

30 January 2012

SThree (STHREE:LSE), the international specialist staffing business, today reported its final results for the year ended 27 November 2011, announcing that full-year pre-tax profit grew +40% to £30.3 million from last year's £21.6 million, due to business expansion and investment in 2010 and early 2011.

Chief Executive Officer of SThree, Russell Clements, admitted that demand was lower than in the previous year, and that the firm started the year “against a backdrop of increased economic uncertainty.” However, he remains positive about future developments as   “market conditions remain in far better shape than those we saw in the aftermath of the global financial crisis. It is also true that just as sentiment can deteriorate very quickly, it can also move in a positive direction equally rapidly.” 

Revenue for the year grew by +14.3% to £542.5 million, compared with £474.5 million in the previous year.  

The firm’s gross profit was up +17.5% at £195.5 million, compared with £166.4 million in 2010, representing a gross profit margin of 36.0% (35.1% in 2010). As a result of the gross profit growing in H2 by +14.5% year-on-year to £105.5 million (2010 H2: £92.2 million), net trade debtors increased by £7.4 million to £70.5 million (2010: £63.1 million) representing a DSO of 36 days (2010: 37 days). 

At the end of 2011 net cash (including term investments) increased to £55.6 million, compared with £55.2 million in 2010, after the company bought back £7.6 million of shares and paying ordinary dividends of £14.5 million during the 2011 financial year. During the year, the Group also generated cash from operating activities of £36.4 million, compared with £31.8 million in 2010. Operating profit increased to £29.9 million from £21.2 million.

Administrative expenses increased by +14.1% to £165.6 million from £145.2 million in 2010, “as the Group scaled up its operations, hiring more heads and opening new offices. As a result, the Group's conversion ratio grew to 15.3%, compared to 12.8 % in the previous year. 

The firm increased its headcount by +22% with a total of 2,272 staff being in employment at the end of the year, compared with 1,863 employees in the previous year. “Sales headcount growth was primarily focused on Rest of World, up 72%, and Europe, up 35%. The UK was up 14% but still remains very substantially below its peak headcount and is, increasingly, contributing staff to other parts of our international network.” 

SThree is an international specialist staffing businesses, providing permanent and contract specialist staff to over 7,500 clients. The Group serves various sectors, including accountancy & finance, banking, engineering, oil & gas, pharmaceuticals, human resources, energy, legal and job board sectors. The Group has about 2,300 employees in 17 countries and has a current market capitalisation of £309 million.

In early trading, the company’s share price was up +1.3% at 261 Pence, 34% above the 52-week low of 194.60 set on 14 December 2011. 


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