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UK – SThree drives gross profit in Q3

07 September 2012

The international staffing firm SThree (LSE:STHR) increased gross profit by +6% (at constant currency) to £51.3 million in the three months to August. This was driven by both contract and permanent recruitment and strong demand seen in sectors including energy and pharmaceuticals, the firm reported on Friday.

Contract recruitment saw a +10% rise in gross profit to £25.6 million, making up half of the total gross profit achieved in the period. Despite the economic turmoil in Europe, the firm saw strong growth in the region where gross profit was up +12%. In the Rest of World, gross profit generated from contract recruitment rose +94%, offsetting a -2% decline seen in the UK.

Gross profit from permanent recruitment was up +2% to £25.6 million with average permanent placement fees growing in the quarter.

During the quarter, the company cut back on staff with headcount levels falling by -6% when compared to the same period last year. 

“The Group has traded satisfactorily in the third quarter, given the difficult macro economic backdrop,” said chief executive Russell Clements who will retire next year.

“Understandably, this was reflected in a slowing of the rate of growth in gross profit in Q3 versus Q2 but nonetheless gross profit in Q3 was 6% ahead of the same period last year.”

Demand for contract staff in the quarter was high and this division performed “more resiliently than permanent in the more uncertain economic environment,” he said. “Given that contract makes up half of the Group's business, this positions us well to optimise our performance against current market conditions, as does the fact that 65% of the business is generated outside of the UK  and Ireland.”

In July, the staffing company reported a boost in half-year revenue but a slide in profits. The firm comes in 39th place in Staffing Industry Analysts’  ranking of the largest global staffing firms.  

SThree provides permanent and contract staff, specialising in information and communication technology sectors while business operations also include banking, engineering & energy, pharmaceuticals & biotechnology, and accountancy.

In early trading this morning, the company’s share price was up +1.3% to 275.0 pence, a +14.5% increase from a year ago and -20.9% below its 52-week high of 347.75 pence seen in May 2012. SThree has a market value of £328.20 million. 

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