News Column

SThree Improved Second Quarter Boosts First Half Gross Profit

June 13, 2014

Hana Stewart-Smith

LONDON (Alliance News) - SThree PLC said in a trading statement Friday that its performance had improved during its second quarter, boosted by economic recovery in a number of its markets, resulting in a 13% rise in gross profit at constant currency in the half year to June 1.

At actual currency levels, gross profit rose 10% in the half to GBP100.9M from GBP91.6M in the same period a year earlier.

The recruitment company said it had increased its sales headcount by 20% compared to the previous year, as it sought to make sure that its contracted worked base had adequate resources to keep up with accelerating growth, and it continued to rebuild its permanent worker base.

As a result of its investment in headcount the company said it would carry additional costs for the remainder of the year as the new hires become fully productive.

SThree saw gross profit from contracted workers rise to GBP60.8 million in the half from GBP50.6 million a year earlier, as it increased its exposure to high growth markets including Energy and Life Sciences. It saw particularly strong growth in the Americas and as a result is doubling its office space in San Francisco and Houston.

Gross profit from permanent workers was up 2% on a constant currency basis compared to the previous year, and it saw improvement in its permanent pre-deal pipeline. However SThree said that further work would be needed to return the permanent business to levels it had seen in the past.

At actual currency levels, gross profit from permanent workers declined slightly to GBP40.1 million in the first half from GBP41.0 million a year earlier.

In the second half the company said will focus on driving up the productivity of its new hires, particularly in the permanent business, although its headcount growth will ease somewhat.

"While, as always, we remain cautious about extrapolating the trend for the year from the seasonally less significant first half, the strength of our Contract book and the slowly improving outlook for Permanent underpins our confidence in the medium term prospects for the business," said Chief Executive Gary Elden in a statement.

Shares in SThree are down 0.6% Friday morning at 392.00 pence.

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Source: Alliance News

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