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SThree gross profit up 10% in constant currency amid international growth

June 14, 2019

Staffing firm SThree plc reported net fees, or gross profit, rose 10% on a constant currency basis in the first half of its fiscal year ended May 31. The London-based firm focuses on recruitment in the science, technology, engineering and mathematics fields. The first-half gross profit growth all came in contract staffing; gross profit fell 1% in permanent placement. The growth was also centered in the firm’s overseas operations.

“The structural market drivers for STEM recruitment services remain very attractive, and we continue to invest in high-performing teams to driver growth,” Chief Executive Mark Dorman said in a statement.

Gross profit

(£ millions) H1 2019 H1 2018 % change (constant currency) H1 2019 (US$ millions)
Contract £121.1 £106.7 12% £153
Permanent £41.9 £41.7 -1% £53
Total for company £163.0 £148.4 9% £206

By geography, gross profit growth came from outside the UK with gross profit up 13% in the US, up 13% in continental Europe and up 13% as well in Asia Pacific and the Middle East. UK and Ireland gross profit fell 9%.

Gross profit by geography

(£ millions) H1 2019 H1 2018 % change (constant currency) H1 2019 (US$ millions)
Continental Europe £93.9 £83.9 13% $118
US  £35.5 £29.5 13% $45
UK and Ireland £23.8 £26.5 -9% $30
Asia Pacific and Middle East £9.8 £8.5 13% $12

SThree noted permanent placement gross profit in the US fell 10% on a constant currency basis, reflecting leadership and strategic changes made in the first half of the 2018 fiscal year.

By industry, energy showed the strongest growth in gross profit, while it fell in banking and finance.

Gross profit by industry

(£ millions) H1 2019 H1 2018 % change (constant currency) H1 2019 (US$ millions)
Information and Communication Technology £73.1 £66.5 11% $92
Life Sciences £31.5 £30.6 6% $40
Banking and Finance £18.8 £20.1 -9% $24
Energy £18.4 £14.0 27% $23
Engineering £16.3 £14.3 14% $21
Other £4.9 £2.9 4% $6

Share price and market cap

Shares in SThree closed up 4.16% to £288.00 in London on Friday; the company had a market cap of £362.09 million, according to FT.com.

SThree is not related to Detroit-based Strategic Staffing Solutions (S3).

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