SThree: FY19 Trading Update (934103)
12 December 2019 - 6:00PM
UK Regulatory
SThree (STHR)
SThree: FY19 Trading Update
12-Dec-2019 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
12 December 2019
SThree plc
FY19 Trading Update
Strong performance driving record adjusted profit before tax
SThree plc ("SThree" or the "Group"), the global pure-play specialist
staffing business focused on roles in Science, Technology, Engineering and
Mathematics ('STEM'), is pleased to issue a trading update(1) for the
financial year ended 30 November 2019.
Highlights
· Net fees for the full year grew by 5%
· Strong growth in USA, Continental Europe and APAC & MENA
· Robust growth across Technology, Life Sciences, Engineering and Energy
· 86% of Group net fees generated from international(2) markets (2018:
83%)
· Strong growth in Contract net fees up 8%, in line with our strategy,
now representing 74% of Group net fees (2018: 72%)
· Permanent net fees down 3%
· Adjusted profit before tax for the year expected to be in line with
market consensus(3) and an all-time record for the Group
· Net cash of GBP11m at 30 November 2019, ahead of market consensus
Mark Dorman, Chief Executive, commented:
"As the only global, pure-play STEM specialist, SThree has continued to
deliver year-on-year growth materially ahead of the wider market. This is
driven by our robust performance across all of our international regions,
which constitute the majority of the Group, and supportive long-term market
dynamics with the well documented growth in both STEM and flexible working
(Contract), giving us confidence in our delivery. Our deliberate focus on
Contract, a natural function of our STEM specialism, continues to be a
strong driver of Group performance and remains a key strategic priority for
the Group.
"Looking ahead is difficult at the best of times and even more so now, given
the significant macro market and political uncertainties. Notwithstanding
this, I am pleased that in our key growth markets, the new financial year
has started well with good demand, and this gives us confidence that we will
continue to outperform materially in our international markets.(4)
"Our business north star is our purpose: bringing skilled people together to
build the future, and we remain committed to our vision of being the number
one STEM talent provider in the best STEM markets. We are confident that we
are in the right STEM markets; with the size of the opportunity ahead of us
and with our scalable operational capabilities globally, we are confident in
our ability to deliver growth. Whilst we remain cognisant of the macro
uncertainties, we remain confident that we have the right vision, niche
focus, platform and teams to outperform as we are uniquely positioned as the
only global pure-play STEM specialist."
Financial
Highlights
FY 2019 Q4 2019 Q3 Q2 Q1
2019 2019 2019
Net Fees FY 2019 FY 2018 YoY % YoY % YoY YoY YoY
% % %
Contract GBP254.4m GBP232.1m +8% +3% +7% +13% +12%
Permanent GBP87.8m GBP89.0m -3% -4% -5% -2% +1%
Group GBP342.2m GBP321.1m +5% +1% +4% +9% +9%
Continental GBP196.7m GBP183.4m +8% +1% +5% +14% +12%
Europe
USA GBP76.7m GBP66.6m +9% +6% +5% +10% +17%
UK&I GBP48.1m GBP53.1m -9% -11% -7% -12% -7%
Asia Pac & GBP20.7m GBP18.0m +12% +8% +14% +20% +5%
Middle East
Group GBP342.2m GBP321.1m +5% +1% +4% +9% +9%
Technology GBP152.6m GBP142.0m +7% +1% +8% +12% +10%
Life GBP67.8m GBP63.1m +5% +6% +2% +8% +3%
Sciences
Banking & GBP37.9m GBP42.5m -13% -20% -12% -13% -3%
Finance
Energy GBP39.1m GBP33.4m +16% +6% +8% +29% +25%
Engineering GBP34.8m GBP30.6m +11% +13% +6% +9% +19%
Other(5) GBP10.0m GBP9.5m +3% -3% +5% -3% +11%
Group GBP342.2m GBP321.1m +5% +1% +4% +9% +9%
Business performance
Group net fees for the year were up 5% with growth across all our
international markets, up 8%. We have made management changes in the UK&I in
Q4 to positively impact performance, against a challenging macro-economic
and political backdrop.
Contract net fees were up 8%, with growth across all sectors apart from
Banking & Finance. Contract growth was driven by Continental Europe, which
was up 11% largely due to Technology and the USA up 17% driven by Energy and
Life Sciences. Continental Europe and USA combined now represent 81% of our
Contract net fees (2018: 78%).
Permanent net fees, which represent 26% of the business, were down 3% for
the year. Our largest Permanent market, DACH(6), saw good growth of 5%, with
Continental Europe remaining flat. APAC & MENA saw growth of 16% driven by
excellent performance in Japan. Net fees in the USA were down 11% year on
year, reflecting previously reported leadership and strategic changes made
in 2018 and the UK&I was down 18%.
Group period end sales headcount was up 6%, with Contract up 7%, in line
with the Group's strategy, and Permanent up 2%. Contract represented 70% of
total sales headcount at the period end. Sequentially vs Q3, period end
Group sales headcount was up 1%. Average Group sales headcount for the year
was up 7% with Continental Europe up 8% and USA up 11%.
Balance sheet
SThree remains in a strong financial position, with net cash at 30 November
2019 of circa GBP11m (30 November 2018: Net debt GBP4m). The Group has a GBP50m
revolving credit facility ("RCF") with HSBC and Citibank, which is committed
to 2023.
Analyst conference call
SThree is hosting an analyst conference call today at 0830 GMT. The details
are as follows:
Telephone number: 0800 358 9473
For access to the call please enter PIN: 23994224#
A replay facility will be available for 90 days on 0800 358 2049 Passcode:
301306355#
The Group will issue its results for the financial year ended 30 November
2019 on 27 January 2020
(1) All year-on-year financial growth rates in this announcement are
expressed at constant currency
(2) International represents our businesses outside the UK and Ireland
(3) Market expectations for adjusted profit before tax for the year ended 30
November 2019 are in the range of GBP56.0m to GBP60.9m, with a consensus of
GBP58.5m
(4) Staffing Industry Analysts market forecasts for 2019
(5) Other includes Procurement & Supply Chain and Sales & Marketing
(6) DACH - Germany, Austria and Switzerland
- Ends -
Enquiries:
SThree plc 020 7268 6000
Mark Dorman, Chief Executive Officer
Alex Smith, Chief Financial Officer
Steve Hornbuckle, Company Secretary
Alma PR 020 3405 0205
Rebecca Sanders-Hewett SThree@almapr.co.uk
Hilary Buchanan
Notes to editors
SThree is a leading international STEM specialist staffing business,
providing permanent and contract specialist staff to a diverse client base
of over 9,000 clients.
The Group's operations cover the Technology, Banking & Finance, Energy,
Engineering and Life Sciences sectors. With a multi-brand strategy, the
Group establishes new operations to address growth opportunities. SThree
brands include Computer Futures, Huxley Associates, Progressive and The Real
Staffing Group. The Group has a network of 47 offices in 16 countries, of
which 40 are in our international(2) markets, with circa 3,200 employees.
SThree plc is quoted on the Official List of the UK Listing Authority under
the ticker symbol STEM and also has a US level one ADR facility, symbol
SERTY.
Important notice
Certain statements in this announcement are forward looking statements. By
their nature, forward looking statements involve a number of risks,
uncertainties or assumptions that could cause actual results or events to
differ materially from those expressed or implied by those statements.
Forward looking statements regarding past trends or activities should not be
taken as representation that such trends or activities will continue in the
future. Certain data from the announcement is sourced from unaudited
internal management information and is before any exceptional items.
Accordingly, undue reliance should not be placed on forward looking
statements.
ISIN: GB00B0KM9T71
Category Code: TST
TIDM: STHR
LEI Code: 2138003NEBX5VRP3EX50
Sequence No.: 34924
EQS News ID: 934103
End of Announcement EQS News Service
(END) Dow Jones Newswires
December 12, 2019 02:00 ET (07:00 GMT)
Sthree (LSE:STEM)
Historical Stock Chart
From Apr 2024 to May 2024
Sthree (LSE:STEM)
Historical Stock Chart
From May 2023 to May 2024