Strong international performance boosts SThree profit
By Michele Maatouk
Date: Friday 14 Jun 2019
(Sharecast News) - Recruiter SThree posted a 9% jump in first-half gross profit on Friday as a solid performance from its international business offset weakness in the UK and Ireland.
In the half year to the end of May 2019, group gross profit rose to £163m from £148.4m in the first half of 2018, as profit in Continental Europe pushed up 13% to £93.9m. This helped to offset a 9% drop in the UK and Ireland to £23.8m.
SThree said growth in Continental Europe was driven by Germany, Austria and Switzerland.
In the USA, net fees were up 13% to £35.5m, while Asia Pacific and the Middle East also saw a 13% increase, to £9.8m.
Net fees grew 12% to £121.1m in the contract segment, while the permanent division saw a 1% decline to £41.9m on the back of a UK restructuring.
Chief executive Mark Dorman said: "We are particularly pleased to report double digit growth in net fees across three of our four regions and have plans in place to drive growth across them all."
He added that following the "encouraging" start to the year, expectations for the full year remain unchanged.
Broker Liberum reiterated its 'buy' rating and 450p price target on the stock after the update.
"Whilst the UK performance was weaker, the strength in the group's core STEM (science, technology, engineering and mathematics) markets suggests that the outlook for FY19 remains encouraging. We continue to see SThree as well positioned to capitalise on long term trends within the professional recruitment space, given its contract bias and geographic exposures."
At 0815 BST, the shares were up 3.6% at 286.45p.
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