With the share price now 195p
Company expanding
�40m debt paid as of 30 Nov
Starting a share buy back

This was published: 24 July 2007 The Independent on Sunday
Edited by Andrew Dewson

SThree

Our view: Buy

Current price: 488.75p

Despite being perhaps the least well known name in recruitment among the mid caps, SThree has kept up the pace with higher profile rivals Robert Walters and Michael Page.

Its shares have risen by more than 125 per cent since listing in late 2005 and if yesterday's interim results are anything to go by there looks to be more upside left.

Although the company has invested heavily in the last 12 months on headcount, information technology systems and new offices, first half pre-tax profits still rose by an impressive 32 per cent to �19.2m, and would have been 54 per cent better had it not been for the investment programme.

SThree provides staff across a wide range of sectors, providing temporary and permanent placements in computing, engineering, telecoms, human resources and pharmaceuticals, even if 80 per cent of its business is still in IT.

It operates out of 48 offices in seven countries and there is scope for more expansion in emerging and developed economies. New offices were opened in Rotterdam and Brussels in the first half and Hong Kong and Dubai will open in the second half.

SThree has moved away from more cyclical temporary recruitment and now makes exactly 50 per cent of its profits from permanent placements. Trading on under 15 times forecast 2008 earnings, SThree is on a discount to its two main UK peers and the recruitment industry looks to be in excellent health. Yesterday's bout of profit taking represents a good buying opportunity.

SThree suffers decline in demand
Business Financial Newswire


Specialist staffing business SThree said as expected, it experienced an overall decline in demand for its services during the first-half, particularly for permanent placements, with contract hiring proving somewhat more resilient in all territories.

For the six month period ended 31st May 2009, group gross profit declined by around 9% year on year to 93m (2008: 102.5m). On a constant currency basis, gross profit declined by around 15% and non-UK gross profit grew about 4% year on year.

At 31st May 2009 SThree had 4,494 contract runners, a decrease of 21.8% on the year end number of 5,745 runners. Average contractor gross profit per day rates were up overall with continued strength in non-UK rates offset in part by a slight softening in rates in the UK ICT business. During the period, SThree made a total of 3,302 permanent placements, a reduction of 34.1% over the previous year (2008: 5,008). However, average permanent placement fees have continued to improve across all geographies versus last year.

At 31st May 2009 UK contract runners were down 28.2% versus the prior year. However the UK gross profit per day contract rate was down only slightly versus the previous year. During the period, UK permanent placements were down 54.2%, reflecting a 60.8% reduction in UK ICT placements and a 37.8% reduction in UK non-ICT placements. Average UK placement fees were up slightly versus last year.

The non-UK business slowed further in the period. Contract runners reduced versus last year by 7.4%, but this was offset by growth in gross profit per day rates. During the period, permanent placements declined by 7.5%, but again this was offset by strong growth in average fees.

The cash position improved further during the period with net cash of about 45m at 31st May 2009. The Group has no debt.

Total headcount over the period was reduced by circa 25%, with UK sales headcount being down by circa 33% and non UK sales headcount down by circa 17%. The group believes that headcount is now at an appropriate level in light of the current market conditions and opportunities.

This action resulted in exceptional costs of circa 8m, comprising staff restructuring costs and the costs of an office network rationalisation. We expect pay back on these measures within the current financial year ending 29th November 2009.

CEO, Russell Clements, commented: 'The first half of 2009 has seen exceptionally challenging market conditions. By contrast, during the same period in 2008, all of our markets were still growing, making the year on year comparatives particularly tough.

'In response to the difficult trading environment we took decisive and proactive action during the second quarter to realign our headcount with prevailing market conditions and ensure that the business stayed fit for purpose in the short term. However we are equally committed to ensuring that we do not compromise the Group's capacity for a strong bounce back as markets recover.

'In this respect our exceptionally strong cash position gives us the capacity to make prudent investments for the future, whilst at the same time continuing to support our dividend.'

SThree will be announcing its interim results for the six months ended 31st May 2009 on 20th July 2009.

No updates since July - but share price has recovered well - any followers?

Interim statement seems to have gone down well.

Trading Update


SThree plc ("SThree" or the "Group"), the international specialist staffing
business, is today issuing a trading update for the year ended 29 November 2009.


* A solid performance despite highly challenging market conditions
* Full year results expected to be in line with consensus market expectations
* Gross profit of circa GBP168m, down 23% year on year (2008: GBP218.9m)
* Greater geographical diversification, with non-UK share of gross profit now at
55% (2008: 45%)
* Year end net cash of circa GBP48m (2008: GBP24.6m)
* Days sales outstanding improved to 37 days (2008: 43 days)
* Most markets stable or modestly improving

Up 3% on a down day - I can't find anything obvious news wise, but hey ho!

Another 4% today!

Looks like I'm alone here - been adding over the last couple of weeks - Preliminary results out on 1st Feb.

Happy new year skinny.doing well

Preliminary results.

Interim Management Statement.

I've just taken some of these off the table @325 - rude not to!

3% today.

Keeping the belief and playing long. Benefits from internal re-organisation are showing through

Nice big candle today - trading statement on the 4th I believe.

Trading Update.

Key highlights:

Group Gross Profit up 8%* Q2 2010 vs Q1 2010, consistent with markets showing continuing signs of improvement

Headcount growth of 7.9% year on year, driven by market opportunity

Fees remain robust

Roll out of four additional international offices

Non-UK now circa 60% of Group gross profit

Non-ICT now circa 34% of Group gross profit


Group gross profit achieved in the period declined by circa 19%* year on year to circa 74m (2009: 93.3m). UK gross profit declined by circa 29% and non-UK gross profit declined by circa 11%*. Non-UK now represents 60% of gross profit (2009: 54%), non-ICT represents 34% of gross profit (2009: 25%).

Unemployment is rising under Osborne budget, so STHR is a strong sell.

Interim Management Statement.

Highlights:



All markets now improving and in growth, with the exception of Benelux which is nonetheless on an improving trend

Permanent Gross Profit up 36%* year on year and up 18%* on Q2 2010

Contract Gross Profit up 1%* year on year and up 8%* on Q2 2010

Group Gross Profit up 15%* year on year and up 13%* on Q2 2010

Sales headcount growth of 25% year on year, driven by improving market

opportunity and additional international office openings

Permanent deal pipeline up circa 50% year on year

Cash position remains strong with circa 37m net cash at period end

Trading Statement.

Highlights:



All markets now improving and in growth

Full year results expected to be slightly ahead of market consensus

Group Gross Profit of circa 167m, down 2% year on year (2009: 171.1m)

Permanent Gross Profit up 15%* year on year for the full year and up 53%* year on year in Q4

Contract Gross Profit down 12%* year on year for the full year, but up 4%* year on year in Q4

Greater geographical diversification, with non-UK share of gross profit now at 60% (2009: 55%) and 6 new overseas offices opened during the year

Year end net cash of circa 53m (2009: 48.5m)

Interim Management Statement.

Highlights:

· Group gross profit up 15%* year on year (up 12%* in Q4 2011)
· Permanent gross profit up 16%* year on year (up 14%* in Q4 2011)
· Contract gross profit up 13%* year on year (up 9%* in Q4 2011)
· Permanent deal pipeline volume up 11% year on year (up 1% at year end 2011)
· Seasonal recovery in contract runners tracking broadly in line with 2011
· Strong financial position with net cash of circa £30m at period end after payment of interim and special dividend of c£20m in early December 2011

Statement going down well.