12th Sep 2014 07:35
LONDON (Alliance News) - SThree PLC Friday said gross profit and contract gross profit both increased in the third quarter and expressed its confidence for the medium-term as it said its yearly earnings are traditionally weighted to the fourth quarter, though added that it would book a one-off cost from the restructuring of its operations in 2014.
The staffing business said its group gross profit in the three months to August 31 rose 18% to GBP55.1 million, up from GBP49.8 million a year earlier. Contract placement profit was up 28% to GBP34.1 million from GBP27.9 million the previous year, but permanent placement profit was down to GBP21 million in the period from GBP21.9 million last year.
The growth in profit for the contract division means this now accounts for 62% of total group profit, SThree said.
The group said its performance in the Americas was strong, with gross profit rising 75% year-on-year and now representing 17% of its gross profit by region. Elsewhere, the group's energy and life sciences staffing divisions increased gross profit by 43% apiece on a constant currency basis.
The company's sales headcount at the end of the quarter was up 9% against the end of the previous financial year and up 15% on the third quarter of 2013.
SThree said it will take an exceptional charge of GBP3 to GBP4 million this year, however, following a restructuring of its operations towards the US. The group has doubled its office space in New York, Boston, Houston and San Francisco in the period.
The restructuring also involved the company closing offices in India and Brazil, as well as a shake-up of its teams in Benelux and Switzerland.
"Against a backdrop of a continued improvement in macroeconomic conditions in a number of our markets, we have had an encouraging third quarter," said SThree Chief Executive Gary Elden.
"The fourth quarter is traditionally our most significant trading period and this will be accentuated in the current year by the pattern of headcount investment. Looking further ahead, the strength of our contract book and improving pre-deal trends for permanent give us confidence for the business in the medium term, Elden added.
SThree shares were trading 0.29% higher at 341.00 pence per share shortly after the market open Friday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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