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SThree points to "resilient" third quarter net fees performance

19th Sep 2023 10:27

(Alliance News) - SThree PLC on Tuesday said its performance in the third quarter of 2023 was "resilient" and that it is trading in line with market expectations for the full-year.

The London-based staffing company said movement in net fees for the third quarter was in line with the second quarter and down 7% to GBP103.0 million from GBP111.8 million a year earlier.

SThree noted the year-on-year numbers were "against a strong comparative period and ongoing global macroeconomic weakness".

Third quarter Contract net fees inched down to GBP86.2 million from GBP86.6 million, while Permanent net fees dropped a more significant 31% to GBP16.8 million from GBP25.2 million.

SThree said this drop in Permanent net fees reflected both market conditions and its strategic investment towards Contract operations in specific markets, with the average Permanent headcount down 21%.

Contract net fees now represent 84% of wider net fees from 77% a year earlier.

In SThree's three largest markets, which represent 73% of net fees, the Netherlands grew 5%, while Germany was down 6% and US was down 19%.

Meanwhile, Engineering net fees were up 20%, Technology down 6% and Life Sciences down 24%.

SThree said its contractor order book remained flat from a year earlier, reflecting "sequentially improved new placement activity together with continued robust extensions performance and providing good visibility for the remainder of the year".

Net cash at August 31 stood at GBP83 million, up from GBP57 million a year earlier.

"We continue to deliver a resilient performance, underpinned by the group's strategic focus on Contract. While the wider environment remains uncertain, we are encouraged by our sequentially improving new placement performance and strong Contract extensions, demonstrating our clients' sustained demand for critical [science, technology, engineering and mathematics] skills," said Chief Executive Officer Timo Lehne.

"Our long-term opportunity is clear, underpinned by structural megatrends driving the acute need for scarce STEM talent. While we remain mindful of the macro-economic uncertainty across global markets, with all lead indicators of the group's performance monitored closely, we look ahead to the opportunities facing us with optimism.

"Supported by a resilient business model and strong financial position, we are trading in line with market expectations for the full year, and we remain well positioned to source and place the best STEM talent the world needs."

Meanwhile, SThree said its 'technology improvement programme' remains "on track and on budget", with its first city, Houston, Texas, now live, and with sequenced rollout across the group progressing "in line with stated plans".

"Our 'technology improvement programme', key to driving both scale and higher margins over the mid-to-long term, and to delivering a differentiated and higher value proposition within the market, continues to progress on track and on budget," Lehne continued.

"I am delighted that the first phase of the rollout in Houston is now complete, which is a significant milestone for the group. We are incredibly excited about the progress that has been made so far and continue to believe that this will be a key strategic step forward for our business."

Shares in SThree were up 4.0% to 373.50 pence each in London on Tuesday morning.

By Greg Rosenvinge, Alliance News reporter

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