Recruitment group SThree (STHR) reported reasonable full-year sales growth, but profits slumped - reflecting a fall in consultant productivity amidst tough economic conditions, although overseas investment also played a part. New chief executive Gary Elden reckons the permanent recruitment market was especially challenging in the second half, although robust contractor demand helped offset that.
Group net fee income (NFI) rose 5 per cent to £205.3m, driven by a strong performance in Germany, the US and Australia - NFI, on a constant currency basis, rose 14 per cent, 49 per cent and 38 per cent, respectively, in these markets. Moreover, NFI generated from outside the UK rose 8.2 per cent to £134.4m. But the UK operation continued to struggle with NFI there having slipped 0.5 per cent to £70.9m - a weak banking market was a factor. Customers are also delaying permanent staffing decisions and are filling gaps with temporary contract staff. Contract placement numbers rose 9.2 per cent to 5,122, while permanent placements fell 1.2 per cent to 7,434 - so the proportion of group NFI generated from permanent placements fell from 52 per cent to 50 per cent.
Broker Investec Securities currently forecasts adjusted pre-tax profit of £28m for 2013, giving EPS of 15.4p - but expects to nudge those down by around 3.5 per cent.
STHREE (STHR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 344p | MARKET VALUE: | £417m | |
| TOUCH: | 340-344p | 12-MONTH HIGH: | 349p | LOW: 242p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 51p** | NET CASH: | £28.3m | |
| Year to 25 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 632 | 54.1 | 28.8 | 12.0 |
| 2009 | 519 | 8.93 | 4.00 | 12.0 |
| 2010 | 475 | 21.6 | 11.9 | 12.0 |
| 2011 | 543 | 30.2 | 16.8 | 14.0* |
| 2012 | 578 | 25.1 | 14.1 | 14.0 |
| % change | +6 | -17 | -16 | - |
Ex-div: 1 May Payment: 5 Jun *Excludes 11p special dividend **Includes intangible assets of £14.3m, or 12p a share | ||||
