It was the ongoing strength of the higher-margin contract business that drove gross profits up 18 per cent for recruiter SThree (STHR) last year. The division, which places highly skilled individuals in project-based roles, now accounts for 61 per cent of gross profit - up from 56 per cent in 2012-13.
The group's restructure, which involved rationalising "sub-scale" operations in India and Brazil and expanding in the US, also seems to be paying off. Gross profit in the Americas was up by almost three-quarters year-on-year, with much of the growth coming from the US. The recruiter is doubling its office space in the country, including new offices in New York and San Francisco.
SThree's headcount increased by 12 per cent on the back of sales growth in 2014. Alex Edelman, chief financial officer, said the group plans to continue growing staff numbers within its contract business, but will focus on increasing productivity within its permanent recruitment business. Here growth in gross profit - a measure of underlying sales for recruiters - picked up as the year progressed to finish up 6 per cent for the 12-month period.
Broker UBS expects adjusted EPS of 19.4p this year, up from 15.3p in 2013-14.
| STHREE (STHR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 333p | MARKET VALUE: | £422m | |
| TOUCH: | 327-339p | 12-MONTH HIGH: | 442p | LOW: 287p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 26 | |
| NAT ASSET VALUE: | 40.5p* | NET DEBT | 19% | |
| Year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 475 | 21.6 | 11.9 | 12.0 |
| 2011 | 543 | 30.2 | 16.8 | 14.0 ** |
| 2012 | 577 | 25.3 | 14.1 | 14.0 |
| 2013 † | 634 | 15.5 | 6.1 | 14.0 |
| 2014 | 747 | 24.0 | 12.9 | 14.0 |
| % change | +18 | +55 | +111 | - |
*Includes intangible assets of £11m or 9p per share. ** Excludes 11p special dividend. † 53 week period to 1 Dec 2013 | ||||
