Recruiter SThree (STHR) spent the first half of the year rebalancing its portfolio in order to achieve optimum performance. That meant trimming headcount in the underperforming energy division, while channelling investment towards its higher-margin contract business. The full benefits of the changes have yet to feed through, but gross profits were still up 10 per cent up on the 2014 half year to £111m.
Increased commercial activity within the contract business - particularly in the Americas - was underscored by a 14 per cent increase in the average headcount. Contract profit was boosted by a strong performance from the life sciences and banking/finance sectors. Meanwhile, gross profit derived from the IT segment were up by a fifth on a constant-currency basis to £45.3m - that's about 41 per cent of the group total.
Performance of the group's permanent business was more muted, with placements in both the Americas and continental Europe contracting marginally over the period. "There are too many of our permanent businesses on the cusp of break-even," said chief executive Gary Elden. Management’s focus is on increasing productivity in this part of the business.
Broker UBS expects adjusted EPS of 18.11p for the full year, up from 15.07p in 2014.
STHREE (STHR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 383p | MARKET VALUE: | £488m | |
| TOUCH: | 375-384p | 12-MONTH HIGH: | 400p | 287p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 1p* | NET DEBT: | £9.4m | |
| Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 342 | 8.2 | 4.7 | 4.7 |
| 2015 | 404 | 14.1 | 7.5 | 4.7 |
| % change | +18 | +72 | +60 | |
Ex-div: 5 Nov Payment: 11 Dec *Includes intangible assets of £10.4m, or 8p a share | ||||
