SThree 's (STHR) focus on growing consultant headcount in its higher-margin contract business is paying off, with net fee income up 17 per cent in 2015. The impact of the investment was particularly noticeable in the Americas, where gross profit was up by a quarter. The life sciences and banking and finance sectors led the way, while management also increased investment in IT via its Computer Futures brand.
However, management has been forced to undertake some cyclical housekeeping, including a drastic cut in permanent headcount at the group's energy business, while investments have been channelled towards favourable markets such as IT. Like rival recruiters, SThree experienced a slowdown in the UK and Ireland during the final quarter of 2015, meaning gross profit growth for the region was up by just 5 per cent. The group also downsized its UK and Africa energy business, which was focused on the upstream oil and gas markets. Unsurprisingly, the Asia Pacific and Middle East business also suffered a fall in gross profit, due to lower demand for energy, mining and minerals recruitment in Australia, as well as a slowdown in China.
UBS expects adjusted EPS of 22.59p, up from 19.88p in 2015.
STHREE (STHR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 304p | MARKET VALUE: | £392m | |
| TOUCH: | 303-304.5p | 12-MONTH HIGH: | 400p | LOW: 290p |
| DIVIDEND YIELD: | 4.6% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 46p* | NET CASH: | £6.2m | |
| Year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 543 | 30.2 | 16.8 | 14 ** |
| 2012 | 577 | 25.3 | 14.1 | 14 |
| 2013 | 634 | 15.5 | 6.1 | 14 |
| 2014 | 747 | 24.0 | 12.9 | 14 |
| 2015 | 849 | 38.0 | 21.0 | 14 |
| % change | +14 | +59 | +63 | - |
Ex-div: 28 Apr Payment: 3 Jun *Includes intangible assets of £11.1m, or 9p a share **Excludes 11p special dividend | ||||
