Recruitment specialist SThree met with mixed fortunes in the first half of the year. For while gross profits from the company's international business - which now accounts for over half the total - grew by 20 per cent to £50.7m, gross profits in the UK operation plunged 29 per cent to £42.6m as trading slumped in the face of the recession. SThree has reduced staffing levels and introduced other cost saving measures which led to a restructuring charge of £8.5m in the first half.
Permanent placings fell by a third overall to 3,302, although the resulting fall in income was partially offset by a 17.3 per cent rise in average permanent placing fees, partly reflecting a scarcity of candidates for certain positions in the UK market. SThree continues to reduce its reliance on information and communications technology (ICT) recruitment which now accounts for 75 per cent of gross profits, down from 79 per cent a year ago.
However, although there are now signs that the UK market is stabilising, trading conditions in SThree's overseas markets are deteriorating, forcing broker Investec Securities to slash its full-year normalised pre-tax profit estimate from £22m to £16m, giving EPS of 8.2p (£56m and 29.2p in 2008).
| STHREE (STHR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 180p | MARKET VALUE: | £ 219m | |
| TOUCH: | 178-180p | 12-MONTH HIGH: | 260p | LOW: 117p |
| DIVIDEND YIELD: | 6.7% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 66p | NET CASH: | £43.9m | |
| Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 295 | 21.8 | 10.8 | 4.0 |
| 2009 | 281 | 2.7 | 1.1 | 4.0 |
| % change | -5 | -88 | -90 | - |
Ex-div:04 Nov Payment:04 Dec | ||||
