The UK and Ireland offered little encouragement for specialist recruiter SThree (STHR) through 2017. The group saw its gross profit drop 14 per cent in these regions during the year, driven by political uncertainty following the Brexit referendum and the snap general election. Gross profit was even down 11 per cent in contract business, a typically more resilient sector in tough times.
The fall in domestic activity means the UK now accounts for just 19 per cent of the group’s gross profit, from 25 per cent in the previous year, although performance in other geographic segments was more promising. The US was the star turn, with gross profit rising 18 per cent, prompting management to describe the business as “back on track” following a strong showing in the energy and banking markets. Continental Europe, the largest division, also performed well, growing gross profits 9 per cent thanks to falling unemployment, rising incomes and strong demand for candidates in STEM disciplines (science, technology, engineering and mathematics) in which the group specialises.
Analysts at Investec are forecasting adjusted pre-tax profits of £49.6m, giving EPS of 26.9p for the 2018 financial year (from £43.5m and 23.8p in 2017).
| STHREE (STHR) | ||||
| ORD PRICE: | 369p | MARKET VALUE: | £479m | |
| TOUCH: | 368-369p | 12-MONTH HIGH: | 390p | LOW: 281p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 62p | NET CASH: | £5.6m | |
| Year to | Turnover | Pre-tax | Earnings | Dividend |
| 30 Nov | (£bn) | profit (£m) | per share (p) | per share (p) |
| Year to 30 Nov | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 0.63 | 15.5 | 6.1 | 14.0 |
| 2014 | 0.75 | 24.0 | 12.9 | 14.0 |
| 2015 | 0.85 | 38.1 | 21.0 | 14.0 |
| 2016 | 0.96 | 37.3 | 21.2 | 14.0 |
| 2017 | 1.11 | 37.7 | 21.5 | 14.0 |
| % change | +16 | +1 | +1 | |
| Ex-div: | 26 Apr | |||
| Payment: | 8 Jun |
