In the wake of the EU referendum, the UK has served as a useful microcosm for what happens to recruitment companies in uncertain times. In short, almost all have struggled to grow since the vote. And in light of the equity market sell-off towards the end of last year, it seems investors' uncertainty is spreading.
Curious then, that SThree’s (STHR) full-year numbers defy such a gloomy prognosis. The group grew net fees in every geography except the UK, and beat group consensus pre-tax profit estimates by 3 per cent. Continental Europe led the way, with net fees up by a fifth.
Management has also moved support functions to a new "centre of excellence" in Glasgow – away from its London headquarters. This required moving 240 roles – giving rise to an estimated £14m in added costs – but once completed the move should yield £5m in annual savings. Even prior to completion, it has delivered £2.6m-worth of savings, with £2.9m more expected for 2019.
Analysts at Liberum expect adjusted pre-tax profits of £59m for the year ending November 2019, giving EPS of 33p (from £53m and 29.7p in FY2018).
| STHREE (STHR) | ||||
| ORD PRICE: | 280p | MARKET VALUE: | £366m | |
| TOUCH: | 279.5-280.5p | 12-MONTH HIGH: | 394p | LOW: 245p |
| DIVIDEND YIELD: | 5.2% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 78p | NET DEBT: | 4% | |
| Year to 30 Nov | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 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 |
| 2018 | 1.26 | 47.0 | 26.6 | 14.5 |
| % change | +13 | +25 | +24 | +4 |
| Ex-div: | 25 Apr | |||
| Payment: | 7 Jun |
