13 September 2021
Q3 Trading Update
Full year profit performance expected to be significantly ahead of consensus
SThree plc ("SThree" or the "Group"), the only global pure-play specialist staffing business focused on roles in Science, Technology, Engineering and Mathematics ('STEM'), today issues a trading update covering the period 1 June 2021 to 31 August 2021.
As Q3 2020 was the quarter most significantly impacted by Covid-19, the Group has also provided comparisons against Q3 2019 in the table below.
The growth in 2021 vs 2019 demonstrates the very strong underlying performance of the Group and the relevance of its differentiated, STEM-focused offering. Highlights vs 2019 include:
*Current consensus Analyst PBT expectations are £51.4m. Source: SThree compiled consensus
Mark Dorman, Chief Executive, commented:
"The momentum in our performance from the start of the financial year has continued through the third quarter with net fees up 11% on 2019. Our strategy, positioned at the centre of the secular trends of STEM and flexible working, alongside a strengthening staffing market, has contributed to this strong performance.
The planned acceleration of investment into our people, talent acquisition, infrastructure and go-to-market proposition to drive long term sustainable growth will gather pace through the remainder of the financial year but the full effect is now likely to be felt in FY22. This, together with the strong net fees performance delivered in the quarter, and the impact of a potential return to more normal working and annual leave patterns not having been felt as yet, means that we now anticipate being significantly ahead of consensus profit expectations for the full year, following the upwards revision provided in June 2021.
Our rigorous focus on strategic execution has not wavered and we remain fully committed to the ongoing delivery of our long-term ambitions for all of our stakeholders, whatever the external circumstances."
Business Performance highlights
The Group's strong performance has continued into Q3 with net fees up 29% YoY.
Headcount and Productivity:
DACH delivered another strong quarter of performance in Q3 with net fees up 35% YoY
EMEA ex DACH saw net fees grow 21% YoY
USA, home to the world's largest STEM staffing market, recorded a very strong performance in Q3, up 31% YoY
APAC net fees were up 33% YoY
SThree remains in a strong financial position, with net cash at 31 August 2021 of circa £51m (31 August 2020: net cash £39m). As at 31 August 2021 the Group has total accessible liquidity of £106m. This is comprised of £51m net cash, a £50m revolving credit facility ("RCF") and a £5m overdraft facility (RCF and overdraft fully undrawn). In addition, SThree has a £20m accordion facility as well as a substantial working capital position, reflecting net cash due to the Group for placements already undertaken.
Analyst conference call
SThree is hosting a webinar for analysts and investors today at 0830am to discuss the Q3 Trading Update.
If you would like to register for the webinar please follow this link: https://bit.ly/STEM_Q3_TUwebinar
The Group plans to issue a trading update for the year ended 30 November 2021 on 13 December 2021.
(1) All YoY growth rates in this announcement are Q3 2021 versus Q3 2020, expressed at constant currency and exclude Australia, which we exited in Q4 2020
(2) The contractor order book represents value of net fees until contractual end dates, assuming all contractual hours are worked
(3) DACH - Germany, Austria and Switzerland
(4) EMEA ex DACH - UK, Ireland, Belgium, Netherlands, Luxembourg, France, Spain and Dubai
(5) ROW - All other countries we operate in excluding Germany, Netherlands, UK, USA and Japan
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (Regulation (EU) No.596/2014) as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018.
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Notes to editors
SThree plc brings skilled people together to build the future. It is the only global pure-play specialist staffing business focused on roles in Science, Technology, Engineering and Mathematics ('STEM'), providing permanent and flexible contract talent to a diverse base of over 9,000 clients in 14 countries.
The Group's c.2,600 staff cover the Technology, Life Sciences, Engineering and Banking & Finance sectors.
SThree plc is quoted on the Premium Segment of the Official List of the Financial Conduct Authority under the ticker symbol STEM.
Certain statements in this announcement are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by those statements. Forward looking statements regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. Certain data from the announcement is sourced from unaudited internal management information and is before any exceptional items. Accordingly, undue reliance should not be placed on forward looking statements.
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