DJ SThree: Final Results
SThree (STEM)
SThree: Final Results
25-Jan-2021 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014
(MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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SThree plc
("SThree" or the "Group")
FINAL RESULTS FOR THE YEAR ENDED 30 NOvember 2020
delivered a resilient performance
guided by our purpose and our focus on STem
SThree plc, the only global pure-play specialist staffing business focused on roles in Science, Technology, Engineering
and Mathematics ('STEM'), is today announcing its financial results for the financial year ended 30 November 2020.
FINANCIAL HIGHLIGHTS
2020 2019 Variance
Constant
Continuing operations
Adjusted (1) Reported Adjusted (1) Reported Movement (2) currency
excluding discontinued operations in Australia
movement (3)
Revenue (GBP million) 1,202.6 1,202.6 1,324.7 1,324.7 -9% -9%
Net fees (GBP million) 308.6 308.6 338.0 338.0 -9% -8%
Operating profit (GBP million) 31.3 31.8 60.0 57.7 -48% -48%
Operating profit conversion ratio 10.1% 10.3% 17.8% 17.1% -7.7% pts -7.6% pts
Profit before tax (GBP million) 30.1 30.6 59.1 56.8 -49% -49%
Basic earnings per share (pence) 13.9 14.2 33.2 31.8 -58% -58%
Proposed final dividend (pence) 5.0 5.0 - - n/a n/a
Net cash (GBP million) (4) 49.9 49.9 10.6 10.6 +371% +371%
1) Excluding the impact of GBP0.5 million in net exceptional income (2019: GBP2.3 million in net exceptional cost).
(2) Variance compares adjusted 2020 against adjusted 2019 to provide a like-for-like view.
(3) Variance compares adjusted 2020 against adjusted 2019 on a constant currency basis, whereby the prior year foreign exchange rates are applied to current and prior financial year results to remove the impact of exchange rate fluctuations.
(4) Net cash represents cash and cash equivalents less borrowings and bank overdrafts and excludes leases.
FULL-YEAR HIGHLIGHTS - Group net fees for the full year declined 8% YoY*, demonstrating resilience against COVID-19's impact and the
continued recovery of the underlying business in H2. - Full year adjusted profit before tax of GBP30.1 million (2019: GBP59.1 million). - Significant sequential improvement of underlying Group performance in the second half.
- Contractor order book stabilised
- Sales activity and contractor retention rates increased quarter-on-quarter from Q3
- Productivity per head up 4% in H2 YoY - Continued market share gains in the USA, Germany, the Netherlands and the UK despite disruption, in line with 2024
strategic ambitions. - Contract net fees demonstrating resilience, down 7%*. Contract represents 76% of Group net fees (2019: 74%) in line
with strategic focus. - Permanent net fees also showing resilience, down 13%*. - Customer net promoter score improved by eight points to 52, demonstrating the improving quality of our service. - 89% of Group net fees generated outside the UK (2019: 87%). - Very strong balance sheet, with net cash of GBP49.9 million at the year-end (2019: GBP10.6 million). - Resumption of dividend payments with a final dividend proposed of 5.0 pence (2019: nil pence). - Alex Smith, CFO, will be stepping down from his position during 2021 once a suitable successor has been identified.
* In constant currency
Mark Dorman, CEO, commented:
"In 2020 we faced a once in a century event that provided a series of unprecedented tests. SThree not only dealt with those challenges but is emerging as a stronger business; I am proud of the many achievements we are able to list today. Through our unrelenting focus on our strategy, and guided by our purpose, we have taken market share in several of our key regions and delivered robust financial results which underscore our differentiation from non-specialist staffing businesses. Our USA business, for example, has managed to grow net fees 2%* this year against an overall staffing market decline, which is a testament to the quality of our teams there and the strength of our targeted STEM strategy.
Our focus on improving the way we operate, no matter the environment, has delivered increased sales activity, contractor retention rates and the average productivity of our consultants steadily improving since Q3.
Alongside the positive progress in key performance indicators such as these, we have continued to make a real impact on the lives of the people we work with and the society in which we operate. In 2020, we have placed nearly 14,000 of the skilled people who are coming together to build the future, as well as providing comprehensive support to our consultants, clients and communities. Being part of a responsible and sustainable organisation has never been more important and we have shown this is at SThree's core.
Whilst uncertainty remains, we are confident we have the right strategy in place to continue to drive the Group forward towards our long-term ambitions and are highly focused on ensuring we execute on it. Over the coming year we will continue to invest in our people, data, technology, and our go-to market approach, leveraging the power of our platform to reduce the cost of customer and candidate acquisition. Our aim remains to continue taking market share, working towards our ultimate goal of becoming the number one STEM talent provider in the best STEM markets."
A video overview of the results from the CEO, Mark Dorman, and CFO, Alex Smith, is available to watch here: http:// bit.ly/STEM_FY20_overview
Management Succession
The Board also announces that following over twelve successful years with the Group, Alex Smith, CFO, will be stepping down as CFO and a Board Member. The search for his successor is underway and the market will be updated accordingly.
James Bilefield, Chairman, commented:
"On behalf of the Group, I would like to take this opportunity to thank Alex for his excellent contribution over the past twelve years. Alex has worked diligently and effectively with both the Board and our teams to help make SThree what it is today, astutely guiding the Group's entrepreneurial spirit.
It would be remiss not to highlight his work over the past year, through an incredibly difficult environment, to ensure that the Group has retained its financial strength. We are hugely grateful to him for building and maintaining such a strong platform from which we will continue to deliver, and allowing us to focus on executing against our ambitions as we move into our next stage of growth.
Mark Dorman, CEO, added:
"On joining the Group and wider industry, I could not have asked for a better right hand, providing me with sage insight and guidance. It has truly been a pleasure working together and I want to take this opportunity to thank Alex, both from me personally, but also the whole of SThree, and I know we all wish him all the best for the future."
Analyst conference call
SThree is hosting a webinar for analysts today at 09:30 GMT. If you would like to register for the webinar, please contact SThree@almapr.co.uk
SThree will issue its Q1 trading update on 15 March 2021.
Enquiries:
SThree plc 020 7268 6000
Mark Dorman, Chief Executive Officer
Alex Smith, Chief Financial Officer
Steve Hornbuckle, Company Secretary
Alma PR 020 3405 0205
Rebecca Sanders-Hewett SThree@almapr.co.uk
Susie Hudson
Notes to editors
SThree is the only global pure play specialist staffing business focused on roles in STEM (Science, Technology, Engineering and Mathematics). It brings skilled people together to build the future through the provision of specialist Contract and Permanent services to a diverse client base of over 9,000 clients. From its well-established position as a major player in the Technology sector, the Group has broadened the base of its operations to include businesses serving the Banking & Finance, Energy, Engineering and Life Sciences sectors.
Since launching its original business, Computer Futures, in 1986, the Group has adopted a multi-brand strategy, establishing new operations to address growth opportunities. SThree brands include Progressive, Computer Futures, Huxley Associates and Real Staffing Group. The Group has circa 2,600 employees in 15 countries.
SThree plc is quoted on the Official List of the UK Listing Authority under the ticker symbol STEM and also has a USA level one ADR facility, symbol SERTY.
Important notice 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. Data from the announcement is sourced from unaudited internal management information. Accordingly, undue reliance should not be placed on forward looking statements.
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