SThree set to deliver record profits for year just ended

Recruitment firm SThree said in a trading update on Monday that group net fees for the year just ended were up 19% year-on-year, driven by its strategy and increased demand for skills in the science, technology, engineering and mathematics fields on which it focuses.

The London-listed firm also reported the third consecutive quarter of above-20% growth, with net fees in the fourth quarter up 25% year-on-year.

It said its three largest countries represented 74% of group net fees, with Germany up 23%, the United States up 24%, and the Netherlands up 19%.

Contract and permanent net fees were ahead 17% and 24% year-on-year for the 12 months ended 30 November, respectively, while contract net fees represented 75% of group net fees, down slightly from the 76% it recorded in the 2020 financial year.

SThree’s contractor order book was 43% higher year-on-year at the end of the fourth quarter, compared to 41% at the end of the third quarter.

The company said it had a “robust” balance sheet, with net cash totalling £58m as at 30 November.

Compared to the 2019 financial year, pre-pandemic, SThree said full-year net fees were up 9%, group net fees in the fourth quarter were ahead 16%, Germany net fees rose 18%, the United States by 26% and the Netherlands by 7%, and the contractor order book was 30% firmer.

The company announced that Mark Dorman would be stepping down from the board and as chief executive officer of the group on 31 December.

It said Timo Lehne, currently the senior managing director of its largest region, Germany, Austria and Switzerland, would be appointed interim chief executive and for that period would join the board as executive director from 1 January.

Dorman would continue to assist the Group in facilitating a smooth handover and transition until 1 April.

“SThree has continued to deliver strong results in our final quarter of the year, and delivered full year net fee growth of 19% year-on-year and 9% versus 2019,” Mark Dorman said.

“Our strategy, positioned at the centre of the secular trends of STEM and flexible working, has continued to drive this excellent performance.

“The group expects to deliver record profits for the full year, in line with consensus expectations, which were materially upgraded in September.”

Dorman said SThree’s people had been “incredibly resilient, productive and dedicated” in delivering the results.

“I have agreed with the board that this is the right time for a change for both SThree and me, due to personal reasons.

“It has been a privilege to lead SThree through such extraordinary times, working with talented, dedicated and values-driven people for nearly three years.

“Our strategy has driven excellent financial performance and benefits to all our stakeholders.”

At 1002 GMT, shares in SThree were down 9.52% at 494p.