SThree finishes year at top end of expectations

(ShareCast News) - International specialist staffing business SThree announced its final results for the year to 30 November on Monday, describing it as a "robust" full year performance in the face of mixed trading conditions.The London-listed firm posted adjusted profit before tax of £40.8m, slightly above the top end of the consensus range and precisely in line with the figure in 2015.Foreign exchange effects increased its reported operating profit by around £4.2m, and group gross profit was up 2% year-on-year to £258.7m, and up 10% on a reported basis.There was "robust growth" across ICT, up 12% year-on-year, and engineering up 9% year-on-year, although that was offset by more difficult trading in the Energy and Banking & Finance sectors.The board also reported strong growth in Continental Europe, up 13% year-on-year, with 75% of group gross profits now generated from markets outside the UK and Ireland, up from 70% in 2015.Contract gross profit was up 8% year-on-year, and ahead by 11% excluding Energy, with a record 9,078 contract runners at year-end.The contract sector now accounted for 67% of group gross profit, up from 64%.Permanent gross profit was down 8% year-on-year, or down 1% excluding Energy, but the board said productivity improved by 3% year-on-year.During the year, SThree said it restructured its business in markets where it was facing adverse trading conditions.It did report an improved balance sheet position with year-end net cash of £10.0m, up from £6.2m at the start of the year."The group delivered a solid overall performance in what was a challenging financial year," said CEO Gary Elden."Our strategic approach of diversifying by region and sector, with a key focus on growing our Contract business, has added resilience to our earnings, enabling us to weather the political and economic uncertainties that we have faced through 2016."Looking ahead, Elden said the heightened level of political and economic uncertainty remained the primary feature of the firm's trading outlook.Against that backdrop he said the board would continue to focus on the contract market, where it sees attractive growth opportunities, and which is more resilient in periods of economic uncertainty."As we have done in 2016, we will pay close attention to productivity and underlying costs."We have shown in previous periods of uncertainty that we can optimise our performance," Elden explained."We will retain a prudent approach to planning and selective investment in growth, while preserving the agility to respond quickly to market opportunities as they arise, in the year ahead."