(Alliance News) - SThree PLC on Monday reported strong growth in the first half of its financial year, saying it is well-positioned to capitalise on increasing demand for science and technology hires.
In the six months to May 31, the London-based specialist staffing company said pretax profit surged 60% to GBP44.3 million year-on-year from GBP27.7 million.
Revenue jumped 26% to GBP772.2 million from GBP615.1 million.
Net fees reached record levels, growing 25% on the prior year, with double-digit growth across all regions and sectors.
"This has been driven by continuing high demand from our clients for STEM skills and flexible talent," the firm said.
Contract net fees grew 30%, and now constitute 77% of total net fees compared to 74% a year before. The contractor order book rose 35%. SThree said the faster growth of fees from contract staffing compared to permanent staffing - where fees rose by 11% - is in line with the company's focus on "flexible talent".
Operating profit conversion ratio reached 22%, an increase of 5.1 percentage points on the first half a year prior. SThree expects this to decrease significantly in the second half, as it plans investments in people and digital transformation, but notes "it demonstrates the ability of the business to deliver a high conversion ratio".
"The investments are designed to allow us to sustainably deliver these levels of margins from 2024 onwards," it said.
SThree declared an interim dividend of 5.0 pence, a 67% increase from 3.0p a year before. It continues to target a dividend cover range of 2.5 times to 3.0 times.
SThree said sales have remained robust since the end of May.
Shares were up 1.9% to 395.50 pence each on Monday late morning in London, having reached a high of 405p earlier in the day.
"Whilst we are mindful of the wider macro-economic uncertainties, the demand for STEM talent, and flexible STEM talent in particular, is structural. Our position as the number one destination for talent in the best STEM markets and our strong contractor order book underpins our continued confidence," said Chief Executive Timo Lehne.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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SThree (STEM)