Financials: SThree encouraged as contract increase bolsters profits
14 July 2014
International staffing specialist SThree said contract recruitment was up 22% and now made up nearly two-thirds of group profit as it reported an encouraging set of interim results to the end of June.
Mon, 14 Jul 2014International staffing specialist SThree said contract recruitment was up 22% and now made up nearly two-thirds of group profit as it reported an encouraging set of interim results to the end of June.
The group, which reported a 23.5% increase in operating profit to £8.4m in the first six months, said it made 3,057 permanent placements – a 1% reduction on the same period last year – but an increase in average fees (on a constant currency basis) led to a modest 2% improvement in gross profit.
SThree, which highlighted an encouraging performance from the banking & finance recruitment sectors, said it will be focusing on driving up the productivity of new hires in the next six months, particularly in permanent, as headcount growth moderates.
The company said by the end of June, headcount in its perm teams was up 19% year-on-year and it expects to see an improved performance as the newer headcount matures and productivity increases. The perm pipeline was up 5% on a volume basis.
Despite the increase in gross profit, SThree said its investment in headcount inevitably meant that it carried some additional costs in the period before these new hires become fully productive.
It added that the strength of its contract book, investment in headcount and benefits of the restructuring in the second half of last year will provide the group with a solid platform for growth and operational gearing into recovery.
The company added that after successful launches in the US and Australia, it is in the process of rolling out an employed contractor model – whereby it takes on the responsibility of paying the employee’s National Insurance and tax etc – and enhancing its contractor service offerings in other regions.
The group, which reported a 23.5% increase in operating profit to £8.4m in the first six months, said it made 3,057 permanent placements – a 1% reduction on the same period last year – but an increase in average fees (on a constant currency basis) led to a modest 2% improvement in gross profit.
SThree, which highlighted an encouraging performance from the banking & finance recruitment sectors, said it will be focusing on driving up the productivity of new hires in the next six months, particularly in permanent, as headcount growth moderates.
The company said by the end of June, headcount in its perm teams was up 19% year-on-year and it expects to see an improved performance as the newer headcount matures and productivity increases. The perm pipeline was up 5% on a volume basis.
Despite the increase in gross profit, SThree said its investment in headcount inevitably meant that it carried some additional costs in the period before these new hires become fully productive.
It added that the strength of its contract book, investment in headcount and benefits of the restructuring in the second half of last year will provide the group with a solid platform for growth and operational gearing into recovery.
The company added that after successful launches in the US and Australia, it is in the process of rolling out an employed contractor model – whereby it takes on the responsibility of paying the employee’s National Insurance and tax etc – and enhancing its contractor service offerings in other regions.
