FINANCIALS: SThree sees decline in profits but continued marketshare gains

Global STEM recruiter SThree has announced 2020 adjusted profit before tax of £30.1m, with group net fees for the year declining by 8% year-on-year.

The profit figure marks a drop of nearly £30m from 2019, according to the results for the year ended 30 November 2020, released today [25 January].

However, the company revealed “significant sequential improvement” in underlying group performance for the second half of the year, including a 4% increase in productivity per head, quarter-on-quarter increases in sales activity and contractor retention rates from Q3 and the stabilisation of the company’s contractor order book.

SThree also noted continued marketshare gains in the US, Germany, the Netherlands and the UK, “despite disruption, in line with 2024 strategic ambitions”. The company reported that 89% of group net fees were generated outside of the UK, a 2% rise over 2019. 

In 2020, the company resumed dividend payments with a final dividend proposed of 5p, in comparison with 0p in 2019.

Reporting on improvement in service quality, the results showed an increase in SThree’s customer net promoter score by eight points to 52. 

SThree CEO Mark Dorman said: “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.”

The results also reflected a balance sheet with net cash of £49.9m, an increase of more than £39m from 2019’s £10.6m.

In management news included in the results, it was revealed that company CFO and board member Alex Smith will leave SThree after 12 years with the organisation. The statement said a search was underway for his successor. 

Board chairman James Bielefeld highlighted Smith’s 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”.

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