The financial summary including operating statistics, financial ratios and performance as well as the segmentations per region of the previous five years can be found here.

Financial highlights

Investment Case


All figures are reported figures before exceptional items in £'m unless stated otherwise.

  30 November
30 November
30 November
1 December
25 November
Financial Performance
Revenue 959.9 848.8 746.9 634.3 577.5
Gross Profit 258.7 235.7 218.2 199.8 205.3
Operating profit 41.5 29.8 21.2 25.1 41.3
Total Assets 231.5 185.1 203.4 160.0 168.0
Total equity 75.7 59.4 51.3 51.6 61.9
Net cash/(debt) 10.0 6.2 (9.9) 8.7 28.3
Cash from operations 46.9 60.8 20.1 9.5 32.7
Financial Ratios
Conversion ratio (%) 16.0 17.6 13.7 10.6 12.2
Cash conversion 96 126.0 47.8 80.0 88.0
Basic EPS (pence) 23.2 23.2 16.3 9.1 14.1
Dividends per share (pence) 14.0 14.0 14.0 14.0 14.0
Operational Statistics
Average total headcount 2,590 2,667 2,487 2,228 2,234
Average sales consultants 2,044 2,117 2,002 1,736 1,663
Active contractors at year end 9,078 8,412 7,573 5,791 5,122

*2016 figures are adjusted for the impact of £3.5m of costs in relation to the restructuring of certain sales businesses and central support functions.

**2015 figures were adjusted for the impact of £3.1m of costs in relation to the restructuring of the Energy business and the impairment of certain IT assets.


  2016 2015 2014 2013 2012
GP - UK & Ireland* 25% 30% 30% 31% 35%
GP - Continental Europe 49% 44% 46% 49% 48%
GP - USA 20% 19% 15% 11% 7%
GP - Asia Pac & ME 6% 7% 9% 9% 10%
Contract % 67% 64% 61% 56% 50%
Permanent % 33% 36% 39% 44% 50%

Financial highlights

  2016 2015(3) Variance
As reported(4)
As reported
Revenue 959.9 959.9 746.9 848.8 848.8
Gross Profit 258.7 258.7 218.2 235.7 235.7
Operating profit 41.3 37.8 29.8 41.5 38.4
Profit before taxation ("PBT") 40.8 37.3 29.3 40.8 37.7
Basic earnings per share 23.2p 21.2p 16.3p 23.2p 20.8p
Proposed final dividend 9.3p 9.3p 9.3p 9.3p 9.3p
Total dividend (interim and final) 14.0p 14.0p 14.0p 14.0p 14.0p
Operation profit conversion ratio 16.0% 14.6% 13.7% 17.6% 16.3%

(1) 2016 figures are adjusted for the impact of £3.5m of costs in relation to the restructuring of certain sales businesses and central support functions.
(2) 2015 figures were adjusted for the impact of £3.1m of costs in relation to the restructuring of the Energy business and the impairment of certain IT assets.
(3) 2015 figures exclude the impact of £0.4m exceptional gain.
(4) FX impacted positively on our results YoY on a reported basis.

Investment Case

The service we offer covers the entire recruitment process end to end. We are involved at every stage from candidate and client matching to the start date and beyond. By contrast, job boards and social networking sites are primarily marketplaces that act as a means of introduction. Furthermore, we offer the sought-after candidate a "concierge" level service which is free to them and hence highly attractive compared to the alternatives.

Diverse Sectors and Countries

Having started in the UK we now generate over two thirds of our business from our international operations. We have a total of 43 offices in 15 countries. We operate across a range of industry sectors including ICT, Banking & Finance, Engineering, Energy and Life Sciences sectors.

Balanced portfolio of Permanent and Contract business

Although we have a balanced business model, including both contract and Permanent, each having its own benefits, our current focus is on building Contract, whilst building productivity in permanent. Our Contract runner level is at record high and the reasons why we will continue to focus on growth in Contract in 2016 are as follows:

  • Higher lifetime value then Permanent equivalent
  • Especially suited to STEM markets, which are often project based and where there is high growth potential
  • Greater barriers to entry due to cash requirements and increasing compliance and regulatory requirements
  • Better visibility of earnings
  • More resilient than permanent in a less certain climate
  • Opportunities to build on existing high standards of client service

Pure play specialist stem recruiter

The STEM recruitment market has the following characteristics:

  • Highly skilled and niche, ideal for the specialist recruitment arena, placing candidates with highly sought after technical skills
  • A fast growing job market
  • Higher earning
  • High demand combined with shorter supply
  • Higher churn as individuals move to update skills within project based STEM roles
  • Contract, our key area of growth, is uniquely suited to the STEM market

Demand for quality talent in STEM markets is on the rise, primarily due to:

  • An ageing workforce
  • Expanding client portfolios
  • Increasing government and industry regulations
  • A shortage of talent entering these industries

Increasingly exposed to markets with structural growth

Many of the territories in which we operate have relatively immature specialist staffing and our exposure to these countries is increasing as we grow internationally.

Focused on project-oriented markets

We play to our strengths in our STEM sectors which are, by their nature, project oriented and technology driven. This not only benefits our contract business as clients are often seeking temporary hires, but it also expedites natural churn on the permanent side to levels above that typically seen in other professional sectors. This enhances demand even in mature markets.

Leading edge systems as a platform for growth

We have always had a firm belief in the power of providing the right tools for the job. Our industry-leading systems have been developed with the aim of turning huge amounts of data into commercially useable information. Our candidate databases are accessible on a global basis and we run the business through bespoke sales management applications. Our systems and global infrastructure provide a scalable platform for future growth.

Robust dividend track record

The cash generative nature of our business allows us to adopt a robust attitude towards our dividend. Even during the global downturn we maintained our dividend at the pre-downturn level.

A highly entrepreneurial culture led by owner managers

We believe strongly in the importance of equity participation by our staff. Our CEO and many of our senior managers have significant holdings of SThree stock. We also operate a (Tracker Share) ("minority interest") Scheme which allows selected management to buy a stake in the business for which they are responsible, making them part-owners rather than simply paid managers.

Tracker share arrangements

Low barriers to entry into the recruitment market make it a challenge to retain senior staff - tracker shares help to retain staff.

The "tracker share" or Minority Interest ("MI") model helps combat this by allowing selected individuals to invest in the business for which they are responsible. This enables them to share in the success of the business they help to create. This is unique in the sector and helps drive strong retention and ownership behaviours at a senior level.

  • Strong governance via MI steering committee
  • 2016 settlements £4.6m (2015: £8.5m, 2013:£7m)
  • Expect future settlements to be £5-£15m in shares
  • Settlements entirely at SThree's discretion - no put option