Growth in permanent placements drives SThree

10th Sep 2010 07:11

SThree joined the growing band of recruiters reporting growing markets, though the Benelux region has yet to move back into growth mode.On a constant currency basis, in the group's third quarter, which runs from June to August, gross profit on the permanent recruitment side of the business was up 36% on the corresponding quarter of last year and 18% higher than the second quarter figure.On the contractor side of the business gross profit was up 1% year on year and 8% better than the second quarter.Group gross profit was 15% higher than the third quarter of last year at £43.0m and up 13% on the preceding quarter.UK gross profit increased by 2% year on year and by 8% on the second quarter. Non-UK gross profit increased by 26% on a constant currency basis year on year and by 16%* on the second quarter. Non-UK now represents 60% of gross profit, up from 55%, while profit from areas other than the information and communication technologies sector now represents 39% of gross profit, up from 31% at the corresponding stage of 2009. At 29 August 2010 SThree had 4,093 contract runners, a decrease of 2.3% year on year, but sequentially up 3.6% on the half year position (30 May 2010: 3,952).Average permanent fees and Gross Profit Per Day Rates (GPDR) both strengthened in the period. Average permanent fees were up 9% (on a constant currency basis) year on year and up 3% (ditto) on the second quarter, whilst GPDRs were up 10% (ditto) year on year and stable on the second quarter.The group's dependence on public sector contracts is on the wane, and now accounts for 5% of transactions, down from 7% at the end of the second quarter.The current deal pipeline indicates that the group is experiencing improvements across all markets. At 29 August 2010, the number of permanent deals agreed in the period, with candidates due to start in the future, showed an increase of more than n 50% year on year.Net cash at the end of August stood at about £37m."All markets with the exception of Benelux are now growing year on year and sequentially. That said, trading conditions, whilst improving, are still yet to fully recover to pre-downturn levels," said Russell Clements, chief executive officer of SThree. "Our most up to date view of the market is provided by our deal pipeline, which continues to look encouraging. In addition we continue to focus on sector diversification and taking further steps towards the globalisation of our business reflecting our commitment to building SThree for the longer term," Clements offer.