FINANCIALS: SThree remains resilient despite dip in profits

Global STEM staffing business SThree delivered a net fee performance of £208.6m for the first half of 2023, the company reported today [25 July].

The net fee performance represented a 2% constant-currency decrease against the peak prior year level of 25% growth to £203.1m in the first half of 2022. Contract recruiting, now the company’s strategic focus, drove the performance and now represents 81% of group net fees, which increased 3% following growth across most of its regions of operations, the company said.

SThree’s Employed Contractor Model (ECM), in which the contractors are directly employed by the company for the duration of their contract, “is an increasing trend and driver of their performance, representing 45% of all contract work undertaken by the group”, a company statement said. In the comparable period of 2022, it represented 43% of the group’s work. 

“It continues to be the predominant model in the US, and is fast-growing across Europe,” SThree said. This is why, the company went on to say, the introduction of automation to ECM processes, “enabling scale, is a key aspect of the Technology Improvement Programme”. 

The gains were offset by the company’s Permanent business, down 19% on a like-for-like basis, “reflecting global market conditions and the continuing strategic investment into Contract in several markets”, SThree said.

Revenue for the first half of this year was £825.2m, compared to £772.2m for H1 FY 22, with operating profit in H1 2023 of £38.1m, compared to £44.6m reported in the comparable period last year. 

Profit before tax in H1 2023 was £38.5m and £44.3m in H1 2022, down 20.4% like-for-life.

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