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    STHR   GB00B0KM9T71

STHREE PLC

(STHR)
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Delayed Quote. Delayed London Stock Exchange - 09/24 11:35:22 am
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09/24STHREE : Q1 Trading Update Presentation (slides)
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SThree : Half Year Results

07/19/2021 | 02:01am EDT
SThree (STEM) 
SThree: Half Year Results 
19-Jul-2021 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 
(MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
=---------------------------------------------------------------------------------------------------------------------- 
SThree plc 
("SThree" or the "Group") 
 
RESULTS FOR THE HALF YEAR ENDED 31 MAY 2021 
 
strong profit growth versus 2020 & 2019 
 
CURRENTLY TRACKING AHEAD OF FY21 EXPECTATIONS 
 
SThree plc, the only global pure-play specialist staffing business focused on roles in Science, Technology, Engineering 
and Mathematics ('STEM'), is today announcing its financial results for the six months ended 31 May 2021. 
 
FINANCIAL HIGHLIGHTS 
 
                                    HY 2021               HY 2020              Variance 
                                                                                            Constant 
Continuing operations (1)          Adjusted (2) Reported Adjusted (2) Reported Movement (3) currency 
                                                                                            movement (4) 
Revenue (GBP million)                615.1        615.1    596.0        596.0    +3%          +4% 
Net fees (GBP million)               164.3        164.3    149.9        149.9    +10%         +10% 
Operating profit (GBP million)       28.1         28.2     13.9         14.3     +102%        +106% 
Conversion ratio (%)               17.1%        17.2%    9.2%         9.5%     +7.9% pts    +8.0% pts 
Profit before tax (GBP million)      27.6         27.7     13.1         13.6     +110%        +114% 
Basic earnings per share (pence)   14.4         14.5     6.1          6.4      +136%        +140% 
Interim dividend per share (pence) 3.0          3.0      nil          nil      n/a          n/a 
Net cash (GBP million) (5)           47.5         47.5     31.0         31.0     +53%         +53% 

(1) Excluding discontinued operations in Australia.

(2) Excluding the impact of GBP0.1 million in net exceptional income recognised (HY 2020: GBP0.4 million).

(3) Variance compares adjusted HY 2021 against adjusted HY 2020 to provide a like-for-like view.

(4) Variance compares adjusted HY 2021 against adjusted HY 2020 on a constant currency basis, whereby the prior period foreign exchange rates are applied to current and prior financial period results to remove the impact of exchange rate fluctuations.

(5) Net cash represents cash and cash equivalents less borrowings and bank overdrafts and excluding leases.

HALF-YEAR HIGHLIGHTS ? Very strong operating profit growth, up 106% (1), driven by better market conditions, high demand for STEM skills,

and elevated contractor working hours that improved productivity. ? Net fees up 10% YoY:

? Strong growth achieved in DACH (2) and the USA.

? Life Sciences and Technology net fees up significantly across the Group.

? Q2 net fees up 22% YoY (21% adjusted for working days (3)). ? Contract and Permanent net fees up 8% and 18% respectively YoY. ? Contractor order book (4) up 33% YoY. ? Top five countries represent 86% of Group net fees, with Germany accounting for 33% and USA 25%. ? Strong balance sheet with net cash as at 31 May 2021 of GBP47.5 million (HY 2020: GBP31.0 million). ? Interim dividend approved at 3 pence per share, set at a level consistent with dividend cover target for the year

in the range of 2.5x to 3.0x. ? Making good progress against our ESG targets, including

? Over 16,500 lives positively impacted in HY 2021.

? SThree's renewables business (6% of net fees) up 37% versus HY 2020, ahead of our target to double the share of

this business by 2024.

As Q2 2020 was significantly impacted by COVID-19, the Group has provided comparisons against 2019 for net fees and profit. The growth seen in 2021 vs 2019, across several regions and sectors, as well as for the Group, demonstrates very strong underlying performance across all of our businesses and the relevance of its differentiated, STEM-focused offering. Highlights vs 2019 include: ? Q2 net fees up 8% vs 2019. ? Group net fees for HY up 3% vs 2019. ? Adjusted operating profit up 18% vs 2019.

(1) All YoY growth rates are expressed at constant currency and exclude Australia, which we exited in Q4 2020.

(2) DACH - Germany, Austria and Switzerland.

(3) Q2 2021 has one more working day vs Q2 2020 and flat vs Q2 2019.

(4) The contractor order book represents value of net fees until contractual end dates, assuming all contractual hours are worked.

Mark Dorman, CEO, commented:

"We are delighted to report strong overall performance in the first half, driven by the hard work of our teams across the globe. Our profit has grown substantially from HY 2020, and has surpassed the pre-pandemic levels of 2019, reflecting the strength of the business and our growth trajectory.

Profit growth was driven by improving market conditions, including especially strong demand for STEM skills, and productivity growth.

We are making good progress towards our key strategic ambitions, taking market share in our core regions and investing in our infrastructure to build a world class operational platform.

In line with our commitment to building a sustainable future for all, we are proud to report that over 16,500 lives were positively impacted by SThree in the first half of the 2021 financial year. We significantly strengthened our position as talent providers to the low carbon transition and grew our renewables business by 37% in the first half of 2021 compared to HY 2020.

The momentum built across the first half has continued into current trading, with strong KPIs on new placement activity and contractor retention rates; consequently, we now anticipate we will be ahead of current market consensus expectations for FY 2021.

As previously communicated, we remain mindful of changing contractor behaviour and annual leave backlogs in the second half. We will be increasing investment in our people and our "go-to-market" proposition in the coming months, which, although crucial in driving our long-term success, will impact on productivity in the short term. Nevertheless, we continue to be focused on the execution of our strategy, whatever the external circumstances, and remain fully committed to the ongoing delivery of the long-term ambitions for all of our stakeholders."

Analyst conference call

SThree is hosting a webinar for analysts today at 09:30 GMT. If you would like to register for the webinar, please contact SThree@almapr.co.uk

A video overview of the results from the CEO, Mark Dorman, and CFO, Alex Smith, is available to watch here: https:// bit.ly/STEM_H1_overview

SThree will issue its Q3 trading update on 13 September 2021.

Enquiries:

SThree plc +44 7825122523

Rebecca Matts, Group Communications Director r.matts@sthree.com

Alma PR 020 3405 0205

Susie Hudson Sthree@almapr.co.uk

John Coles

Notes to editors

SThree plc brings skilled people together to build the future. It is the only global pure-play specialist staffing business focused on roles in Science, Technology, Engineering and Mathematics ('STEM'), providing permanent and flexible contract talent to a diverse base of over 9,000 clients in 14 countries.

The Group's c.2,600 staff cover the Technology, Life Sciences, Engineering and Banking & Finance sectors.

SThree plc is quoted on the Premium Segment of the Official List of the Financial Conduct Authority under the ticker symbol STEM and also has a US level one ADR facility, symbol SERTY.

Important notice Certain statements in this announcement are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by those statements. Forward looking statements regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. Certain data from the announcement is sourced from unaudited internal management information and is before any exceptional items. Accordingly, undue reliance should not be placed on forward looking statements.

Chief Executive Officer's STATEMENT

We are proud to deliver a strong set of first half results. Our purpose of 'bringing skilled people together to build the future' and our strategy, positioned at the centre of the secular trends of STEM and flexible working, enabled us to deliver a strong performance despite the ongoing uncertainty in the external environment. It is evident from our performance that we have the right strategy, are in the right markets, and our teams are executing well against our strategy. I would like to take this opportunity to sincerely thank our people, who have persevered despite the circumstances to achieve these results.

We continue to implement a number of strategic initiatives including strengthening our leadership capability and building diversity and inclusion across the business, in line with our focus on finding, developing and retaining great people. At the same time, we are investing in our technology infrastructure, our marketing and communications team and our go-to-market positioning, as part of our strategy to create a world-class operational platform. Our core purpose guides the business and therefore our position as a responsible business is central to all we do; I am pleased to provide further details on progress against our ESG commitments in this report.

(MORE TO FOLLOW) Dow Jones Newswires

July 19, 2021 02:00 ET (06:00 GMT)

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Financials
Sales 2021 1 348 M 1 842 M 1 842 M
Net income 2021 39,6 M 54,1 M 54,1 M
Net cash 2021 56,5 M 77,2 M 77,2 M
P/E ratio 2021 20,5x
Yield 2021 1,63%
Capitalization 811 M 1 108 M 1 108 M
EV / Sales 2021 0,56x
EV / Sales 2022 0,50x
Nbr of Employees 2 600
Free-Float 90,8%
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Mean consensus BUY
Number of Analysts 7
Last Close Price 602,00 GBX
Average target price 636,43 GBX
Spread / Average Target 5,72%
EPS Revisions
Managers and Directors
Mark Dorman Chief Executive Officer & Director
Andrew William Beach Chief Financial Officer & Director
James Daniel Bilefield Non-Executive Chairman
Denise Collis Independent Non-Executive Director
Anne Kathleen Fahy Non-Executive Director
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