Specialist staffing business SThree Plc (STHR.L) Friday said it expects full year results to be in line with market view, despite highly challenging market conditions. The company also said it sees a 23% decline in gross profit for the full year, and will take an exceptional charge related to the rightsizing of the group in the first half. SThree shares are currently trading up nearly 5% on the London Stock Exchange.
SThree expects gross profit for the full year of about £168 million, down 23% from £218.9 million a year ago. The company said full year results will include an exceptional item of £9.0 million related to the rightsizing of the group in the first half.
SThree closed the year with 4,157 contract runners, down 27.7% year on year but broadly level with the end of third quarter position of 4,190 runners. Average contractor gross profit per day rates have been stable in the fourth quarter compared to the third quarter.
The company made 6,060 permanent placements during the year, down 40.8% from 10,236 last year. Average placement fees for the year overall have remained strong, despite the volume decrease, with some sequential improvement in the fourth quarter versus prior quarter.
For the full year, non-UK gross profit represents 55% of the company's gross profit, up from 45% a year ago. Contract gross profit now represents 57% of gross profit, higher than 52% a year earlier, and non-ICT represents 28%, compared to 23% in the previous year.
SThree reported progress in debtor management in the year, with a reduction in days sales outstanding to 37 days compared to the closing position at November 30, 2008 of 43 days, along with a further improvement in the ageing of the debtors book.
At the end of the year, the company's net cash has increased to about £48 million from £24.6 million in the prior year. Additionally, the group has recently signed a 30 month invoice discounting facility with Royal Bank of Scotland, for £20 million of committed financing.
As at November 29, the company's total headcount declined 29.8% to 1,597 from 2,274 last year, whereas up 6.0% from the third quarter, as stabilising market conditions have supported selective rehiring.
SThree opened an additional office in Frankfurt and new offices in Duseldorf, Hamburg, Stuttgart, Marseille, and Singapore during the year, and expects further expansion in international footprint next year.
The company expects to announce preliminary results for the full year on February 1, 2010.
STHR is currently trading at 258.70 pence per share, up 4.52%, on the London Stock Exchange.
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