Gary Elden, newly appointed CEO of UK-headquartered international recruitment group SThree, (see SThree accelerates CEO transition) took a pragmatic view of the company’s prospects for 2013: “Whatever 2013 has in store for us … we will make the best of it.” And very much making the best of it is what the company has been doing since launching its original business, Computer Futures back in 1986. Since then, SThree has transformed itself from a UK ITSA (IT staff agency) to a truly international (non-UK is now 65% of gross profit), multidiscipline (non-ICT is now 46% of gross profit) recruitment operation.
Taken in the context of another tough year, SThree’s FY results (to 25th Nov. 2012) were very respectable. Headline revenues grew by 6% (all organic) to £577m and they managed to hold gross margins (net fee income) steady at 36%. However, lower consultant utilisation took operating margins down from 5.5% to 4.3% leaving pre-tax profit light 17% at £25.3m. Revenues from SThree’s ICT businesses inched up 1% to £378m, but gross margins slipped back a couple of points to 29%. In very stark contrast, revenues from non-ICT operations jumped 18% to £199m, with gross margins steady at 47%.
If Elden can do as good a job of ‘making the best of it’ in a downturn as his predecessor, Russell Clements, then imagine how well it might go for SThree when times are not so tough!