SThree PLC (LON:STEM) said the underlying performance in its business has improved during the year despite the third quarter seeing a larger decline in net fees than the second as the coronavirus (COVID-19) pandemic continued to have an impact.
The recruitment firm - which focuses on science, technology, engineering and mathematics - said its net fees slid by 14% to £75mln in the three months to August 31, 2020, compared to the same period in 2019, while in the quarter to June 30, 2020, they were down 12%.
READ: SThree half-year profits tumble due to pandemic and investment
However, the company noted that its order book had risen by 1% since end-June, while it saw increased sales activity levels and contractor retention levels.
As a result, the firm brought back all of its staff from furlough, with previously claimed furlough support from the UK government of £600,000 to be repaid, while it has also repaid a £50mln revolving credit facility drawn down at the beginning of the lockdown period but not utilised.
As of August 31, 2020, SThree had £39mln in the bank – compared to £12mln net debt a year ago – with total accessible liquidity of £144mln.
Analysts at house broker Liberum raised the target price to 420p from 385p and said Sthree remains their top pick amongst the recruiters, given its differentiated business model.
Shares rose 3% to 253.62p on Monday morning.
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