REG - SThree plc - FY25 Half Year Trading Update

SThreeAnnouncement

Tue 07:00

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RNS Number : 0667O  SThree plc  24 June 2025

24 June 2025

 

SThree plc

 

FY25 Half Year Trading Update

 

 Steady performance with modest improvement through the half

 

SThree plc ("SThree" or the "Group"), the global STEM workforce consultancy,
today issues a trading update for the half year ended 31 May 2025.

 

H1 Highlights

 

 ·             Group net fees down 14% YoY((1)),( )reflecting a modestly reduced rate of
               decline in Q2 underpinned by an improved US performance.
 ·             Contract (84% of net fees) down 14% YoY, whilst Permanent down 13% YoY.
 ·             Contractor order book((2)) of £164 million, down 8% YoY, continuing to
               represent sector-leading visibility with the equivalent of circa five months'
               net fees.
 ·             £20 million share buyback programme successfully completed on 15 May 2025.
 ·             Robust balance sheet with net cash of £48 million at 31 May 2025 (28 February
               2025: £45 million). Excluding the impact of the share buyback, net cash is up
               £15 million since Q1 largely reflecting improved cash collection.
 ·             Technology Improvement Programme (TIP) remains on track and on budget, with
               four additional markets onboarded in Q2, bringing the total actively using the
               platform to 8 out of 11 markets representing over 80% of Group net fees.
 ·             Realisation of further operational efficiencies to drive £6 million of
               in-year net savings on track.
 ·             Performance for FY25 expected to be in line with previously announced £25
               million PBT guidance((3)).

 

Timo Lehne, Chief Executive, commented:

 

"Whilst market conditions remain challenging, the Group delivered a stable
first half performance, with a modest sequential improvement
quarter-on-quarter. Strong Contract extensions continue to underpin
performance, providing sector-leading visibility and reflecting our customers'
priority to retain critical STEM skills. We continue to drive operational
enhancements to ensure we are well positioned in the best STEM markets and
skill verticals, including our internal and go-to-market initiatives in the US
which are starting to bear fruit with positive momentum in the region, in line
with our expectations. In addition, we are making good progress with the
realisation of operational efficiencies, on track with our FY25 plans.

 

Our global TIP rollout is progressing across the Group, with 8 of our 11
markets now onboarded, embedding cutting-edge technology more deeply within
our organisational fabric - from process automation to drive efficiencies to
bespoke AI-enabled tools to accelerate scale. Whilst we are pleased with the
early benefits we are seeing, the implications of TIP on our mid-to-long term
opportunity are significant, equipping us with the capability to develop,
integrate and launch new functionality at pace and unlock richer insights.
 

 

As we look forward to an improvement in market conditions, we remain confident
in our belief that global megatrends, such as technological advancements and
demographic shifts, will continue to shape the future world of work. With our
agile, future-ready technology infrastructure, coupled with a robust business
foundation, deep industry networks, and a specialist STEM focus, we are well
placed to guide clients through the evolving workforce landscape. We are ready
for the opportunities that lie ahead."

 

Business performance highlights

 

In light of the ongoing challenging trading environment, the Group's net fees
declined by 14% YoY in the first half, reflecting continued softness in new
business across Contract and Permanent. This was partially offset by strong
contract extensions. Compared to Q1 FY25, the Contract segment showed
sequential improvement in Q2 underpinned by the performance from the USA.

 

The Group's Engineering net fees were down 9% against a record prior year
performance, whilst Life Sciences net fees were down 15% YoY. Technology
declined 18% YoY reflecting the continued tough market conditions.

 

Regionally, the challenging macro-economic conditions resulted in declines
across the Group's three largest markets in the first half, which together
represent 72% of net fees. Encouragingly, the USA showed positive momentum
with its Q2 performance recovering to prior year levels, supported by strong
demand for roles in Engineering. Meanwhile, the performance in
Germany primarily reflected levels of demand for Technology skills, whilst in
the Netherlands, results were affected by reduced demand for Engineering and
Technology skills, compared with strong prior-year comparators, including a
record performance in Engineering.

 

Group period-end headcount was down 10% from the end of the last financial
year attributable to the careful management of natural churn, whilst being
highly selective about where we choose to hire, and the early realisation of
further operational efficiencies.

 

 

                                  H1        H1            H1 2025              Q2 2025           Q1 2025
 Net fees                         2025      2024          YoY ((1))            YoY ((1))         YoY ((1))
 Contract                         £133.8m   £158.7m       -14%                 -13%              -15%
 Permanent                        £25.2m    £30.0m        -13%                 -13%              -13%
 GROUP                            £159.1m   £188.7m       -14%                 -13%              -15%

 Regions
 DACH ((4))                       £53.2m    £64.2m        -15%                 -16%              -14%
 Netherlands (incl. Spain) ((5))  £32.1m    £41.1m        -20%                 -24%              -16%
 Rest of Europe ((6))             £25.7m    £31.3m        -17%                 -17%              -18%
 USA                              £39.4m    £41.8m        -5%                  -                 -9%
 Middle East & Asia ((7))         £8.7m     £10.3m        -10%                 9%                -26%
 GROUP                            £159.1m   £188.7m       -14%                 -13%              -15%

 Top five countries
 Germany                          £47.0m    £56.0m        -14%                 -14%              -13%
 Netherlands                      £28.6m    £37.5m        -22%                 -26%              -18%
 UK                               £14.2m    £20.0m        -28%                 -27%              -30%
 USA                              £39.4m    £41.8m        -5%                  -                 -9%
 Japan                            £5.4m     £4.8m         13%                  34%               -7%
 ROW ((8))                        £24.6m    £28.6m        -12%                 -13%              -12%
 Group                            £159.1m   £188.7m       -14%                 -13%              -15%

 Service mix                      H1 2025   H1 2024
 Contract                         84%       84%
 Permanent                         16%       16%

 Skills mix                       H1 2025   H1 2024
 Technology                       45%       48%
 Life Sciences                    17%       17%
 Engineering                      30%       29%
 Other                            8%        6%

 

 

 

((1)) All YoY growth rates expressed at constant currency.

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

((3)) As guided on 12 December 2024, the Board expects FY25 profit before tax
to be c.£25 million.

((4)) DACH - Germany, Austria and Switzerland.

((5)) Netherlands (incl. Spain) - Netherlands and Spain, which is managed from
the Netherlands.

((6)) Rest of Europe - UK, Belgium, France.

((7)) Middle East & Asia - Japan and UAE.

((8)) ROW - All other countries we operate in.

 

 

 

 

Analyst conference calls

 

As announced in the FY25 Q1 Trading Update, SThree will now host analyst
conference calls in conjunction with its Q1 and Q3 Trading Updates, and Half
Year and Full Year results.

 

 

Forward looking dates

 

The Group will issue its FY25 Half Year Results for the six months ended 31
May 2025 on 29 July 2025.

 Enquiries:

 SThree plc
 Timo Lehne, CEO                                  via Alma

 Andrew Beach, CFO

 Keren Oser, Investor Relations Director

 Charlie Hildesley, Investor Relations Manager

 Alma Strategic Communications                   +44 20 3405 0205

 Rebecca Sanders-Hewett                          SThree@almastrategic.com

 Hilary Buchanan

 Sam Modlin

 Will Ellis Hancock

 

 

 

Notes to editors

SThree plc brings skilled people together to build the future. We are the
global STEM workforce consultancy, placing highly skilled, STEM specialist
workers in the industries where they are needed most. We advise businesses,
build expert teams, and deliver project solutions for our clients. With more
than 38 years of experience in pure-play STEM and a global team with local
expertise across 11 countries, we cover high-demand skills across Engineering,
Life Sciences and Technology roles.

 

We provide permanent and flexible contract talent to a diverse base of around
6,000 clients. By combining advanced technology with expertise, we push beyond
traditional boundaries to deliver tailored solutions, leveraging data and
insight from our world-class operating platform.

 

Outpace tomorrow, together

 

 

 

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.

 

 

 

 

 

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