REG - SThree plc - FY25 Half Year Results
Tue 07:00
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RNS Number : 8887S SThree plc 29 July 2025
STEADY PROGRESS ACROSS H1, FULL YEAR GUIDANCE REAFFIRMED
SThree plc ('SThree' or the 'Group'), the global STEM workforce consultancy,
reports its financial results for the six months ended 31 May 2025.
FINANCIAL HIGHLIGHTS
H1 FY25 H1 FY24 Variance
Reported Like-for-like ((1))
Revenue (£ million) 648.8 763.4 -15% -14%
Net fees (£ million) 159.1 188.7 -16% -14%
Operating profit (£ million) 10.0 37.7 -73% -72%
Operating profit conversion ratio 6.3% 20.0% -13.7% pts -13.4% pts
Profit before tax (£ million) 10.1 39.0 -74% -72%
Basic earnings per share (pence) 5.6 21.2 -74% -72%
Interim dividend per share (pence) 5.1 5.1 - -
Net cash (£ million)((2)) 47.8 90.0 -47% -47%
HALF-YEAR HIGHLIGHTS
· The Group delivered net fees of £159.1 million, down 14% YoY(()(3)),
with a modest sequential improvement quarter-on-quarter during Q2, against the
backdrop of persistent challenging market conditions.
o Net fees across our three largest countries represent 72% of Group net
fees, with Netherlands down 22%, Germany down 14% and USA down 5%.
· Contract net fees, which represent 84% of Group net fees (H1 FY24:
84%), were down 14% as continued softness in new business activity was
partially offset by strong contract extensions; modest sequential
quarter-on-quarter improvement delivered during Q2, underpinned by an improved
US performance.
· Permanent net fees, whilst declining 13% YoY due to tough market
conditions across most of our regions, achieved a sequential improvement
compared to FY24 driven by growth in the US and Japan.
· Contractor order book((4)) of £163.8 million, down 8% YoY with a
reduced rate of decline versus FY24 year-end, continues to represent
sector-leading visibility with the equivalent of circa five months' net fees.
· Profit before tax (PBT) of £10.1 million (down 72% YoY) as the
challenging economic conditions continue to impact net fees, partially offset
by disciplined management of operating costs.
· £20 million share buyback programme launched in December resulted in
a total of 7.8 million shares being purchased and subsequently cancelled
during H1 FY25.
· Robust balance sheet with net cash of £47.8 million at 31 May 2025
(FY24: £69.7 million). Excluding the impact of the share buyback, net cash is
up £15 million since Q1 largely reflecting improved cash collection.
· Interim dividend maintained at 5.1 pence (H1 FY24: 5.1 pence) per
share, underpinned by the strength of our balance sheet and strong track
record of cash generation.
· Technology Improvement Programme (TIP) remains on track and on
budget, with 8 out of 11 markets actively using the platform representing over
80% of Group net fees.
OUTLOOK
· New business remains soft however we are seeing pockets of improving
momentum in certain segments and markets, including in US and Japan where
initiatives to improve market positioning are gaining traction.
· Realisation of further operational efficiencies to drive £6 million
of in-year net savings remains on track.
· Performance for FY25 expected to be in line with previously announced
£25.0 million PBT guidance((5)).
((1)) Variance compares reported H1 FY25 against reported H1 FY24 on a
constant currency basis, whereby the prior financial period foreign exchange
rates are applied to current and prior financial period results to remove the
impact of exchange rate fluctuations.
((2)) Net cash represents cash and cash equivalents less borrowings and bank
overdrafts and excluding leases.
((3)) All YoY growth rates in this announcement are expressed at constant
currency.
((4)) The contractor order book represents value of net fees until contractual
end dates, assuming all contractual hours are worked.
(5)) As guided on 12 December 2024, the Board expects FY25 PBT to be c.£25
million.
Timo Lehne, Chief Executive Officer, commented:
"The Group delivered a stable performance in the first half of the year
against a persistently challenging market environment. Whilst overall new
business activity remains soft, the continued necessity for critical STEM
skills is evidenced by our robust Contract extensions and we have seen some
improved momentum within our focused markets and skills mix, such as the US
and engineering.
"We have made significant progress in preparing our business for when market
conditions improve and to align with structural opportunities. We now have
over 80% of our business transacting through our end-to-end, integrated
technology infrastructure as a result of the TIP rollout, helping to drive
operational efficiencies and enhancing our ability to scale. Across the US and
Germany, we are already seeing reductions in time to first interview and
productivity improvements in our most junior consultants, two key metrics when
we set out on this journey. In just the last six months, we've launched 60 new
product enhancements and continue to develop five key features powered by AI.
This shows that we are now able to innovate at pace, with the foundations to
unlock rich data insights and layer in new, future-ready functionality.
"We enter the second half of the year in line with expectations. We are
building an organisation fit for purpose, which, combined with our industry
experience, deep networks and strong commercial footing, means we look ahead
to the future with confidence."
Analyst conference call
SThree is hosting a webinar for analysts and investors today at 08:30 BST to
present the Group's results for the six months ended 31 May 2025. If you would
like to register for the conference call, please
contact SThree@almastrategic.com (mailto:SThree@almastrategic.com) .
Forward looking dates
The Group will present its Q3 FY 25 Trading Update on 16 September 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 (mailto: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.
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
Introduction
The Group recorded a steady performance for the first six months of the year,
with our Contract business delivering a modest sequential improvement in Q2,
despite a challenging market environment. Our specialist STEM expertise and
Contract focus continue to underscore our strong strategic position. Robust
Contract extensions partially offset weak new business activity, again
evidencing our clients' priority to retain critical STEM skills through-cycle
and underpinning the sector-leading visibility of our resilient business
model.
Three years ago, we started laying the groundwork to re-architect our
organisation with state-of-the-art digital infrastructure through our
Technology Improvement Programme (TIP). In doing so, we have unlocked seamless
enterprise-wide collaboration and data flow, while creating the foundation to
layer-in new functionality and next-generation tools at pace. Today, 8 out of
our 11 global markets, representing over 80% of Group net fees, are now
equipped with these capabilities - fully standardised across a single
end-to-end technology platform, from order-to-cash. Whilst it has been a big
effort for our teams and not without challenges, we firmly believe that this
ground-up approach has enabled us to embed agile, connected and future-ready
technology deep within all aspects of our organisation, unencumbered by legacy
systems.
In particular, the TIP gives us the scope to enable rapid scaling of our
resilient, but complex, Employed Contractor Model (ECM) solution, which
continues to outperform the Independent Contractor model. The potential of TIP
across our business, combined with our specialism and scale, provides strong,
first-mover competitive differentiation.
Market and Positioning
The prolonged uncertainty we have seen across global markets for the last
three years has impacted overall investment levels in our end markets, with
delayed decision-making continuing to be the default strategy of business
leaders in a risk averse climate. This market context has persisted longer
than many had initially anticipated, however, we nonetheless expect this
extended cycle to eventually subside and investment to resume. When this
confidence returns, we are well-placed to meet this market demand. We have
taken this time to prepare for the future, enhancing our value proposition and
improving our service delivery, to ensure that when the market turn occurs, we
are in a strong position to capitalise on it. Our conviction continues to be
that STEM skills will build the future in the industries we serve, and these
skills remain particularly well aligned to our Contract model.
Extending the lens further beyond economic cycles, the rapid availability of
new technologies, including generative AI and machine learning, is driving
more fundamental changes on a longer-term horizon, both in terms of the
markets we serve and the broader sector within which we operate. Examining
this key market dynamic in detail, we believe we are well-placed:
Digital transformation of our customers' industries: Helping our clients build
a strong talent bench for the future
Organisations of all sizes are reimagining their business models and
workforces. They are now faced with making smart and strategic decisions to
ensure they have the skills and expertise needed to compete in an AI future.
In other words, striving to become what Microsoft labels a 'Frontier Firm',
one that blends machine intelligence with human judgement to scale rapidly,
operate with agility and generate value faster.(1)
We have long recognised that structural megatrends, including technological
advances, will shape the workforce of the future, and we have deliberately
placed our focus at the heart of this opportunity. The talent pool remains
tight, with a recent Microsoft study reporting that "78% of leaders are
considering hiring for AI-specific roles to prepare for the future - and that
jumps to 95% for Frontier Firms."(1) For most organisations, they are only
at the start of their transformation journey(2) - and it is here where we help
clients build a workforce infrastructure that underpins AI innovation across
roles and across industries. Our Technology focus is on connecting our clients
across a wide range of industries with the 'heavy-lifting' skills that will
enable them to prepare their processes and data to effectively adopt and
benefit from AI tools. Leveraging the relationships and networks we have
established over decades, we understand where skill gaps are and how to close
them meaning we are well placed when general market confidence returns.
Digital transformation of our industry: Delivering a high-value strategic
service through tech-enabled expertise
Digital transformation including advancements in AI, is also reshaping the
industry of staffing, bringing with it opportunities, including an ability to
deliver enhanced client and candidate services and drive efficiencies, but
also challenges, particularly acute for businesses lacking the scale to
support digital investment, and which operate within the high volume,
transactional segments of the market.
For SThree, our scale, digital capabilities and workforce solutions mean we
are ideally positioned to not only keep pace with this evolving landscape but
lead the future of the industry. We have long provided more than transactional
staffing to our customers. We are a workforce consultancy with a suite of
resourcing solutions, from compliance services, project solutions and
workforce structuring, to the management of c.9,000 contractors from 11
countries on behalf of our clients. We specialise in high-value, complex,
flexible talent where our consultative approach adds the most value and where
human expertise, supported by digital tools, remains essential to the delivery
of quality at pace. By combining our deep niche expertise, scale, and strong
networks with digital capabilities, we are positioned to innovate faster,
scale more efficiently, and deliver a more seamless experience to our clients
and candidates in the industries we serve, such as energy, engineering, public
sector, financial services and pharmaceuticals.
Strategy Execution
In our ambition of building SThree as the global STEM workforce consultancy,
we pursue our opportunity through clearly defined strategic pillars. As part
of our ongoing evolution, we took the decision to reassess the alignment of
our growth pillars to our business strategy and have introduced a fifth
strategic pillar to support our execution. In addition to our Places,
Platform, Proposition and People, we will now also be reporting our strategic
progress against our Customer pillar - helping to hone our focus as we look to
grow market share by engaging existing and new clients and candidates who
value specialism at scale. We believe that these pillars work together
synergistically to unlock our full growth potential.
Places
Our market reach remained consistent in the period, with an active coverage of
11 countries which align to the best STEM markets. We continually assess our
footprint across geography, skills verticals and market positioning under our
'Market Investment' framework to fine-tune our operations to ensure we are
fully ready to capitalise on key STEM markets. Since early 2023, we have been
actively shifting towards a more globally diverse footprint, with increased
emphasis on the USA and APAC regions, ensuring we are strategically positioned
to capture the significant global growth potential.
An example of this are the internal and go-to-market initiatives we rolled out
in our US business in the prior year in anticipation of the market rebounding
earlier than other regions. Initiatives included targeted investment in core
skills verticals to rebalance our portfolio, bolstering our Permanent offering
and refining our go-to-market strategy in the region. The value derived from
these efforts is evident in the early positive momentum we experienced through
the period, with the Q2 performance recovering to prior-year levels,
underpinned by a strong performance in our engineering skills vertical.
Platform
H1 marked another chapter in our TIP journey, both in terms of the maturity of
our technology infrastructure and its measurable impact across the business.
In addition to the ongoing roll-out of TIP across new markets (Netherlands,
France, Austria, Switzerland, Spain), our focus in the period was on feature
development, platform scalability, and AI integration. In the past six months,
we have delivered 60 new feature releases, including two new AI-enabled
solutions, demonstrating a step change in the pace of our delivery capability.
This included the launch of Summary AI and client timesheet verification (COT)
AI - each designed to streamline key recruitment and operational workflows,
improve consultant effectiveness, and automate high-volume manual tasks such
as timesheet validation and candidate documentation. The progress highlights a
sustained rhythm of high-value platform evolution and a step-change in the
pace of functionality delivery, representing many multiples of the releases we
could previously deliver over the course of a year.
As anticipated, this is driving the initial wave of efficiency gains with
£6.5 million of annualised savings achieved to date. The new platform has
enabled end-to-end digitalisation and automation of our order-to-cash process,
allowing us to radically simplify and streamline our back and middle office
operations. By integrating previously fragmented workflows into a unified
platform with embedded automation and straight-through processing, we have
materially reduced the need for manual intervention, rekeying of data, and
exception management. We are also benefiting from enhanced data and reporting
capabilities that drive faster and more impactful decision making reducing the
need for sales management layers.
Importantly, we are also seeing early but compelling signs of commercial
upside - the second wave of benefits to materialise. Across the markets that
have benefited from more time to adopt the new tools, US and Germany, we have
seen a 34% reduction in time to first interview as well as improved
placement productivity levels for our most junior cohorts. This is significant
and, whilst it is difficult to attribute enhancements in placement
performance, our analysis prior to TIP indicated that productivity of our
junior 0-24 month cohort was largely unaffected by the trading environment
suggesting that our systems transformation is directly enabling improved sales
outcomes. In the US and Germany, we saw a productivity improvement for our
0-24 month cohort of 32% and 5% respectively in H1. Moreover, the platform's
ability to capture structured data across each stage of the value chain is
providing us with powerful new levers for optimisation, predictive analytics,
and dynamic resource allocation.
Looking ahead to H2, we are maintaining strong momentum as we complete the
global rollout, comprising Germany ECM, Belgium, Dubai, and Japan. Over 20 new
platform enhancements are already in development, including two
next-generation AI tools, designed to support consultants in opening new
opportunities and maximising their networks, another key step in embedding
intelligence into the workflow. We have started to show that the TIP is not
just delivering functional improvements but is also beginning to unlock
commercial and operational upside, particularly where maturity, adoption, and
leadership alignment are strong. As we continue to scale globally, we remain
confident that the TIP will be a key driver of high-margin growth, structural
efficiency, and sustained competitive advantage.
Proposition
It has been a busy and productive H1 building our brand positioning. We took a
meaningful step forward in this journey with our go-to-market branding
refresh, which brought further clarity to our market position as a trusted
strategic partner providing workforce solutions. We tied each of our seven
go-to-market brands closer together as part of the wider SThree family -
unlocking value by leveraging the collective power of our STEM expertise and
global network while retaining a clear focus and specialism behind each brand.
In practice, this means that alongside a new consistent look and feel, each
brand will now be endorsed by the parent brand, SThree. We have seen good
initial reception from our customers and partners, and we believe this will
further support our ambition to be the authority in the STEM world of work.
In addition, we launched our inaugural STEM Skills Index(3), a data-led index
of nations ranked on their ability to cultivate, retain and apply STEM
expertise. Developed by SThree in partnership with the Centre for Economics
and Business Research (Cebr), the Index identifies which countries are leading
in STEM and which risk being outpaced, as well as a detailed view of where the
world's most capable STEM workforces are emerging and where critical gaps
remain. Since its launch, the Index has formed a cornerstone of SThree's
thought leadership, as well as proving a valuable tool for our consultants to
engage clients in data-led conversations around workforce capability, STEM
talent strategy, and long-term planning.
Customers
We have long placed clients and candidates at the heart of everything we do,
by building exceptional customer experiences and adapting our service lines to
meet evolving market needs and preferences. In line with our refreshed
go-to-market branding, we have now introduced our new Customer pillar, which
crystalises our strategy to drive revenue growth through deeper client
engagement and strong candidate relationships. Supported by our TIP, new
brand positioning and team development, we are now more aligned and joined up
as an organisation than ever before to improve and develop our service
proposition and build our position as a strategic STEM workforce partner.
In terms of our enterprise clients, we continue to drive closer collaboration,
and this is evidenced by an increased level of client meetings compared to
last year. Our overall performance continues to be influenced by a high
proportion of SME clients within our global client base, which tends to be
more volatile through economic cycles. As a result, we are focused on
balancing our portfolio with a push into the larger enterprise space, through
our Global Client Strategy, focused on creating a consistent and standardised
approach of growing our key strategic accounts and the way we partner with
them. We are making good progress, with the performance of our top client
cohort particularly encouraging.
For our candidates, we are focussed on building long-term relationships,
working to connect specialist with dynamic organisations. Developed over
decades, our deep network is built through multi-channel campaigns including
industry events, thought leadership and digital marketing. To support our
candidate initiatives, we are continuing to innovate our systems and processes
to improve and streamline candidate user experience.
People
The full potential of the exciting changes we are making lies in the hands of
our people. From the outset of the TIP, we have paired our technology
implementation with investment in people, fostering a culture of acceptance
and continuous learning. We continue to roll out global training across our
systems and new ways of working, and we are pleased to see strong uptake and
engagement which is working to drive greater levels of collaboration.
As part of our commitment to thinking big, we brought our sales efforts more
to the forefront of what we do, with a strategic shift towards driving a
high-performance culture. A natural next evolution in this journey was the
launch of two new performance frameworks across our sales function. These
frameworks are designed to leverage the Group's key assets, helping us work
smarter, build stronger relationships and deliver exceptional value. The first
framework is called AIR, which stands for Attitude, Input, and Results. It
provides a clear structure for how we measure performance across our sales
teams, with a strong emphasis on personal accountability. The second framework
is PACE, which stands for Prioritise with purpose, Accelerate progress,
Control the controllables, and Evaluate and energise. This framework sets out
the behavioural standards that support success and helps our teams create the
conditions they need to perform at their best. In H1, we trained all our sales
teams on our refreshed approach to performance, centred on using the tools,
culture, and capabilities we have built to lift everyone, together.
Delivering impact beyond our business
At the heart of our business lies a commitment to sustainability and long-term
positive impact. Despite economic fluctuations, we remain resolute in our
focus to delivering on our ESG commitments, which we regard as a fundamental
driver of long-term value creation. By embedding responsible practices
throughout our business, we are enhancing resilience and aligning with the
evolving expectations of our clients, candidates, and investors. Our
sustainable business practices and ESG commitments are demonstrated by:
· Our Net Zero ambition: We aim to achieve Net Zero across Scope
1, 2, and 3 emissions by 2050. As of FY24, we have reduced our carbon
emissions by 21% compared to FY19, our baseline year for our SBTi Net Zero
target.
· Gender diversity in leadership: Our targets align with the FTSE
Women Leaders Review, aiming for 40% female representation on the Board and in
leadership roles. As of H1, women represent 43% of our Board and hold 40% of
leadership positions.
· Ethnic diversity targets: In line with the Parker Review, we
have met and maintained our target of at least one Board member from an ethnic
minority background since 2024. We are also working towards 18% ethnic
minority representation in UK leadership by FY27, with current representation
at 17%.
· Growth in clean energy: Clean energy now accounts for 14% of
Group net fees and remains a key growth area for SThree. In the first half of
the year, our clean energy business grew by 6% YoY.
Current trading and outlook
Whilst mindful of wider macro uncertainty, we enter the second half in line
with market expectations for the full year. New business activity remains soft
however we are seeing some improving momentum in certain segments and markets,
including our US and Japan businesses, where our targeted initiatives to
enhance our market positioning are showing signs of traction. As previously
indicated, when markets recover more broadly we would expect to see our
permanent market to show the first signs of improvement given its upfront net
fee recognition profile, whilst the recovery in Contract net fees tends to be
smoother and from a higher overall level, reflecting the resilience of the
business model. In addition, we are making good progress with the realisation
of operational efficiencies, on track with our FY25 plans.
We continue to build a business ready for the future and to capitalise on the
underlying improvement we are seeing in pockets of our business. We are well
on our way to transitioning from an analogue model to a technology-enabled
one, unlocking scalable efficiencies while enhancing the experience for our
consultants, clients, and internal teams. This is particularly important as we
grow in complexity and volume - it gives us the agility and operating leverage
we require to support future expansion, both organically and through select
M&A. Combined with a robust financial position, resilient business model
and specialist STEM workforce value proposition, we are optimistic about our
long-term prospects.
Sources
(1) Microsoft, Work Trend Index Annual Report, 2025
(https://www.microsoft.com/en-us/worklab/work-trend-index/2025-the-year-the-frontier-firm-is-born)
(2) National Bureau of Economic Research (https://www.nber.org/papers/w32319)
(3) SThree STEM Index
(https://www.sthree.com/en-gb/insights-and-research/stem-skills-index/)
Group FINANCIAL AND OPERATIONAL REVIEW
Overview
Amidst the persistent challenging market conditions, Group net fees were down
16% YoY on a reported basis (down 14% on a like-for-like basis) reflecting the
continued softness in new business across Contract and Permanent. Strong
Contract extensions continued to underpin performance, reflecting our
customers' priority to retain critical STEM skills.
Our Contract business, which represents 84% of Group, saw net fees decline by
14% YoY on a like-for-like basis, with a modest sequential improvement
quarter-on-quarter underpinned by the performance from the USA. The contractor
order book closed at £163.8 million which, whilst down 8% YoY, continues to
provide sector-leading visibility with the equivalent of circa five months'
net fees. Permanent net fees were down 13% YoY on a like-for-like basis
impacted by tough market conditions across most of our regions, with
sequential improvement compared to the rate of decline reported in FY24
supported by growth in USA and Japan.
From a skill perspective, 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, our largest discipline, declined 18% YoY primarily
driven by the challenging global market conditions.
Overall, Group operating profit was £10.0 million (H1 FY24: £37.7 million),
down 73% on a reported basis (down 72% YoY on a like-for-like basis), driven
primarily by the decline in net fees across key markets, partially offset by
lower personnel costs (average headcount down 5% YoY), along with tight cost
management. Productivity in the first half was down 10% YoY as the rate of net
fee decline was higher than the rate of decline in average headcount. The
operating profit conversion ratio for the financial period reduced to 6.3% (H1
FY24: 20.0%).
Group net fees % of Group H1 FY25 H1 FY24 Variance
(£'000) (£'000)
Reported Like-for-like((1))
Geographical mix
DACH 33% 53,188 64,197 -17% -15%
USA 25% 39,378 41,841 -6% -5%
Netherlands including Spain 20% 32,108 41,121 -22% -20%
Rest of Europe 16% 25,661 31,311 -18% -17%
Middle East & Asia 6% 8,731 10,273 -15% -10%
Total 100% 159,066 188,743 -16% -14%
Skills mix
Technology 45% 72,227 90,153 -20% -18%
Engineering 30% 48,312 53,956 -10% -9%
Life Sciences 17% 26,410 31,618 -16% -15%
Other 8% 12,117 13,016 -7% -4%
Total 100% 159,066 188,743 -16% -14%
Service mix
Contract 84% 133,840 158,712 -16% -14%
Permanent 16% 25,226 30,031 -16% -13%
Total 100% 159,066 188,743 -16% -14%
(1) Variance compares reported H1 FY25 against reported H1 FY24 on a
constant currency basis, whereby the prior financial period foreign exchange
rates are applied to current and prior financial period results to remove the
impact of exchange rate fluctuations.
Business mix
The Group is well diversified, both geographically and by the skills we place
across multiple sectors. Our top three countries represent 72% of Group net
fees, with Germany accounting for 29%, USA 25% and Netherlands 18%.
Our Contract business declined by 14% on a like-for-like basis with continued
softness in new business partially offset by robust extensions, and continues
to represent 84% of the Group net fees. Our Permanent business, representing
16% of the Group, saw net fees decline 13% YoY, impacted by tough market
conditions across most of our regions. Our market invest model enables us to
continually review our markets to prioritise investments where we see
opportunities for growth and the strongest returns.
Within our skill verticals, Life Sciences declined by 15% and Technology by
18%, reflecting ongoing market uncertainty. Technology and Life Sciences now
represent 45% and 17% of Group net fees respectively. Engineering declined 9%
against a record prior year, and represents 30% of Group net fees.
Operational review by reporting segment
DACH (33% of Group net fees)
H1 FY25 H1 FY24 Variance
Performance highlights Reported Like-for-like
Revenue (£'000) 196,151 229,962 -15% -13%
Net fees (£'000) 53,188 64,197 -17% -15%
Average total headcount (FTE) 737 818 -10% n/a
· DACH is our largest region comprising businesses in Austria,
Germany and Switzerland, with Germany accounting for 88% of net fees. Net fees
declined by 13% YoY, with Contract down 12% and Permanent down 25%.
· Germany saw Contract down 10%, with overall net fees down 14%,
predominantly reflecting lower levels of demand for Technology skills (down
14%).
· Switzerland saw net fees decline 17% YoY driven by Technology,
down 23%.
· Austria net fees declined 31% YoY primarily due to reduced demand
for Technology roles.
USA (25% of Group net fees)
H1 FY25 H1 FY24 Variance
Performance highlights Reported Like-for-like
Revenue (£'000) 140,360 154,463 -9% -8%
Net fees (£'000) 39,378 41,841 -6% -5%
Average total headcount (FTE) 379 412 -8% n/a
· The USA is the world's largest specialist STEM staffing market
and our second-largest region on a net fee basis.
· USA saw net fees decline 5% YoY, but delivered a robust
quarter-on-quarter improvement despite the heightened market volatility
following the US administration's announcement of higher trade tariffs.
· Contract net fees declined by 9% YoY partially offset by an
exceptional performance in Permanent, up 34% YoY, owing to a recovery in
demand for roles across most of the skill verticals and our internal and
go-to-market initiatives gaining traction.
Netherlands including Spain (20% of Group net fees)
H1 FY25 H1 FY24 Variance
Performance highlights Reported Like-for-like
Revenue (£'000) 143,195 175,913 -19% -17%
Net fees (£'000) 32,108 41,121 -22% -20%
Average total headcount (FTE) 399 415 -4% n/a
· The region saw net fees decline by 20% YoY, with Contract down
19% and Permanent down 30%.
· Netherlands, the larger of the two countries in the region (89%
of net fees), generated net fees significantly lower than in the prior year,
down 22% YoY. This was primarily driven by reduced demand for Engineering and
Technology skills across both Contract and Permanent and strong prior year
comparators, including a record performance in Engineering.
· Spain traded broadly in line with the prior year, reflecting
stable demand for Technology roles, its main discipline, and 24% growth in
Engineering.
Rest of Europe (16% of Group net fees)
H1 FY25 H1 FY24 Variance
Performance highlights Reported Like-for-like
Revenue (£'000) 148,662 181,709 -18% -17%
Net fees (£'000) 25,661 31,311 -18% -17%
Average total headcount (FTE) 416 442 -6% n/a
· Rest of Europe comprises businesses in the UK, Belgium and
France, where market volatility remained high due to geopolitical tensions.
· Net fees declined by 17% YoY. Contract, which represents 97% of
net fees for the region, declined 17%, whilst Permanent declined 12%,
reflecting the tough market conditions.
· The UK, our largest country in the region (57% of net fees), saw
net fees down 28%, driven by reduced level of demand for Technology and
Engineering skills, down 34% YoY and 20% YoY respectively.
· Net fees for Belgium increased 15% YoY, while net fees for France
were down 8% YoY.
Middle East & Asia (6% of Group net fees)
H1 FY25 H1 FY24 Variance
Performance highlights Reported Like-for-like
Revenue (£'000) 20,454 21,357 -4% -2%
Net fees (£'000) 8,731 10,273 -15% -10%
Average total headcount (FTE) 220 193 +14% n/a
· Our Middle East & Asia business includes Japan and UAE, and
accounts for 6% of Group net fees.
· Net fees were down 10% YoY, with Contract down 17% and Permanent
down 7%.
· Japan, which represents 70% of the region, delivered an improved
performance for the period, up 13% YoY, driven by demand for Technology and
Engineering skills.
· Net fees in UAE were down 39% driven by lower levels of demand
across most of the skill verticals.
Chief financial officer's REVIEW
The Group delivered a stable first-half performance, with a modest sequential
improvement quarter-on-quarter. Total net fees declined 14% YoY on a
like-for-like basis, impacted by the continued soft new business activity,
partially offset by robust contract extensions.
Income statement
On a reported basis revenue for the half year was down 15% to £648.8 million
(H1 FY24: reported £763.4 million) while net fees decreased by 16% to £159.1
million (H1 FY24 £188.7 million). Our two main trading currencies, the US
Dollar and the Euro, weakened against Sterling when compared to the same
period last year, and had an overall negative impact of £2.7 million on the
total net fees. Therefore, when presented on a constant currency basis, the
net fees decreased by 14% YoY.
Net fees in our Contract business, which represented 84% of the Group net fees
for the half year (H1 FY24: 84%), declined by 14% on a like-for-like basis,
driven by the ongoing softness in new business but partially offset by
continued strong contract extensions. Across our core regions, DACH was down
12% YoY, predominantly reflecting lower levels of demand for Technology
skills. In the USA, Contract net fees, which now account for over 87% of the
region total net fees, were down 9% YoY, but displayed a strong
quarter-on-quarter improvement despite the heightened market uncertainty from
tariffs. Netherlands (including Spain) saw Contract net fee income decline by
19% YoY, driven by reduced demand for Contract roles in Engineering and
Technology. In the Rest of Europe and Middle East & Asia, Contract
performance was down 17% YoY. Skills-wise, Engineering was down 11% YoY, with
Life Sciences down 15% and Technology down 17%, reflecting tough market
conditions. The Group Contract net fee margin 1 (#_ftn1) remained broadly
consistent at 21.5% YoY (H1 FY24: 21.7%).
The contractor order book closed at £163.8 million, down 8% YoY, and accounts
for approximately five months' worth of net fees, providing us with good
forward visibility for the remainder of FY25. Under the Contractor model, net
fees are earned on a month-by-month basis, with the contractor order book
reflecting the value of net fees under contract but yet to be recognised.
During softer market conditions, this provides resilience with visibility over
contract fees as contracts run their course (contract 'finishers'). In a
market recovery context, the Board would expect the contractor order book to
gradually increase as and when new placements outpace finishers over a
sustained period through the year.
Permanent net fee income was down 13% on a like-for-like basis reflecting
market conditions across most regions. Our largest Permanent market, DACH,
reported a decline of 25%, driven by reduced demand for Technology roles.
Netherlands region was down 30% affected by decline in Engineering and
Technology, Rest of Europe down 12%, and Middle East & Asia down 7%. USA
reported an exceptional performance in Permanent and grew by 34% owing to a
recovery in demand for roles across most skill verticals. Permanent average
fees increased by 14% YoY in the period, with average permanent fee margin
(net fees as a percentage of salary) increased to 27.8% (H1 FY24: 27.3%).
Operating expenses were reduced by 1% YoY on a reported basis, despite
incurring additional costs to deliver future savings, and amounted to £149.1
million (H1 FY24: £151.0 million). Overall, the operating profit was £10.0
million (H1 FY24: £37.7 million), down 72% YoY on a like-for-like basis,
while the Group operating profit conversion ratio(1) decreased to 6.3% (H1
FY24: 20.0%) reflecting the protracted challenging economic conditions
impacting net fees, partially offset by disciplined management of operating
costs and the early realisation of further operational efficiencies. This
programme, previously communicated in December, is primarily focused on the
streamlining of operations through the removal of redundant back-office
positions and non-fee earner front-office management layers. Early
efficiencies achieved from the TIP, along with insights into its full
potential, gave the business the confidence to accelerate its implementation.
To date, we have made good progress and remain on track to deliver the £6
million in-year net savings target for FY25. Of this, £1.8 million has
already been achieved. Since most of the costs to deliver were incurred in the
first half of the year, we expect a natural uplift in savings in the second
half. The net currency movements versus Sterling were unfavourable to the
operating profit, reducing it by £0.7 million.
Net finance income
The Group generated a small net finance income of £0.1 million as compared to
net finance income of £1.3 million in the prior period. The YoY decrease was
driven primarily by lower surplus cash balances invested in the money markets,
as well as higher lease-related interest.
Income tax
The total tax charge for the half year on the Group's profit before tax was
£2.9 million (H1 FY24: £10.9 million), representing an estimated full-year
effective tax rate (ETR) of 28.5% (H1 FY24: 27.9%). The Group's ETR primarily
varies with the mix of taxable profits by territory, non-deductibility of the
accounting charge for Long-Term Incentive Plans and other one-off tax items.
Overall, the reported profit before tax was £10.1 million (H1 FY24: £39.0
million), down 72% YoY on a like-for-like basis and down 74% on a reported
basis.
The reported profit after tax was £7.2 million (H1 FY24: £28.1 million),
down 73% YoY on a like-for-like basis and down 74% on a reported basis.
Earnings per share (EPS)
The basic EPS was 5.6 pence (H1 FY24: 21.2 pence). The YoY movement is
attributable to the overall trading performance, partially offset by the
reduced weighted average number of shares, due to 7.8 million in shares bought
back and their immediate cancellation in H1 FY25. The diluted EPS was 5.5
pence (H1 FY24: 20.8 pence). Share dilution mainly results from various share
options in place and expected future settlement of vested tracker shares. The
dilutive effect on EPS from tracker shares will vary in future periods,
depending on the profitability of the underlying tracker businesses and the
settlement of vested arrangements.
Dividends and distributable reserves
The Board monitors the appropriate level of dividend, considering achieved and
expected trading of the Group, together with its balance sheet position. The
Board aims to offer shareholders long-term ordinary dividend growth within a
targeted dividend cover range of 2.5x to 3.0x through the cycle.
The Board has proposed to pay an interim dividend of 5.1 pence (H1 FY24: 5.1
pence) per share, amounting to £6.6 million in total and aligned with the
prior year level. It will be paid on 12 December 2025 to shareholders on the
register on 14 November 2025. The Board's decision to maintain the dividend
in-line with last year, reflects a considered assessment of the Group's future
outlook, underpinned by a robust balance sheet and a strong track record of
cash generation. It also underscores the Board's commitment to returning
surplus capital to shareholders where appropriate.
The Directors have determined that certain distributions, being the FY24
interim dividend paid 6 December 2024, the share buyback programme undertaken
December 2024 to May 2025, and the FY24 final dividend paid 6 June 2025
(together the "Relevant Distributions"), have been made without complying
fully with the technical requirements of the Companies Act 2006 (the "Act").
The Group as a whole has, at all times, had sufficient profits and other
distributable reserves to pay the Relevant Distributions, however the parent
company itself had insufficient distributable reserves at the time these
distributions were made. A course of action, consistent with the approach
taken by other listed companies that have historically encountered similar
issues, is therefore being followed to remedy this position without the
Company pursuing any rights that it may have to seek repayments of the
relevant funds. Resolutions will be proposed to shareholders as soon as
practicable, and further details will be provided in due course for approval.
The Board confirms the issue only impacts the prior Relevant Distributions
mentioned above, and there is no change to the financial outlook of the
Company as a consequence. The matter has no impact on the Company's intentions
or ability to continue returning capital to shareholders in line with its
capital allocation policy.
The Directors took action to remedy this technical issue by paying sufficient
dividends to the Company from its subsidiaries and by preparing interim
accounts (as defined in the Act) showing the requisite level of distributable
reserves/net assets and filing them at Companies House. Consequently, as
at the date of this announcement, the Company held distributable reserves in
excess of the amount required in respect of both the Relevant Distributions
and the known future committed capital returns in FY25, inclusive of the FY25
interim dividend announced today.
The Company's past accounts will not need to be restated and no repayments are
expected in respect of any dividends or the share buyback.
Liquidity management
In H1 FY25, cash generated from operations was £21.7 million (H1 FY24: £41.6
million). The decrease was primarily driven by lower EBITDA(1) due to
persistent challenging market conditions. Income tax paid decreased to £5.3
million (H1 FY24: £11.4 million) in line with the trading performance across
our markets.
Capital expenditure reduced to £4.5 million (H1 FY24: £5.0 million) as the
Group-wide Technology Improvement Programme (TIP) has reached its final stage,
with all developed assets brought to active use during the period. The capital
expenditure also included costs of certain leasehold improvements and
furniture/IT equipment purchases across our office portfolio.
The Group paid £6.9 million in rent including principal and interest portion
(H1 FY24: £7.1 million). Net interest income (excluding interest on lease
payments) was £1.0 million (H1 FY24: net interest income £1.7 million)
during the period. The Group spent £20.9 million (H1 FY24: £10.0 million) on
the purchase of its own shares, the majority of which related to the share
buyback programme and were subsequently cancelled.
Dividends payments were £6.8 million (H1 FY24 £0.5 million) comprising the
FY24 interim dividend paid in December 2024.
Foreign exchange had a negative impact of £0.1 million (H1 FY24: negative
impact of £2.9 million).
Overall, since the year end, the net cash declined to £47.8 million in H1
FY25 (FY24: £69.7 million) driven primarily by the share buyback programme.
Excluding the impact of the share buyback, net cash increased £15 million
since Q1 largely reflecting improved cash collection.
Accessible funding
The Group's capital allocation priorities are financed mainly by retained
earnings and cash generated from operations. The Group also has access to a
£50.0 million Revolving Credit Facility (RCF), a £30.0 million accordion
facility and maintains a substantial working capital position reflecting net
cash due to SThree for placements already undertaken. At the reporting date,
the Group did not draw down any of the above credit facilities (H1 FY24:
£nil), but any funds borrowed under the RCF would bear a minimum annual
interest rate of 1.2% above the benchmark Sterling Overnight Index Average.
On 31 May 2025, the Group had total accessible liquidity of £102.8 million,
made up of £47.8 million in net cash (H1 FY24: £90.0 million), the £50.0
million RCF and a £5.0 million overdraft facility (undrawn at the half-year
end).
Capital allocation
SThree remains disciplined in its approach to allocating capital, with the
core objective at all times being to maximise shareholder value. The Group's
capital allocation policy is reviewed periodically by the Board and was last
reviewed in July 2025:
- Balance sheet - our intention is to maintain a strong balance
sheet at all times to provide operational flexibility throughout the business
cycle.
- Dividend - we aim to pay a sustainable dividend, with a
commitment to a through-the-cycle dividend cover range of 2.5x to 3.0x of EPS.
- Deployment of capital prioritised in the order of:
1. Organic growth: investing in our people and ensuring sufficient
working capital on hand to fund growth in the contractor order book while
developing new business opportunities.
2. Business improvement: digitalising our business, putting in place
the technology and tools that are key to driving both scale and higher
margins.
3. Acquisitions: strict inorganic growth discipline, with a focus on
complementary and value enhancing acquisitions.
4. Capital return to shareholders: after all organic and inorganic
opportunities within an appropriate, time horizon have been assessed, further
cash returns to shareholders may be considered.
During the period, the Company returned approximately £20 million to
shareholders through its share buyback programme. This resulted in the
purchase and cancellation of 7.8 million ordinary shares at an average price
of 257 pence per share in the first half of the year.
PRINCIPAL RISKS AND UNCERTAINTIES
Risk management is a key part of our business, values and culture. Effective
risk management enables us to both protect the value of our business and to
proactively manage threats to the delivery of strategic and operational
objectives, while enhancing the realisation of
opportunities.
Our approach to risk management is flexible to ensure that it remains relevant
at all levels of the business, and dynamic to ensure we can be responsive to
changing business and macro-economic
conditions.
During HY25, there continues to be focus on the principal risks with oversight
of activities and controls to further mitigate these risks alongside
monitoring of key risk indicators to ensure any negative changes are
proactively addressed. We continue to make positive progress in risk
mitigation activities and continue to monitor the ongoing broader
macro-economic situation and assess the impact that this could have on
principal risks for the Group.
The principal risks and uncertainties that the Company expects to be exposed
to in the second half of FY25 are the same risks as those described in the
'Risk management' section of SThree plc Annual Report and Accounts FY24 (pages
82-89) with exception of the health and safety principal risk. Following
consideration and assessment, this has been removed as a principal risk and
will now be monitored through the functional and regional risk assessment
process. The principal risks which have changed from FY24 year-end are
detailed below. All other principal risks for the Group: Client strategy risk;
Contractual liability risk; People, talent acquisition and retention risk;
Regulatory compliance risk; and Strategic change management risk; remain
unchanged but with positive movement on mitigating activities.
Risk Mitigation Change from FY24 year end
Credit Risk (Updated) · Monitoring of disputes and identification of root causes to Updated Commercial relationship principal risk. Risk places additional focus
resolve. on the working capital requirements of the business.
SThree may suffer liquidity issues and/or financial loss due to difficulties
in collecting receivables from our clients. · Monthly cash collection targets with daily cash collection
reporting/monitoring.
· Regional Engagement Framework, including monthly
billing/collection meetings with regional management and finance.
· Regular review of Days Sales Outstanding (DSO).
Macro-economic · Enhanced monitoring of forecasts. Increased net risk position due to prolonged challenging macro-economic
environment and political uncertainty, impacting net fees across the majority
SThree suffers financial exposure as a result of rapid changes in the · Strategic focus on STEM and contract and diversification of of regions and skills verticals.
macro-economic environment. business.
· Regular tracking of sales activities.
· Country strategy reviews.
· Commercial and finance reviews of market conditions.
Industry Innovation · Strategic planning process. Net risk decreased due to review of effectiveness of controls in place.
SThree fails to keep pace with, and respond to, new disruptive business · Horizon scanning including attendance at industry events.
models, technology including AI, regulations, and market evolution, which
adversely impacts our financial performance, competitive advantage and future · Technology roadmap.
growth.
· Innovation workshops.
Data Privacy · Data privacy framework. Net risk increased as a result of a variety of factors, including increase in
regulatory enforcement climate.
SThree is at risk of suffering lost revenue, reputational damage and · Yearly mandatory data privacy training.
regulatory sanctions due to regulatory non-compliance and contractual failings
as it relates to its personal data protection obligations. · Data retention policy and processes.
· Data Subject Access Request (DSAR) processes.
Cyber Security · Information security framework. Net risk has increased as a result of the more volatile and complex external
cyber security threat landscape.
SThree suffers a serious system or third-party disruption, loss of data or · Incident management process.
security breach that disrupts business critical activities and its ability to
meet cyber/data protection obligations. · Yearly mandatory training.
· Phishing simulation testing.
· 24/7 Security Operations Monitoring.
· Vulnerability Management process.
Health and Safety · Group Health and Safety policy and global harmonised processes. Removed as a principal risk following holistic assessment of HS&E
obligations and risks across the business operations.
SThree fails in its duty of care for the health, safety and wellbeing of their · Monitoring of key risk indicators.
employees or placed contractor which leads to serious injury or death.
Global and local policies and procedures in place; this area will continue to
· Regular health and safety meetings. be carefully implements and monitored.
· Incident management and insurance.
· Yearly mandatory training.
The materialisation of our principal risks, either separately or in
combination, could have an adverse effect on the implementation of our
strategic priorities, our business model, financial performance, cash flows,
liquidity, shareholder value and other key stakeholders.
Please refer to our FY24 Annual Report and Accounts for further detail on our
risks, available at www.sthree.com/en/investors/financial-results/
(http://www.sthree.com/en/investors/financial-results/) .
DIRECTORS' RESPONSIBILITY
STATEMENT
The Directors confirm that to the best of their
knowledge:
(a) the condensed consolidated interim financial statements of
the Group have been prepared in accordance with IAS 34 Interim Financial
Reporting as adopted for use in the United Kingdom and give a true and fair
view of the assets, liabilities, financial position and profit or loss of the
undertakings included in the consolidation as a whole for the period ended 31
May 2025 as required by the Disclosure Guidance and Transparency Rules
sourcebook of the UK FCA (DTR) 4.2.4R; and
(b) the half-year results announcement includes a fair review
of the significant events during the six months ended 31 May 2025 and a
description of the principal risks and uncertainties for the remaining six
months of the financial year ending 30 November 2025 in line with the
requirements of UK FCA (DTR) 4.2.7R;
(c) the interim management report includes a fair review
of the information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein). The Directors of SThree plc are listed in
the SThree plc Annual Report and Accounts for 30 November 2024. A list of the
current Directors is maintained on the Group's website www.sthree.com
(http://www.sthree.com) .
The Group's condensed consolidated interim financial statements, and related
notes, were approved by the Board and authorised for issue on 28 July 2025 and
were signed on its behalf by:
Timo
Lehne
Andrew
Beach
Chief Executive
Officer
Chief Financial
Officer
28 July 2025
Condensed consolidated income statement
for the six months ended 31 May 2025
£'000 Note (Unaudited) (Unaudited)
Six months ended Six months ended
31 May 2025 31 May 2024
Continuing operations
Revenue 2 648,822 763,404
Cost of sales (489,756) (574,661)
Net fees 2 159,066 188,743
Administrative expenses 3 (148,499) (150,055)
Impairment losses on financial assets (603) (987)
Operating profit 9,964 37,701
Finance income 1,029 1,813
Finance costs (922) (514)
Profit before income tax 10,071 39,000
Income tax expense 4 (2,870) (10,892)
Profit for the period attributable to the owners of the Company 7,201 28,108
Earnings per share attributable to shareholders
pence
Total Group
Basic 5 5.6 21.2
Diluted 5 5.5 20.8
The accompanying notes form an integral part of these condensed consolidated
interim financial statements.
Condensed consolidated statement of comprehensive income
For the six months ended 31 May 2025
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2025 31 May 2024
Profit for the period 7,201 28,108
Other comprehensive loss
Items that may be subsequently reclassified to income statement
Exchange differences on retranslation of foreign operations (2,568) (2,136)
Other comprehensive loss for the period (net of tax) (2,568) (2,136)
Total comprehensive income for the period 4,633 25,972
attributable to owners of the Company
The accompanying notes form an integral part of these condensed consolidated
interim financial statements.
Condensed consolidated statement of financial position
as at 31 May 2025
(Unaudited) (Audited)
As at As at
31 May 2025 30 November 2024
£'000 Note
ASSETS
Non-current assets
Property, plant and equipment 49,708 46,217
Intangible assets 6 14,168 12,122
Deferred tax assets 2,485 3,408
Total non-current assets 66,361 61,747
Current assets
Trade and other receivables 328,554 364,907
Current tax assets 480 10,315
Cash and cash equivalents 7 47,881 69,756
Total current assets 376,915 444,978
Total assets 443,276 506,725
EQUITY AND LIABILITIES
Equity attributable to owners of the Company
Share capital 8 1,278 1,356
Share premium 8 42,098 42,098
Other reserves (5,264) (7,195)
Retained earnings 178,149 212,385
Total equity 216,261 248,644
Current liabilities
Bank overdraft 7,10 102 88
Trade and other payables 178,226 198,223
Lease liabilities 9 10,289 10,419
Provisions 2,344 4,068
Current tax liabilities - 12,275
Total current liabilities 190,961 225,073
Non-current liabilities
Lease liabilities 9 33,154 29,362
Provisions 2,900 2,784
Deferred tax liabilities - 862
Total non-current liabilities 36,054 33,008
Total liabilities 227,015 258,081
Total equity and liabilities 443,276 506,725
The accompanying notes form an integral part of these condensed consolidated
interim financial statements.
Condensed consolidated statement of changes in equity
for the six months ended 31 May 2025
£'000 Notes Share Share Capital Capital Treasury reserve Currency Fair value reserve of equity investments Retained Total equity attributable to owners of the Company
capital
premium
redemption
reserve
translation
earnings
reserve
reserve
Balance as at 1 December 2024 (audited) 1,356 42,098 172 878 (7,246) (999) - 212,385 248,644
Profit for the period - - - - - - - 7,201 7,201
Other comprehensive loss for the period - - - - - (2,568) - - (2,568)
Total comprehensive income for the period - - - - - (2,568) - 7,201 4,633
Dividends paid to equity holders 11 - - - - - - - (6,820) (6,820)
Dividends payable to equity holders 11 - - - - - - - (11,735) (11,735)
Settlement of vested tracker shares - - - - 460 - - (457) 3
Settlement of share-based payments 8 - - - - 4,645 - - (4,645) -
Cancellation of shares 8 (78) - 78 20,196 - - (20,196) -
Repurchase of shares 8 - - - - (20,196) - - - (20,196)
Purchase of shares by Employee Benefit Trust 8 - - - - (684) - - - (684)
Credit to equity for equity-settled share-based payments - - - - - - - 2,416 2,416
Total movements in equity (78) - 78 - 4,421 (2,568) - (34,236) (32,383)
Balance as at 31 May 2025 (unaudited) 1,278 42,098 250 878 (2,825) (3,567) - 178,149 216,261
1,349 39,700 172 878 (7,939) 3,305 (13) 185,432 222,884
Balance as at 1 December 2023 (audited)
Profit for the period - - - - - - - 28,108 28,108
Other comprehensive loss for the period - - - - - (2,136) - - (2,136)
Total comprehensive income for the period - - - - - (2,136) - 28,108 25,972
Dividends paid to equity holders 11 - - - - - - - (494) (494)
Dividends payable to equity holders 11 - - - - - - - (15,366) (15,366)
Settlement of vested tracker shares - - - - 51 - - (27) 24
Settlement of share-based payments 8 2 411 - - 7,080 - - (7,250) 243
Purchase of shares by Employee Benefit Trust 8 - - - - (10,000) - - - (10,000)
Credit to equity for equity-settled share-based payments - - - - - - - 3,531 3,531
Total movements in equity 2 411 - - (2,869) (2,136) - 8,502 3,910
Balance as at 31 May 2024 (unaudited) 1,351 40,111 172 878 (10,808) 1,169 (13) 193,934 226,794
The accompanying notes form an integral part of these condensed consolidated
interim financial statements.
Condensed consolidated statement of cash flows
for the six months ended 31 May 2025
£'000 (Unaudited) (Unaudited)
Six months ended Six months ended
31 May 2025 31 May 2024
Note
Cash flows from operating activities
Profit before tax 10,071 39,000
Adjustments for:
Depreciation and amortisation charge 8,340 7,157
Loss on disposal of property, plant and equipment other than right-of-use 16 80
assets
Loss on lease modification 21 -
Finance income (1,029) (1,813)
Finance costs 922 514
Non-cash charge for share-based payments 2,416 3,531
Operating cash flows before changes in working capital and provisions
20,757 48,469
Decrease in receivables 34,428 14,980
Decrease in payables (31,913) (20,842)
Decrease in provisions (1,573) (940)
Cash generated from operations 21,699 41,667
Interest received 1,029 1,813
Income tax paid - net (5,331) (11,380)
Net cash generated from operating activities 17,397 32,100
Cash flows from investing activities
Purchase of property, plant and equipment (2,411) (2,355)
Purchase of intangible assets 6 (2,117) (2,653)
Net cash used in investing activities (4,528) (5,008)
Cash flows from financing activities
Interest paid (922) (514)
Lease principal payments 9 (5,942) (6,749)
Repurchase of shares (20,196) -
Proceeds from exercise of share options 8 - 412
Purchase of shares by Employee Benefit Trust 8 (684) (10,000)
Dividends paid to equity holders 11 (6,820) (494)
Distributions to tracker shareholders (44) -
Net cash used in financing activities (34,608) (17,345)
Net (decrease)/increase in cash and cash equivalents (21,739) 9,747
Cash and cash equivalents at beginning of the period 69,668 83,202
Exchange losses relating to cash and cash equivalents (150) (2,902)
Net cash and cash equivalents at end of the period 7 47,779 90,047
The accompanying notes form an integral part of these condensed consolidated
interim financial statements.
Notes to the CONDENSED CONSOLIDATED Financial REPORT
for the six months ended 31 May 2025
1. basis of preparation and Accounting
policies
Basis of preparation
SThree plc is a public limited company listed on the London Stock Exchange,
incorporated in the United Kingdom and domiciled in the United Kingdom, and
registered in England and Wales. Its registered office is Level 16, 8
Bishopsgate, London, EC2N 4BQ.
These condensed consolidated interim financial statements (the 'Interim
Financial Report') as at and for the six months ended 31 May 2025 comprise
SThree plc (the 'Company') and its subsidiaries (referred to as the
'Group').
The Group's Interim Financial Report has been prepared in accordance with
International Accounting Standard 34 Interim Financial Reporting as adopted
for use in the United Kingdom (UK), and the Disclosure Guidance and
Transparency Rules sourcebook of the UK's Financial Conduct Authority. It
should be read in conjunction with the SThree plc Annual Report and Accounts
FY24, prepared in accordance with UK-adopted International Accounting
Standards and in conformity with the requirements of the Companies Act 2006 as
applicable to companies reporting under those
standards.
The Interim Financial Report does not constitute statutory accounts as defined
by section 434 of the Companies Act 2006. A copy of the statutory accounts for
the year ended 30 November 2024 has been delivered to the Registrar of
Companies. The auditors reported on those accounts; their report was
unqualified, did not draw attention to any matters by way of emphasis and did
not contain a statement under section 498 (2) or (3) of the Companies Act
2006.
The Interim Financial Report is unaudited and has not been reviewed by the
Group's external auditors.
The Interim Financial Report of the Group was approved by the Board for issue
on 28 July 2025.
Going concern
The financial information contained in this Interim Financial Report has been
prepared on a going concern basis.
As part of the consideration of whether to adopt the going concern basis of
preparation, the Directors have reviewed the Group's financial performance in
the first half of the financial year 2025 (FY25) and the Group's reforecast
for FY25, as well as considered principal risks which may impact the Group's
ability to generate cash from the date of approval of this Interim Financial
Report to 31 July 2026.
At 31 May 2025, the Group had a net cash position of £47.8 million. Credit
facilities relevant to the review period comprise a committed £50.0 million
RCF (with the expiry date of 26 July 2027) and an uncommitted £30.0 million
accordion facility, both jointly provided by HSBC and Citibank. These
facilities remained undrawn as at 31 May 2025. A further uncommitted £5.0
million bank overdraft facility is also held with HSBC, which was undrawn at
the reporting date.
In addition, the Group's strong balance sheet, including a substantial working
capital position for placements already undertaken, and history of stable cash
generation, disciplined cost control and flexible workforce management
provides further protection.
The Group delivered a stable net fees performance in the first half of FY25
against the backdrop of ongoing challenging market conditions. Although new
business continues to be soft, extensions remain robust across our core STEM
Contract service offering, providing sector-leading visibility. Our Employed
Contractor Model business, which represents 48% of our Contract focus
outperformed Independent Contract business, and we continue to see good
opportunities in this space to leverage our global scale to deliver flexible
solutions to our customers. Within Permanent, we have seen a sequential
improvement, particularly in the US region.
Overall, the Group has sufficient financial resources to fund its current
operations. The Group is therefore well placed to manage its principal
risks. After making enquiries, the Directors have formed a judgement at the
time of approving this Interim Report that there is a reasonable expectation
that the Group has adequate resources to continue in operation existence for
the period from the date of approval of this Interim Report to 31 July
2026.
Accounting policies
The accounting policies used in the preparation of the condensed consolidated
financial statements are consistent with those applied in the previous
financial year and corresponding interim reporting period, except for the
adoption of new and amended standards effective as of 1 December 2024 as set
out below.
New and amended standards effective in FY25 and adopted by the
Group
The following amendments to the accounting standards, issued by the IASB and
endorsed by the UK and EU, have been adopted by the Group which became
applicable as of 1 December 2024. The Group did not have to change its
accounting policies or make retrospective adjustments as a result of adopting
these amended standards.
- New disclosure requirements for characteristics of supplier
finance arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7
Financial Instruments:
Disclosures).
- New requirements for measuring lease liability arising in a sale
and leaseback transaction (Amendments to IFRS 16 Leases).
- New classification requirements for liabilities as current or
non-current (Amendments to IAS 1 Presentation of Financial
Statements).
New and amended standards that are applicable to the Group but not yet
effective
As at the date of authorisation of this Interim Financial Report, the
following amendments to existing standards were in issue and endorsed by the
UKEB, but not yet effective. Subject to the endorsement by the UKEB, these
changes are effective for the period beginning 1 January 2025. These
amendments are not expected to have a material impact on the Group in the
current or future periods.
- New requirements for lack of exchangeability (Amendments to IAS
21 The Effects of Changes in Foreign Exchange Rates).
- New requirements for presentation within the income statement
(IFRS 18 Presentation and Disclosure in Financial Statements, which replaces
IAS 1 Presentation of Financial Statements). In light of the IFRS 18, which
will be effective for annual reporting periods starting on or after 1 January
2027, the Group will initiate the planning process later this year. This will
involve, but not be limited to, redesigning the income statement and cash flow
statement, as well as re-evaluating the disclosures to be included in the
notes to the financial
statements.
The Group has not early adopted any standard, interpretation or amendment that
has been issued but is not yet effective.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of the Interim Financial Report includes the use of estimates
and assumptions. Although the estimates used are based on the management's
best information about current circumstances and future events and actions,
actual results may differ from these estimates.
In preparing this Interim Financial Report, the judgements made by management
in applying the Group's accounting policies and the key sources of estimation
uncertainty were materially the same as those applied in the Group's FY24
Annual Report and Accounts.
Alternative Performance Measures (APMs)
The Group presents certain measures of financial performance or financial
position in the Interim Financial Report that are not defined or specified
according to IFRS. These measures, referred to as APMs, are defined and
reconciled to IFRS in note 16 to the condensed consolidated financial
statements, and were prepared on a consistent basis for all periods
presented.
2. operating segments
The Group's operating segments are established on the basis of those
components of the Group that are regularly reviewed by the Group's chief
operating decision-making body (the 'CODM'), in deciding how to allocate
resources and in assessing performance. The Group's business is considered
primarily from a geographical perspective.
The Directors have determined the chief operating decision-making body (CODM)
to be the Executive Committee made up of the Chief Executive Officer, the
Chief Financial Officer, the Chief Operating Officer, the Chief Commercial
Officer, the Chief People Officer and Regional Managing Directors, with other
senior management attending via
invitation.
The Group also presents separately the net fees of its five key markets:
Germany, the Netherlands, the USA, the UK and Japan, as well as a breakdown of
net fees per Contract and Permanent, referred to as 'service mix'.
DACH region comprises Austria, Germany and Switzerland. Rest of Europe
comprises the UK, Belgium and France, and Middle East & Asia includes
Japan and the
UAE.
Countries aggregated into DACH, Rest of Europe, Netherlands (including Spain),
and separately into Rest of the Europe have similar economic risks and
prospects, i.e. they are expected to generate similar average gross margins
over the long term, and are similar in each of the following
areas:
- the nature of the services (recruitment/candidate
placement);
- the methods used in which they provide services to clients
(independent contractors, employed contractors and permanent candidates);
and
- the class of candidates (candidates, who we place with our
clients, represent skill-sets in Sciences, Technology, Engineering and
Mathematics
disciplines).
The Group's management reporting and controlling systems use accounting
policies that are the same as those described in these financial statements
and in the Group's FY24 annual financial statements.
Revenue and net fees by reportable segment
The Group assesses the performance of its operating segments through a measure
of segment profit or loss which is referred to as 'net fees' in the management
reporting and controlling systems. Net fees is the measure of segment profit
comprising revenue less cost of
sales.
Revenue (unaudited) Cost of sales (unaudited) Net fees (unaudited)
Six months ended Six months ended Six months ended
£'000 31 May 2025 31 May 2024 31 May 2025 31 May 2024 31 May 2025 31 May 2024
DACH 196,151 229,962 142,963 165,765 53,188 64,197
Rest of Europe 148,662 181,709 123,001 150,398 25,661 31,311
Netherlands including Spain 143,195 175,913 111,087 134,792 32,108 41,121
USA 140,360 154,463 100,982 112,622 39,378 41,841
Middle East & Asia 20,454 21,357 11,723 11,084 8,731 10,273
648,822 763,404 489,756 574,661 159,066 188,743
Timing of revenue recognition
The Group derives revenue from the transfer of services over time and at a
point in time in the following geographical regions:
For the six months ended 31 May 2025 DACH Rest of Europe Netherlands including Spain USA Middle East & Asia Total
(unaudited)
£'000
Timing of revenue recognition
Over time 185,152 147,748 139,971 135,143 14,382 622,396
At a point in time 10,999 914 3,224 5,217 6,072 26,426
196,151 148,662 143,195 140,360 20,454 648,822
For the six months ended 31 May 2024 (unaudited) DACH Rest of Europe Netherlands including Spain USA Middle East & Asia Total
£'000
Timing of revenue recognition
Over time 215,014 180,691 171,249 150,515 14,341 731,810
At a point in time 14,949 1,018 4,664 3,948 7,015 31,594
229,963 181,709 175,913 154,463 21,356 763,404
Major customers
In the current and prior financial period, no single customer generated more
than 10% of the Group's revenue.
Other information
The Group's revenue from external customers, its net fees and information
about its segment assets (non-current assets excluding deferred tax assets) by
key location are detailed below:
Revenue (unaudited) Cost of sales (unaudited) Net fees (unaudited)
Six months ended Six months ended Six months ended
£'000 31 May 2025 31 May 2024 31 May 2025 31 May 2024 31 May 2025 31 May 2024
Germany 171,606 197,779 124,650 141,803 46,956 55,976
USA 140,360 154,463 100,982 112,622 39,378 41,841
Netherlands 130,985 164,176 102,414 126,687 28,571 37,489
UK 84,436 118,145 70,270 98,168 14,166 19,977
Japan 6,971 6,184 1,554 1,335 5,417 4,849
RoW((1)) 114,464 122,657 89,886 94,046 24,578 28,611
648,822 763,404 489,756 574,661 159,066 188,743
(Unaudited) (Audited)
As at As at
£'000 31 May 2025 30 November 2024
Non-current assets
UK 29,312 28,334
Germany 20,001 13,887
USA 6,149 7,553
Netherlands 4,566 4,245
Japan 1,329 1,792
RoW((1)) 2,519 2,528
63,876 58,339
(1) RoW (Rest of the World) includes all countries other than
listed.
Non-current assets do not include deferred tax assets as they are not reviewed
by the CODM.
The following segmental analysis by brands, recruitment classification and
sectors (being the profession of candidates placed) have been included as
additional disclosure to the requirements of IFRS 8 Operating segments.
Revenue (unaudited) Cost of sales (unaudited) Net fees (unaudited)
Six months ended Six months ended Six months ended
£'000 31 May 2025 31 May 2024 31 May 2025 31 May 2024 31 May 2025 31 May 2024
Brands
Progressive 260,405 282,691 197,619 212,756 62,786 69,935
Computer Futures 171,901 233,412 127,263 174,091 44,638 59,321
Huxley Associates 115,887 120,181 90,576 93,640 25,311 26,541
Real Staffing Group 100,629 127,120 74,298 94,174 26,331 32,946
648,822 763,404 489,756 574,661 159,066 188,743
Other brands, including Global Enterprise Partners, JP Gray and Madison Black,
are rolled into the above brands.
Revenue (unaudited) Cost of sales (unaudited) Net fees (unaudited)
Six months ended Six months ended Six months ended
£'000 31 May 2025 31 May 2024 31 May 2025 31 May 2024 31 May 2025 31 May 2024
Service mix
Contract 622,396 731,810 488,556 573,098 133,840 158,712
Permanent 26,426 31,594 1,200 1,563 25,226 30,031
648,822 763,404 489,756 574,661 159,066 188,743
Revenue (unaudited) Cost of sales (unaudited) Net fees (unaudited)
Six months ended Six months ended Six months ended
£'000 31 May 2025 31 May 2024 31 May 2025 31 May 2024 31 May 2025 31 May 2024
Skills mix
Technology 307,107 379,894 234,879 289,741 72,228 90,153
Engineering 196,151 214,894 147,839 160,938 48,312 53,956
Life Sciences 98,227 116,067 71,817 84,449 26,410 31,618
Other 47,337 52,549 35,221 39,533 12,116 13,016
648,822 763,404 489,756 574,661 159,066 188,743
3. administrative expenses
Operating profit is stated after charging:
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2025 31 May 2024
Staff costs 110,245 115,691
Depreciation 7,850 7,145
Amortisation 490 12
Loss on disposal of property, plant and equipment 37 80
Service lease charges - Buildings 1,254 888
Service lease charges - Cars 1,068 407
Foreign exchange losses 540 539
4. income tax expense
Income tax for the half year is accrued based on the Directors' best estimate
of the average annual effective tax rate (ETR) for the financial year. The tax
charge for the half year amounted to £2.9 million (H1 FY24: £10.9 million)
at an ETR of 28.5% (H1 FY24: 27.9%). The Group's ETR primarily varies with the
mix of taxable profits by territory, non-deductibility of the accounting
charge for LTIP's and other one-off tax items.
A deferred tax asset of £2.5 million (as at 30 November 2024: a net deferred
tax asset £2.5 million) was recognised in the financial statements as at 31
May 2025. The deferred tax assets arise on accelerated depreciation, share
based payments and provisions. The movement in the period arises primarily on
share-based payments.
At the reporting date, the Group had unused tax losses of £25.6 million (as
at 30 November 2024: £25.6 million) available for offset against future
profits. No deferred tax asset was recognised against these
losses.
On 17 November 2022, the UK Government confirmed its intention to implement
the G20-OECD Inclusive Framework Pillar 2 rules in the UK, including a
Qualified Domestic Minimum Top-Up Tax rule. This legislation, which was
enacted on 11 July 2023, will seek to ensure that UK-headquartered
multinational enterprises pay a minimum tax rate of 15% on UK and overseas
profit for accounting periods commencing after 31 December 2023.
While most jurisdictions in which the Group operates have statutory tax rates
above 15% and are therefore expected to fall within the transitional safe
harbour exemptions, the interim assessment performed, indicates that a top-up
tax may be applicable to profits arising from the Group's operations in
Ireland. The impact is not considered material in the context of the Group's
overall financial position and has therefore not been recorded. No additional
current or deferred tax has been recognised. The Group has applied the
exception from recognising and disclosing deferred tax assets and liabilities
related to Pillar 2 income taxes, in accordance with the amendments to Section
29 issued in July 2023.
The safe harbour position has been analysed for each jurisdiction and we would
expect all material jurisdictions to pass safe harbour tests, therefore no
material impacts are expected.
5. Earnings per share
Basic earnings per share (EPS) is calculated by dividing the profit for the
year attributable to owners of the Company by the weighted average number of
ordinary shares outstanding during the period excluding shares held as
treasury shares and those held in the Employee Benefit Trust, which for
accounting purposes are treated in the same manner as shares held in the
treasury reserve.
Diluted EPS is calculated by adjusting the weighted average number of ordinary
shares outstanding to assume conversion of all dilutive ordinary shares
arising from exercising employee stock options and tracker shares.
The following tables reflect the income and share data used in the basic and
diluted EPS calculations.
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2025 31 May 2024
Earnings
Profit for the period attributable to the owners of the Company 7,201 28,108
(Unaudited) (Unaudited)
Six months ended Six months ended
millions 31 May 2025 31 May 2024
Number of shares
Weighted average number of shares used for basic EPS 128.9 132.6
Dilutive effect of share plans 1.1 2.7
Diluted weighted average number of shares used for diluted EPS 130.0 135.3
(Unaudited) (Unaudited)
Six months ended Six months ended
pence 31 May 2025 31 May 2024
Basic EPS 5.6 21.2
Diluted EPS 5.5 20.8
6. Intangible assets
Since the FY24 year end, the Group increased its intangible assets book value
by a net amount of £2.1 million to £14.2 million (FY24: £12.1 million)
reflecting final development costs incurred under the Technology Improvement
Programme (TIP).
During the current financial period, £12.3 million in costs, which were
capitalised under the TIP since FY22, were transferred to software and system
development costs. Accordingly, the amortisation of the internally generated
assets has commenced. In line with the pre-agreed asset amortisation trigger
event, the Group has successfully completed a full deployment of the new
platform including an interim ECM solution across its most complex regions.
All challenges faced during these deployments were resolved to management's
satisfaction providing needed assurance on the built capabilities of the
platform which is now in condition as intended by management and ready to use.
The amortisation charge of £0.5 million (H1 FY25: £nil) was recognised in
administrative expenses in the current financial period.
7. Cash and cash equivalents
(Unaudited) (Audited)
As at As at
£'000 31 May 2025 30 November 2024
Cash at bank 47,881 69,756
Bank overdraft (102) (88)
Net cash and cash equivalents 47,779 69,668
Cash and cash equivalents comprise cash and short-term bank deposits with an
original maturity of three months or less, net of outstanding bank overdrafts.
The carrying amount of these assets approximate their fair values. All of
these assets are categorised within level 1 of the fair value hierarchy.
The Group has four cash pooling arrangements in place at HSBC US (USD), HSBC
UK (GBP) and Citibank (EUR).
8. SHARE CAPITAL
Share capital
During the current financial period, the Company purchased 7,779,335 (H1 FY24:
none) shares for immediate cancellation. When cancelling its ordinary shares,
the Company transferred amounts equivalent to the nominal value of the
cancelled shares into the capital redemption reserve. As a result, the share
capital reduced by £0.1 million to £1.3 million (H1 FY24: £1.4 million).
During the period, there were no new issues of ordinary shares. For
comparison, in the prior financial period, 157,416 new ordinary shares were
issued resulting in a share premium of £0.4 million.
The Company's issued share capital at 31 May 2025 consisted of 127,827,457 (H1
FY24: 135,029,856) ordinary shares of £0.01 each, of which 35,767 (H1 FY24:
35,767) were held in treasury
reserve.
Employee Benefit Trust
In the first half of FY25, the EBT purchased 252,128 (H1 FY24: 2,340,585) of
SThree plc shares. The average price paid per share was 271 pence (H1 FY24:
427 pence). The total acquisition cost of the purchased shares was £0.7
million (H1 FY24: £10.0 million), for which the treasury reserve was reduced.
During the financial period, the EBT utilised 1,243,578 (H1 FY24: 1,666,426)
shares on settlement of vested Long-Term Incentive Plan awards, Restricted
Unit Stock awards, ShareMatch awards and vested tracker shares. At the period
end, the EBT held 775,602 (H1 FY24: 2,598,617)
shares.
9. leases
The leases which are recorded on the condensed consolidated statement of
financial position are principally in respect of buildings and cars.
The Group's right-of-use assets and lease liabilities are presented below:
(Unaudited) (Audited)
As at As at
£'000 31 May 2025 30 November 2024
Buildings 39,387 35,577
Cars 703 976
Total right of use assets 40,090 36,553
Current lease liabilities 10,289 10,419
Non-current lease liabilities 33,154 29,362
Total lease liabilities 40,058 39,781
The condensed consolidated income statement includes the following amounts
relating to depreciation of right-of-use assets:
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2025 30 May 2024
Buildings 6,052 5,504
Cars 411 527
IT equipment - 29
Total depreciation charge of right-of-use assets 6,463 6,060
In the current financial period, interest expense on leases amounted to £0.9
million (H1 FY24: £0.4 million) and was recognised within finance costs in
the Condensed Consolidated Income Statement.
The total cash outflow for leases in six months ended 31 May 2025 was £6.9
million (H1 FY24: £7.1 million) and comprised the principal and interest
element of recognised lease liabilities.
10. other financial liabilities
As at 31 May 2025, the Group maintains a committed Revolving Credit Facility
(RCF) of £50.0 million along with an uncommitted £30.0 million accordion
facility, both jointly provided by HSBC and Citibank, giving the Group an
option to increase its total borrowings under the facility to £80.0 million.
During the current and previous period, the Group did not draw down under
these facilities. The Group has also an uncommitted £5.0 million overdraft
facility with HSBC, which was undrawn at the half year end.
The RCF is subject to financial covenants and any funds borrowed under the
facility bear a minimum annual interest rate in the range of 1.2% to 1.8%
above the benchmark Sterling Overnight Index Average (SONIA). In the six
months ended 31 May 2025, the Group incurred £0.9 million in finance costs
(H1 FY24: £0.5 million) which were mainly related to lease interest.
The covenants which the RCF is subject to, require the Group to maintain
financial ratios over interest cover, leverage and guarantor cover. The Group
has complied with these covenants throughout the current and prior period.
The Group's exposure to interest rates, liquidity, foreign currency and
capital management risks is disclosed in the Group's FY24 annual financial
statements.
11. Dividends
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2025 31 May 2024
Amounts recognised as distributions to equity holders in the period
Interim dividend of 5.0 pence for FY23 per share (note a) - 494
Final dividend of 11.6 pence for FY23 per share (note b) - 15,366
Interim dividend of 5.1 pence for FY24 per share (note c) 6,820 -
Final dividend of 9.2 pence for FY24 per share (note d) 11,735 -
18,555 15,860
Note a
The FY23 interim dividend of 5.0 pence per share was paid on 8 December 2023.
The £6.4 million in funds, required for its settlement, were transferred by
the Group to the share administrator before 30 November 2023.
The £0.5 million shown as distributed in FY24 reflected primarily payments to
shareholders who claimed the FY23 interim dividend post the FY23 year end.
Note b
The FY23 final dividend of 11.6 pence per share was paid on 7 June 2024 to
shareholders on the register of SThree plc on 10 May 2024.
Note c
The FY24 interim dividend of 5.1 pence per share was paid on 6 December 2024
to shareholders on record at 8 November 2024.
Note d
The final dividend for the year ended 30 November 2024 of 9.2 pence per share
was approved by shareholders at the Annual General Meeting on 29 April 2025.
The £11.7 million in funds, required for settlement of the FY24 final
dividend, were transferred to the share administrator on 4 June 2025, and the
final dividend was paid on 6 June 2025 to those shareholders on record at 9
May
2025.
12. RELATED PARTY DISCLOSURES
The Group's significant related parties are as disclosed in the Group's FY24
annual financial statements. There have been no significant changes to the
nature of its related party transactions as disclosed in note 22 of the SThree
plc's Annual Report and Accounts FY24.
13. Shareholder communications
SThree plc has taken advantage of regulations which provide an exemption from
sending copies of its Interim Financial Report to shareholders. Accordingly,
the FY25 Interim Financial Report will not be sent to shareholders but will be
available on the Company's website www.sthree.com or can be inspected at the
registered office of the Company.
14. Subsequent events
There were no subsequent events following 31 May 2025 requiring disclosure or
adjustment.
15. ALTERNATIVE PERFORMANCE MEASURES (APMs): definitions and reconciliations
In discussing the performance of the Group, comparable measures are used.
The Group discloses comparable performance measures to enable users to focus
on the underlying performance of the business on a basis which is common to
both periods for which these measures are presented. The reconciliation of
comparable measures to the directly related measures calculated is as follows.
APMs in constant currency
As the Group operates in 11 countries and with many different currencies, it
is affected by foreign exchange movements, and the reported financial results
reflect this. However, the Group business is managed against targets which are
set to be comparable between years and within them, for otherwise foreign
currency movements would undermine the management ability to drive the
business forward and control it. Within this Interim Financial Report,
comparable results have been highlighted on a constant currency basis as well
as the results on a reported basis which reflect the actual foreign currency
effects experienced.
The Group evaluates its operating and financial performance on a constant
currency basis (i.e. without giving effect to the impact of variation of
foreign currency exchange rates from period to period). Constant currency APMs
are calculated by applying the prior period foreign exchange rates to the
current and prior financial period results to remove the impact of exchange
rate.
Measures on a constant currency basis enable users to focus on the performance
of the business on a basis which is not affected by changes in foreign
currency exchange rates applicable to the Group's operating activities from
period to period.
The calculations of the APMs on a constant currency basis and the
reconciliation to the most directly related measures are as
follows:
31 May 2025 (unaudited)
£'000, unless otherwise stated Revenue Net fees Operating profit Operating profit conversion ratio* Profit before tax Basic EPS
Reported 648,822 159,066 9,964 6.3% 10,071 5.6p
Currency impact 10,629 2,690 744 0.3% 733 0.4p
In constant currency 659,451 161,756 10,708 6.6% 10,804 6.0p
31 May 2024 (unaudited)
£'000, unless otherwise stated Revenue Net fees Operating profit Operating profit conversion ratio* Profit before tax Basic EPS
Reported 763,404 188,743 37,701 20.0% 39,000 21.2p
*Operating profit conversion ratio represents operating profit over net fees.
To calculate the YoY variances in constant currency, management compared the
H1 FY25 results in constant currency versus the H1 FY24 reported results.
Other APMs
Net cash excluding lease liabilities
Net cash is an APM used by the Directors to evaluate the Group's capital
structure and leverage. Net cash is defined as cash and cash equivalents less
current and non-current borrowings excluding lease liabilities, less bank
overdraft, as illustrated below:
(Unaudited) (Audited)
As at As at
£'000 31 May 2025 30 November 2024
Cash and cash equivalents 47,881 69,756
Bank overdraft (102) (88)
Net cash 47,779 69,668
EBITDA
In addition to measuring financial performance of the Group based on operating
profit, the Directors also measure performance based on EBITDA. It is
calculated by adding back to the reported operating profit operating non-cash
items such as the depreciation of property, plant and equipment (PPE), the
amortisation and impairment of intangible assets, loss on disposal of PPE and
intangible assets, gain on lease modification and the employee share options
charge. Where relevant, the Group also uses EBITDA to measure the level of
financial leverage of the Group by comparing EBITDA to net debt.
A reconciliation of reported operating profit for the period, the most
directly comparable IFRS measure, to EBITDA is set out
below.
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000 31 May 2025 31 May 2024
Reported operating profit for the period 9,964 37,701
Depreciation of PPE 7,850 7,145
Amortisation and impairment of intangible assets 490 12
Loss on disposal of PPE 16 80
Loss on lease modification 21 -
Employee share options charge 2,416 3,531
EBITDA 20,757 48,469
Contract margin
The Group uses contract margin as an APM to evaluate contract business quality
and the service offered to customers. Contract margin is defined as contract
net fees as a percentage of contract revenue.
(Unaudited) (Unaudited)
Six months ended Six months ended
£'000, unless otherwise stated 31 May 2025 31 May 2024
Contract net fees A 133,840 158,712
Contract revenue B 622,396 731,810
Contract margin (A ÷ B) 21.5% 21.7%
Financial Calendar
16 September 2025 FY25 Q3
Trading Update
30 November 2025 FY25
Financial Year End
16 December 2025 FY25 Full
Year Trading Update
27 January 2026
FY25 Final Results
1 (#_ftnref1) The Group has identified and defined certain alternative
performance measures (APMs). These are the key measures the Directors use to
assess the SThree's underlying operational and financial performance. The APMs
are fully explained and reconciled to IFRS line items in note 15 to these
consolidated financial statements.
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