SThree Delivers Steady H1 Performance Amid Challenging Conditions
Why we think this is neutral
SThree's H1 FY25 trading update shows a mixed performance, with net fees declining 14% year-over-year amid challenging market conditions. While the company maintained profitability in line with guidance and saw improvements in cash flow, the revenue decline and ongoing headwinds temper the overall sentiment. The company remains focused on operational efficiencies and technology investments to position itself for future opportunities.
Key Points
- Group net fees down 14% year-over-year in H1
- Contract net fees down 14%, Permanent down 13%
- Contractor order book of £164 million, down 8% year-over-year
- Robust balance sheet with net cash of £48 million at 31 May 2025
- Technology Improvement Programme on track, with 8 of 11 markets now onboarded
- FY25 performance expected to be in line with £25 million PBT guidance
Summary
SThree plc, the global STEM workforce consultancy, reported a 14% year-over-year decline in net fees for the first half of FY25. The company's Contract segment saw a 14% decline, while Permanent was down 13%. Regionally, the company's three largest markets - DACH, Netherlands, and the USA - all experienced declines, though the USA showed positive momentum in Q2.
The company maintained a robust balance sheet, with net cash of £48 million at the end of May 2025. It also completed a £20 million share buyback programme. SThree expects its FY25 performance to be in line with the previously announced £25 million profit before tax guidance.