12 December 2024

SThree plc

Trading Update

FY24 performance in line, challenging conditions persist

Intention to launch share buyback programme of up to £20m

SThree plc ("SThree" or the "Group"), the only global specialist talent partner focused on roles in Science, Technology, Engineering and Mathematics ('STEM'), today issues a trading update for the financial year ended 30 November 2024.

Full Year Highlights                             

Outlook

Intention to launch a share buyback programme

Timo Lehne, Chief Executive, commented:

"As has been widely reported across our industry, the past year has been characterised by protracted challenging market conditions which have impacted new business activity. Nonetheless, we continued to see robust contract extensions through the year which demonstrates the value our customers place on the critical STEM roles we provide and the skills on which they rely to power their organisations. It is our specialism in STEM and Contract, combined with careful cost management, that has delivered a resilient performance, with FY24 expected to be in line with market consensus.

"There is no doubt that the labour market is undergoing changes driven by new technology and new ways of working. We recognised these megatrends early which has informed both our strategy to target niche specialisms where we see structural growth, being STEM and Contract, but also our own approach to how we pursue these opportunities. Our Technology Improvement Programme is a core component of where we see our mid-to-long term opportunity, and its phased implementation which continues to progress to plan, underpinned by a robust financial position, takes us closer to our digital-first vision.

"The nature of our business model has meant we have been able to withstand the external pressures until now. However, the anticipated easing of market conditions has not yet materialised, with delayed decision making continuing to impact new placement activity whilst Contract extensions remain robust. With this dynamic expected to persist through next year, the Board has taken a prudent view of FY25. We nonetheless remain confident that we have the right strategy, an energised team, and a robust technology platform which is becoming more powerful as we roll-out additional functionality, leaving us well placed for when market conditions improve."

Business performance highlights

In challenging market conditions Group net fees were down 9% YoY reflecting the continued softness in new business across Contract and Permanent, partially offset by strong Contract extensions.

The Group's Engineering net fees for the full year, were down 1% against a record prior year performance. Technology and Life Sciences performance reflected the tough market conditions throughout the year and declined 10% and 17% respectively.  

Regionally, the Group delivered net fee growth in the Middle East and Asia, underpinned by an impressive performance in Japan. Challenging macro-economic conditions resulted in declines across the Group's three largest markets, which now represent 72% of net fees. The performance in Germany reflected lower levels of demand for Technology skills. Our USA performance was impacted by declines in Life Sciences and Technology partially offset by a solid Engineering performance, whilst the Netherlands saw lower levels of demand for Technology and Engineering skills versus record levels in the prior year.

Group period-end headcount was up slightly from the end of the last financial year.

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

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

⁽³⁾ Current consensus PBT expectation is £67.4m for FY24. Source: SThree compiled consensus.

⁽⁴⁾ DACH - Germany, Austria and Switzerland.

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

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

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

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

Analyst conference call

SThree is hosting a conference call for analysts and investors today at 8.30am to discuss the Trading Update. If you would like to register for the conference call, please contact [email protected].

Forward looking dates

The Group will present its results for the financial year ended 30 November 2024 on 28 January 2025. 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation.  The person responsible for arranging the release of this announcement on behalf of SThree is Kate Danson, Group Company Secretary.

Notes to editors

SThree plc brings skilled people together to build the future. We are the only global specialist talent partner focused on roles in Science, Technology, Engineering and Mathematics ('STEM'), providing permanent and flexible contract talent to a diverse base of around 6,000 clients across 11 countries. Our Group's c.2,700 staff cover the Technology, Life Sciences and Engineering sectors. SThree is part of the Industrial Services sector. We are listed on the London Stock Exchange's Main Market, trading with ticker code STEM.

Important notice

Certain statements in this announcement are forward looking statements. By their nature, forward looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by those statements. Forward looking statements regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. Certain data from the announcement is sourced from unaudited internal management information and is before any exceptional items. Accordingly, undue reliance should not be placed on forward looking statements.

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