ImPROVING NEW BUSINESS TRENDS AND COST DISCIPLINE SUPPORT FULL-YEAR GUIDANCE REITERATION

 

SThree plc ('SThree' or the 'Group'), the global STEM workforce consultancy, reports its financial results for the six months ended 31 May 2026.

 

FINANCIAL HIGHLIGHTS

 

in millions, unless otherwise stated	H1 FY26	H1 FY25	Variance
			Reported	Like-for-like (1)
Revenue	£598.8	£648.8	-8%	-8%
Net fees	£147.7	£159.1	-7%	-7%
Operating profit	£3.4	£10.0	-65%	-67%
Operating profit conversion ratio	2.3%	6.3%	-4% pts	-4% pts
Profit before tax	£2.7	£10.1	-73%	-75%
Basic earnings per share	2.1p	5.6p	-63%	-66%
Interim dividend per share	5.1p	5.1p	-	-
Net cash (2)	£43.0	£47.8	-10%	-10%

 

 

HALF-YEAR HIGHLIGHTS 

·	Group net fees of £147.7 million, down 7% year-on-year (YoY)(3), reflecting a continued improvement in the YoY rate of decline, driven by ongoing growth in the USA and Japan.
	o	Geographical mix: our three largest countries represent 72% of Group net fees. The USA grew by 12%, while Germany and the Netherlands declined 14% and 24%, respectively.
	o	Skills mix: Engineering net fees were broadly stable, declining 1% YoY, Life Sciences declined 8% YoY, and Technology declined 14%.
·	Contract net fees, representing 85% of Group net fees (H1 FY25: 84%), declined 8% YoY. Strong growth in the USA partially offset softer performances in the Netherlands and Germany, contributing to a sequential improvement in Group contract performance in Q2 (Q1: -10% YoY; Q2: -6% YoY).
·	Contract extensions remained resilient, while new business activity was stable year-on-year and improved quarter-on-quarter, with momentum building across a growing number of countries during the half despite reduced headcount. This was supported by improved productivity and the early benefits of the Group's technology platform.
·	Permanent net fees, representing 15% of Group net fees (H1 FY25: 16%) declined 5% YoY, with a reducing rate of decline supported by a strong performance in Japan.
·	Contractor order book(4) of £157.2 million, up 3% YoY, continues to represent sector-leading visibility, equivalent to approximately five months' net fees.
·	Profit before tax (PBT) of £2.7 million, down 75% YoY, reflecting lower net fees and £6.4 million of non-recurring costs primarily attributable to planned expenditure associated with the cost optimisation programme, partially offset by disciplined cost management and operational focus.
·	Share buyback programme of up to £20.0 million, launched in February 2026, resulted in £6.0 million worth of shares being purchased and subsequently cancelled during H1 FY26 (£8.8 million purchased as at 20 July 2026).
·	Robust balance sheet, with net cash of £43.0 million at 31 May 2026 (31 May 2025: £48 million).
·	Interim dividend maintained at 5.1 pence (H1 FY25: 5.1 pence) per share, underpinned by balance sheet strength.

 

OUTLOOK

·	The Board remains cautiously optimistic, supported by positive forward indicators, including improving new business activity across a growing number of countries; a return to growth in the contractor order book; and continued momentum in select countries, notably the USA and Japan.
·	Tech-enabled operating model supporting cost efficiencies, productivity gains and next-generation AI sales tools.
·	As previously announced, the cost optimisation programme remains on track, with benefits weighted to the second half, underpinning FY26 PBT guidance of c.£10 million.(5)

 

⁽¹⁾ Variance compares reported H1 FY26 against reported H1 FY25 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, excluding lease liabilities.

⁽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 16 September 2025, the Board expects FY26 profit before tax to be c.£10 million.

 

 

Timo Lehne, Chief Executive Officer, commented:

"Trading momentum improved through the first half despite continued macroeconomic and geopolitical uncertainty, with strong performances in the USA and Japan, stable year-on-year new business activity and a return to growth in our contractor order book. While market conditions remain mixed across our geographies, we are encouraged by the improving trends we are seeing in a growing number of countries and by the continued resilience of our Contract business.

We anticipated early on how our industry was set to evolve and, over recent years, implemented clear strategic initiatives. The benefits of these decisions are increasingly visible. We have simplified the business, focused on markets where we have the right balance of scale and opportunity, and successfully completed the rollout of our Technology Improvement Programme. Operating on a single global cloud-based platform has enabled us to build an operating model centred on shared services and economies of scale, which is delivering productivity gains, improved execution, and the data and process backbone to deploy AI and new capabilities at scale and pace. We are now a focused, scalable, less complex and tech-enabled business with a clear operating model.

These characteristics are vital. As workforce needs become more complex, clients increasingly require partners that can combine specialist expertise, workforce solutions and technology-enabled delivery. While we remain cautious on the near-term market outlook, we believe SThree is well positioned to meet those needs. We are at the forefront of change, and we intend to build on this position by continuing to develop and deploy new capabilities at pace."

 

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 2026. If you would like to register for the conference call, please contact [email protected].

 

Forward looking dates

The Group will present its Q3 FY26 Trading Update on 22 September 2026.

 

Enquiries:

SThree plc                                                                                                                                                              

Timo Lehne, CEO   

Damian Fehrenberg, Interim CFO

Charlie Hildesley, Investor Relations Manager                     [email protected]

                               

Alma Strategic Communications                                       +44 20 3405 0205

Rebecca Sanders-Hewett                                                       [email protected]

Hilary Buchanan                                                                                    

Sam Modlin

Rose Docherty        

 

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 40 years of experience in pure-play STEM and a global team with local expertise across 11 countries, we cover high-demand skills across Engineering, Life Sciences and Technology roles.

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

 

Outpace tomorrow, together

 

 

Important notice

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

 

 

Chief Executive Officer's STATEMENT

Introduction

H1 FY26 results demonstrated improving momentum, with the rate of net fee decline moderating quarter-on-quarter despite the broader macroeconomic and geopolitical backdrop. Another robust Contract extension period was complemented by stable year-on-year new business activity, with momentum building across a growing number of countries and driving sequential improvement through the period. This performance was supported by stronger consultant productivity on a per head basis underpinned by the benefits of a more efficient operating platform.

Importantly, the benefits of the strategic and proactive initiatives we have undertaken over recent years are becoming increasingly visible. We moved early, recognising how our industry was evolving. Following the completion of the Technology Improvement Programme (TIP) rollout last year, our focus has shifted from implementation to Group-wide optimisation, translating a standardised, end-to-end platform into measurable gains in efficiencies and productivity. However, this is not only a technology story: we have reduced the number of countries we operate in, reshaped our operating model, strengthened service delivery and built a platform capable of supporting the next phase of growth, including leveraging the accelerating role of AI. Together, these changes position SThree more clearly as the global STEM workforce consultancy, combining specialist talent, workforce solutions and technology-enabled delivery to meet increasingly complex client needs.

Our recent 40^th anniversary provided a timely opportunity to reflect on how far the business has evolved. From a single-office recruitment firm in London, we have grown into a STEM workforce consultancy that is deeply embedded in client operations across Europe, the USA, and the Middle East and Asia. This milestone also reinforces our conviction in the enduring importance of STEM skills, which remain central to innovation, workforce evolution and long-term client demand. With a major phase of transformation complete, we enter the next chapter with strong foundations and a clear line of sight on the opportunity ahead.

Market

Macroeconomic conditions have remained mixed, as geopolitical tensions continue to create uncertainty. At the same time, AI is accelerating change across both client organisations and the staffing sector, influencing workforce demand, hiring models and the services clients increasingly require. While the implications will continue to evolve, we remain confident this reinforces long-term demand for specialist STEM talent, particularly in areas aligned to innovation, digital transformation and workforce modernisation, where many industries remain at an early stage. It also strengthens the need for partners able to offer expertise and a wider range of solutions alongside talent, as clients navigate evolving resourcing requirements.

Strategic Pillars

We structure our growth strategy around five pillars: Places, Platform, Proposition, People and Customers. Together, these provide a single, coherent framework that connects how we invest, operate and serve our markets.

Places - being in the right markets and skills

Our 'Market Investment' framework continues to inform how we deploy resources more effectively, strengthen our competitive position and prioritise geographies, candidate skills and client segments where we see the greatest opportunity. In recent periods, this has increased our focus on the USA and Japan. In the USA, demand for Energy and Technology skills remains strong, supported by investment in grid hardening and electrification. Additionally, there is broader investment across the AI value chain, including data centre construction and AI-linked energy infrastructure. Japan continues to offer an attractive permanent market across all skill verticals, particularly Technology, where strong demand is underpinned by client investment in digital transformation, AI enablement and data security capabilities. Encouragingly, this focus is increasingly reflected in the Group's performance, with strong growth in the USA and continued double-digit growth in Japan.

In Germany, one of our largest markets, we expect the fiscal stimulus announced last year to build progressively and flow through more meaningfully from 2027 onwards as implementation gathers pace. While public investment has picked up, particularly in defence, this has so far been largely financed from the €100 billion special fund established following the invasion of Ukraine in 2022. Despite the government accelerating planning and approval procedures, disbursement of the €500 billion fiscal programme remains gradual, with €14 billion spent in 2025, below initial plans, reflecting the phased rollout and inherent lag in large-scale infrastructure spending. As disbursement broadens beyond initial defence-led spending, the increased investment is expected to support activity across areas such as the Public Sector, Construction and related STEM-intensive fields, where we are well-positioned to support.

More broadly, increasing legislative complexity around contract labour is reinforcing the importance of scale, compliance capability and financial strength, which we believe should favour well-capitalised providers with strong compliance capability, such as SThree. Our focus on Contract and Employed Contractor Model (ECM) positions us in more resilient parts of the workforce value chain, where clients rely on providers not only for access to talent, but also for payroll, compliance, working capital management and regulatory risk oversight.

Platform - the scalable platform advantage

H1 marked the first full reporting period in which the Group operated entirely on a single, standardised order-to-cash platform, following completion of the TIP rollout across all countries last year. With the platform now embedded, our focus has shifted from implementation to optimisation through service development, platform enhancements and AI integration with more sustained benefits visible.

In Contract, which represents around 85% of Group Net Fees, TIP is now delivering measurable operational benefits. Against H1 FY23, the last complete half-year period before the rollout, the Group has seen stronger client engagement, improved pipeline quality and faster delivery, with client meetings per consultant up 69%, A-grade jobs per consultant, representing our highest quality mandate, up 41% and time-to-placement reduced by one day. Together, these improvements are supporting higher consultant productivity across the Contract business, with placements per consultant up 6%.

TIP is also creating broader strategic value by establishing a unified data lake and single global view of clients and candidates. This reduces duplication, creates one source of truth for performance management and decision-making, and provides a stronger foundation for more targeted sales activity, service-led revenue opportunities and scalable, AI-enabled tools over time.

Proposition - from staffing to workforce solutions

The sharpening of our proposition and brand refresh last year has enabled us to articulate more clearly and consistently the value SThree already brings to clients. With more sophisticated workforce demands, clients increasingly require guidance, delivery support and broader workforce solutions tailored to their specific challenges. By building our offering around speed and quality, STEM expertise and strategic workforce consulting, and by clearly conveying our capabilities, we are advancing our ability to differentiate from traditional staffing providers. This enables us to win more complex, higher-value opportunities, as has been seen in the USA where this model is well established. These opportunities create scope for us to deepen relationships across our established client base.

People - the human advantage

The full value of our transformation is realised through our people. The long-standing SThree blueprint is being brought to life through the TIP implementation being paired with investment in training and change management. TIP enables us to have a common way of operating across all our markets, leveraging best practice. We are embedding a high-performance culture across our sales function through our AIR⁽¹⁾ and PACE⁽²⁾ performance frameworks, supported by the rollout of our unified HR platform, SuccessFactors. This is important because it demonstrates that technology only creates value when matched by the capability of people to use it effectively, within a holistic approach that includes skills, mindset and governance.

Underpinning these initiatives is a more fundamental reshaping of how our organisation is structured to drive consistent, high-quality execution across the Group. In the first half of this year, the successful conclusion of our TIP programme enabled us to establish a centralised Shared Service Centre in Glasgow for our Candidate Operations. We introduced standardised processes run by expert teams which were previously fragmented across our markets. This improves control, strengthens data quality and, importantly, begins to decouple growth in net fees from growth in support costs, creating a scalable operating model in which higher volumes can be absorbed through a standardised platform and shared services infrastructure rather than local replication. In turn, this supports a leaner transactional base and a greater concentration of experienced, client-facing expertise in revenue-generating roles.

Customer - deep understanding of customer needs

Our 'Customer' pillar is focused on generating growth through deeper client relationships, stronger candidate networks, and greater exposure to larger enterprise accounts, where demand has been more resilient. As we centralise and automate routine activity, our consultants are increasingly freed to do what technology cannot: understand a client's workforce challenges, advise on them and mobilise the right specialist talent at pace.

Creating value through our pillars

Our pillars work alongside each other, creating a single, differentiated, highly scalable business model. They generate value for our customers through our technology, our expert people, and our comprehensive range of services, and support better outcomes for customers in the most attractive STEM markets. We are constantly evolving and moving forwards to ensure that our standardised, data-rich platform strengthens efficiency, control and insight; a broader proposition deepens client relationships and gives our teams more to offer; and our people are able to convert these capabilities into better and faster execution through consultative-led expertise. The result is our clients receive the service quality they need, at pace - driven by higher productivity, an operating structure weighted to more fee earners, and a lower cost to serve. All of these factors enable us to generate more value for clients.

 

Delivering impact beyond our business

We remain committed to sustainability and long-term positive impact as a fundamental driver of value creation. Our progress includes:

·	Net Zero ambition: progress towards Net Zero across Scope 1, 2 and 3 emissions by 2050. By the end of FY25, our Scope 1 and 2 emissions declined by 40% and our Scope 3 emissions reduced by 41% against our FY19 baseline.
·	Gender diversity in leadership: aligned to the FTSE Women Leaders Review with women representing 50% of our Board and 43% of leadership positions as of H1 FY26.
·	Ethnic diversity: in line with the Parker Review, maintaining at least one Board member from an ethnic minority background and progressing towards 18% ethnic minority representation in UK leadership by FY27; current representation is 9%, based on 55% of our leaders disclosing their ethnicity.

 

Current trading and outlook

Whilst mindful of continued macro and geopolitical uncertainty, we enter the second half with cautious optimism. We are seeing improving momentum in select markets, notably the USA and Japan, where our targeted initiatives are delivering. Encouragingly, new business activity has shown improving momentum across the Group through the half, supported by stronger productivity and greater operational efficiency.

The strategic and proactive initiatives we started in FY22 are now delivering improved customer outcomes, higher productivity and supporting more scalable growth over time. We believe the combination of our continuously enhancing technology platform, reshaped operating model, resilient Contract-led business and specialist STEM focus position us well to capture market demand and benefit from the longer-term workforce trends.

As our data continues to build within a unified platform, we expect the strategic advantage created by this transformation to widen over time, strengthening both our competitive position and most importantly the value we can deliver to clients. Industry research highlights operating model and data limitations as key barriers to scaling AI⁽³⁾. We believe that the winners will be AI enabled businesses, including agentic AI. But having the technology is not enough: the end-to-end processes that sit behind the technology are just as important. This supports our conviction that the end-to-end transformation we have undertaken across all aspects of our business positions us at the forefront in addressing both barriers and sets us up for continued innovation. Supported by a robust balance sheet, we remain confident in the long-term value of the transformation and in our ability to deliver sustainable growth over time.

 

Notes:
⁽¹⁾ Attitude, Input, Results

⁽²⁾ Prioritise with purpose, Accelerate progress, Control the controllables, and Evaluate and energise

⁽³⁾ McKinsey, Building the foundations for agentic AI at scale

 

 

 

Group FINANCIAL AND OPERATIONAL REVIEW

 

Overview

Trading conditions across the first half remained mixed, with ongoing macroeconomic uncertainty continuing to influence client hiring behaviour. Against this backdrop, the Group delivered a resilient performance (overall, total net fees declined 7% YoY), underpinned by improving momentum through the period and clear evidence of progress in operational execution.

Performance was characterised by geographical divergence. Growth in the USA and Japan reflected stronger demand in structurally attractive STEM markets and increasing client investment in areas linked to power generation, digital transformation and the AI value chain. This was offset by more challenging conditions in Europe, where subdued business confidence continued to weigh on performance, particularly in DACH and the Netherlands.

The Group's Contract-focused model continues to provide stability (Contract net fees down 8% YoY), with resilient levels of contract extensions and a substantial order book supporting forward visibility. New business activity was stable year-on-year and improved quarter-on-quarter, with 6 out of 11 Contract countries delivering growth year-on-year. This was supported by productivity gains, as measured by placements per consultant, underpinned by the early benefits of the Group's technology platform.

Our Permanent business declined 5% YoY, which was a significant reduction in the rate of decline in the prior year, driven by strong double-digit growth in Japan.

Across the portfolio, sector dynamics remained consistent with recent periods. Engineering showed relative resilience (down 1% YoY), supported by continued strength in the Energy segment, particularly in the USA. Life Sciences and Technology were more exposed to softer client demand across core European countries (down 8% and 14% YoY, respectively).

The Group's historic measure of productivity⁽¹⁾ increased 9% YoY, as net fees declined by 7% compared with a 15% reduction in average headcount. This builds on the 5% productivity improvement delivered in H2 FY25. The reduction in average headcount reflects the careful management of natural churn, continued selectivity in hiring and the ongoing realisation of cost optimisation initiatives.

From an operational perspective, the Group has continued to prioritise efficiency and productivity, with reduced headcount and tighter cost control partially offsetting the impact of lower net fees. The Technology Improvement Programme (TIP) is now contributing tangible benefits, enabling better productivity per head and supporting a more scalable operating model. Overall, the Group delivered operating profit of £3.4 million (H1 FY25: £10.0 million), down 65% on a reported basis (down 67% YoY on a like-for-like basis). The reduction reflected lower net fees and £6.4 million of non-recurring costs primarily attributable to planned expenditure associated with the cost optimisation programme, partially offset by disciplined cost management and operational focus. As a result, the operating profit conversion ratio reduced to 2.3% (H1 FY25: 6.3%). On an underlying basis, adjusting for material non-recurring costs, operating profit was £9.8 million.

Overall, the first half demonstrates a business that is adapting well to a prolonged softer market, maintaining discipline while positioning itself to benefit from improving conditions. The combination of improved trading momentum, strong contractor order book and ongoing operational improvements provides a solid foundation as the Group moves into the second half.

 

⁽¹⁾ Productivity expressed as net fees / average total employees

 

 

Group net fees	% of Group	H1 FY26 (£'000)	H1 FY25 (£'000)	Variance
				Reported	Like-for-like (2)
Geographical mix
DACH	32%	47,399	53,188	-11%	-15%
USA	28%	41,838	39,378	6%	12%
Netherlands including Spain	18%	26,879	32,108	-16%	-19%
Rest of Europe	16%	22,699	25,661	-12%	-14%
Middle East & Asia	6%	8,849	8,731	1%	16%
Total	100%	147,664	159,066	-7%	-7%
Skills mix
Technology	43%	62,951	72,227	-13%	-14%
Engineering	32%	47,109	48,312	-2%	-1%
Life Sciences	16%	24,172	26,410	-8%	-8%
Other	9%	13,432	12,117	11%	12%
Total	100%	147,664	159,066	-7%	-7%
Service mix
Contract	85%	124,873	133,840	-7%	-8%
Permanent	15%	22,791	25,226	-10%	-5%
Total	100%	147,664	159,066	-7%	-7%

⁽²⁾ Variance compares reported H1 FY26 against reported H1 FY25 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 market investment model enables us to continually review our markets to prioritise investments where we see opportunities for growth and the strongest returns. Our top three countries represent 72% of Group net fees, with Germany contributing 29%, the USA 28% and the Netherlands 15%.

The business remains weighted towards Contract, which represents 85% of Group net fees. It is supported by a substantial contractor order book that provides sector leading visibility of recognisable net fees. Our Contract business declined by 8% on a like-for-like basis in the half, with average sales headcount down 15%. Our Permanent business, representing 15% of the Group, declined 5% YoY, reflecting a strong improvement on the rate of decline in the prior year, driven by Japan and despite an 18% reduction in average sales headcount.

From a geographical perspective, the Group's concentration in its largest markets continues to shape overall performance. While Europe remains more subdued, growth in the USA and Japan reflects the benefits of targeted investment in structurally attractive STEM markets and a focus on higher-growth sectors.

Across skill verticals, Engineering, representing 32% of Group net fees, continues to demonstrate relative resilience (down only 1% YoY), driven by demand in its Energy segment (up 8% YoY). Life Sciences and Technology remain more exposed to softer hiring conditions in core European countries (Life Sciences declined by 8%, while Technology net fees decreased by 14% YoY), and now represent 16% and 43% of Group net fees, respectively. Other, representing 9% of Group net fees, increased by 12% YoY, reflecting increased demand for Banking and Finance roles, particularly in the USA, Japan and Belgium.

 

 

Operational review by reporting segment

 

DACH (32% of Group net fees)

	H1 FY26	H1 FY25	Variance
Performance highlights			Reported	Like-for-like
Revenue (£'000)	176,522	196,151	-10%	-14%
Net fees (£'000)	47,399	53,188	-11%	-15%
Average headcount (FTE)	583	737	-21%	n/a

 

·	DACH remains the Group's largest region, comprising businesses in Austria, Germany and Switzerland, with Germany accounting for 89% of regional net fees. Net fees declined by 15% YoY, with Contract down 13% and Permanent down 21%, reflecting continued subdued market conditions.
·	Germany saw Contract decline 12% YoY, with overall net fees down 14%, reflecting lower levels of demand for Technology skills (down 18%), its largest vertical, particularly in software development, amid an ongoing shift in demand towards ERP cloud migration and roles across the AI value chain. Performance continues to reflect a challenging trading environment, with the expected uplift in job flows from the reform of the debt brake and the government's €500 billion investment fund yet to emerge. The business' positioning in sectors such as Defence, Public Sector and Construction remains well aligned with areas where the increased investment is expected to come through.
·	Switzerland net fees declined 24% YoY, driven mainly by Engineering (down 55%) and Technology (down 15%), with broader market softness reflecting continued cautious client sentiment.
·	Austria net fees declined 19% YoY, due to reduced demand for Technology roles, in line with weaker business confidence.

 

 

USA (28% of Group net fees)

	H1 FY26	H1 FY25	Variance
Performance highlights			Reported	Like-for-like
Revenue (£'000)	146,769	140,360	5%	10%
Net fees (£'000)	41,838	39,378	6%	12%
Average headcount (FTE)	363	379	-4%	n/a

 

·	The USA is the world's largest specialist STEM staffing market and the Group's second-largest region by net fees. It is a key area of focus for the Group, and we will continue to invest in the region as we align our resources with the best long-term opportunities.
·	In the first half of the year, our USA business delivered strong growth, with net fees up 12% YoY, including a particularly strong second quarter, up 15% YoY.
·	Contract net fees maintained strong momentum, growing 14% YoY, supported by robust demand for Engineering and Technology skills linked to power generation and the AI value chain. This reflects sector-wide investment to meet rising electricity demand from AI applications, data centres and electric mobility, alongside ongoing grid modernisation to address climate-related challenges.
·	Permanent net fees declined 5% YoY, with performance improving significantly in Q2 (growing 10%), supported by demand within the Life Sciences vertical.

 

 

Netherlands including Spain (18% of Group net fees)

	H1 FY26	H1 FY25	Variance
Performance highlights			Reported	Like-for-like
Revenue (£'000)	124,058	143,195	-13%	-16%
Net fees (£'000)	26,879	32,108	-16%	-19%
Average headcount (FTE)	329	399	-18%	n/a

 

·	The region saw net fees decline by 19% YoY, with Contract down 20% and Permanent down 8%.
·	The Netherlands, the larger of the two countries (84% of regional net fees), delivered net fees down 24% YoY. Results were largely driven by a soft performance within the country's two largest skill verticals, Technology and Engineering, with the rate of decline moderating through the half. Having sustained positive performance for longer than the Group's other major countries, prior year comparators are beginning to ease, albeit against a backdrop of ongoing macroeconomic and regulatory headwinds.
·	Spain delivered net fee growth of 18% YoY, reflecting strong demand for Technology skills (up 15%), its core discipline, and continued growth in Engineering (up 52%), demonstrating relative strength versus the wider region.

 

 

Rest of Europe (16% of Group net fees)

	H1 FY26	H1 FY25	Variance
Performance highlights			Reported	Like-for-like
Revenue (£'000)	132,583	148,662	-11%	-13%
Net fees (£'000)	22,699	25,661	-12%	-14%
Average headcount (FTE)*	314	416	-25%	n/a

*Excludes central headcount located in the UK.

·	Rest of Europe comprises the UK, Belgium and France, with business confidence across the region remaining subdued against a backdrop of persistent market uncertainty and weaker hiring demand. Net fees declined by 14% YoY, with Contract (representing 97% of regional net fees) and Permanent both down 14%.
·	The UK, the largest country in the region (51% of net fees), saw net fees decline 19% YoY, driven by reduced demand for Technology skills (down 23%), its core discipline, consistent with softer labour market conditions and lower vacancy levels.
·	Belgium, the region's second largest country (30% of net fees), delivered a solid performance, with net fees flat YoY supported by continued demand for Life Sciences and Engineering roles.
·	France saw net fees down 15% YoY, reflecting weaker demand in Life Sciences and Technology.

 

 

Middle East & Asia (6% of Group net fees)

	H1 FY26	H1 FY25	Variance
Performance highlights			Reported	Like-for-like
Revenue (£'000)	18,861	20,454	-8%	5%
Net fees (£'000)	8,849	8,731	1%	16%
Average headcount (FTE)	218	220	-1%	n/a

 

·	The Middle East & Asia region, comprising Japan and the UAE, accounts for 6% of Group net fees. Net fees grew by 16% YoY, driven by a strong performance in Permanent (76% of regional net fees), up 19%, with growth in Contract of 8%.
·	Japan, which represents approximately 76% of the region, delivered a strong performance, with net fees up 36% YoY, reflecting sustained demand across all skill verticals, and particularly Technology roles where demand is underpinned by client investment in digital transformation, AI enablement, and data security capabilities.
·	Net fees in UAE declined by 31% YoY, reflecting reduced demand across all verticals following recent events in the region. At this stage, the impact appears to be localised to the UAE business, which represents approximately 1% of Group net fees.

 

Chief financial officer's REVIEW  

The Group's first-half performance reflected improving business trends, as the rate of decline moderated through the period, despite a complex macro environment.

Income statement

On a reported basis revenue for the half year decreased by 8% to £598.8 million (H1 FY25: £648.8 million), while net fees declined by 7% to £147.7 million (H1 FY25 £159.1 million). Movements in foreign exchange had a negligible impact during the period. On a constant currency basis, net fees decreased by 7% YoY.

Contract division

Net fees in our Contract business, which represented 85% of the Group net fees for the half year (H1 FY25: 84%), declined by 8% on a like-for-like basis. Extension activity remained resilient and new business activity was stable year-on-year, with 6 out of 11 Contract countries delivering growth year-on-year despite a mid-teens reduction in Group sales headcount reflecting continued productivity gains.

Across our core regions, Contract performance remained mixed. In DACH, Contract net fees declined by 13% YoY, primarily reflecting weaker demand for Technology skills amid subdued client confidence. In the USA, where Contract net fees now account for over 89% of regional net fees, it grew by 14% YoY; the business delivered a strong sequential improvement, supported by robust demand for Engineering and Technology skills linked to power generation and the AI value chain. The Netherlands (including Spain) saw Contract net fee income decline by 20% YoY, driven by reduced demand in Engineering and Technology roles. In the Rest of Europe, Contract performance declined by 14%, while in Middle East & Asia it grew by 8% YoY, supported by Japan's growing Contract business.

By skill vertical, Engineering remained relatively resilient, down 1% YoY, supported by demand in energy-related markets. In contrast, Life Sciences and Technology declined by 8% and 14%, respectively, reflecting weaker demand across our European countries. Specifically within Technology, there has been a continued shift in demand for candidate skills from software development to ERP systems being transitioned from a private to the public cloud, and to roles across the AI value chain.

The Group Contract net fee margin (Contract net fees as a percentage of Contract revenue)⁽¹⁾ remained broadly consistent at 21.7% (H1 FY25: 21.5%), reflecting the ongoing focus on pricing discipline and service mix.

The contractor order book closed at £157.2 million, up 3% YoY. This was our first period of growth in the contract book since Q1 FY23 and was underpinned by strong momentum in the USA, alongside Japan and Spain, and a broader moderation in the rate of decline across other countries. The contractor order book represents the equivalent of around five months' of net fees and provides sector leading visibility. As net fees are recognised monthly, the order book reflects contracted revenue yet to be realised and provides resilience in softer markets as contracts run off. In a market recovery, the Board would expect the order book to build gradually as new placements exceed contract completions.

Permanent division

Permanent net fee income declined 5% YoY on a like-for-like basis. Growth in the Middle East & Asia region (up 19% YoY), supported by Technology and Engineering skill demand, only partially offset the decline in DACH (down 21% YoY), primarily due to weaker Technology demand. In the USA, net fees fell 5% amid slower hiring earlier in the period, although Q2 improved significantly (growing 10% YoY), driven by demand within the Life Sciences vertical. Smaller regions, including the Netherlands (including Spain) and Rest of Europe, declined 8% and 14% respectively, largely reflecting softer Engineering role demand.

Operating profit

Operating expenses declined by 3% YoY on a like-for-like basis to £144.2 million (H1 FY25: £149.1 million), driven by disciplined cost management and operational focus. Operating profit decreased to £3.4 million (H1 FY25: £10.0 million), down 67% YoY on a like-for-like basis, with the operating profit conversion ratio⁽¹⁾ falling to 2.3% (H1 FY25: 6.3%). Ongoing soft economic conditions, particularly in Europe, impacted net fees, alongside first half costs relating to the cost optimisation programme, partly offset by disciplined cost management and early efficiency gains from streamlined operations, including the removal of redundant back and middle office roles, as well as non-fee earner front-office management layers. On an underlying basis, adjusting for material, non-recurring costs, operating profit was £9.8 million.

EBITDA

As depreciation and amortisation are expected to increase over time, reflecting ongoing investment in the Group's technology platform and the release of developed assets into active use, EBITDA provides a useful measure of the Group's underlying operating performance.

EBITDA for the period was £13.9 million (H1 FY25: £20.8 million), a decrease of 33% YoY on a reported basis, reflecting primarily lower operating profit. Non-cash expenses remained broadly stable compared with the prior period. Amortisation increased by £0.7 million, reflecting investment in the Group's technology platform brought into use towards the end of H1 FY25. This increase was largely offset by lower depreciation of lease assets, resulting in a net increase of only £0.2 million in depreciation and amortisation. The net increase was more than offset by a £0.7 million reduction in employee share option charges. On an underlying basis, adjusting for material, non-recurring costs, EBITDA was £20.3 million.

For further details of EBITDA components, please see note 15 accompanying the consolidated interim financial statements.

 

Net finance cost

The Group incurred net finance cost of £0.7 million (H1 FY25: £0.1 million net finance income), which included interest income of £0.4 million (H1 FY25: £1.0 million) earned on the Group's bank deposits, offset by the interest charge on lease liabilities of £1.1 million.

Income tax

The tax charge for the half year amounted to £0.2 million (H1 FY25: £2.9 million). The reported effective tax rate (ETR) for the period was 5.9%, reflecting £0.7 million of adjustments, which included a prior year credit of £0.5 million and a one-off recognition of previously unrecognised deferred tax assets of £0.2 million. The underlying ETR for the full year is expected to be approximately 25.0% (H1 FY25: 28.5%).

The Group's ETR continues to vary primarily with the geographic mix of taxable profits, non-deductibility of the accounting charge for Long-Term Incentive Plans and other one-off tax items.

 

Overall, the reported profit before tax was £2.7 million (H1 FY25: £10.1 million), down 75% YoY on a like-for-like basis and down 73% on a reported basis.

The reported profit after tax was £2.6 million (H1 FY25: £7.2 million), down 67% YoY on a like-for-like basis and down 64% on a reported basis.

 

Earnings per share (EPS)

The basic EPS was 2.1 pence (H1 FY25: 5.6 pence). The YoY decrease reflects overall trading performance and planned, material non-recurring costs, partly offset by a lower tax charge and a reduced weighted average number of shares following the buyback and cancellation of 3.6 million shares in H1 FY26. Diluted EPS was 2.0 pence (H1 FY25: 5.5 pence). Dilution primarily reflects share-based incentives, including outstanding share options and the expected future settlement of vested tracker shares. The dilutive impact of tracker shares will vary in future periods, depending on the profitability of the underlying tracker businesses and the timing of settlement.

 

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 maintained at 5.1 pence (H1 FY25: 5.1 pence) per share, amounting to £6.4 million in total. It will be paid on 11 December 2026 to shareholders on the register on 13 November 2026. The Board's decision to maintain the dividend in line with last year represents a second consecutive departure from its stated dividend policy, reflecting a considered assessment of the Group's trading performance to date and its future outlook, underpinned by a robust balance sheet and underscores the Board's commitment to returning surplus capital to shareholders where appropriate. The Board will continue to keep the suitability of its capital allocation policy under review.

 

Liquidity management

In H1 FY26, cash generated from operations was £3.3 million (H1 FY25: £21.7 million), driven by lower EBITDA⁽¹⁾ and adverse working capital movements.  

Income tax paid decreased to £3.4 million (H1 FY25: £5.3 million), primarily reflecting reduced trading performance.

Capital expenditure was £4.1 million (H1 FY25: £4.5 million), reflecting continued investment in the Group's technology platform and operating model, including optimisation of the platform, enhancements and increased integration of AI capabilities.

The Group paid £6.2 million in rent, including principal and interest (H1 FY25: £6.9 million). Interest income was £0.4 million (H1 FY25: interest income £1.0 million). The Group also spent £8.5 million (H1 FY25: £20.9 million) on share purchases, comprising £6.0 million of shares bought back and cancelled under the share buyback programme, and £2.5 million of shares purchased by the Employee Benefit Trust for future share option settlements.

Dividend payments were £6.5 million (H1 FY25 £6.8 million), comprising the FY25 interim dividend paid in December 2025.

Foreign exchange had a negligible negative impact of less than £0.1 million (H1 FY25: £0.1 million adverse impact).

Overall, net cash declined to £43.0 million (FY25: £68.0 million), reflecting lower underlying cash generation resulting from reduced operating profit and increased working capital investment.

 

Accessible funding

The Group's capital allocation priorities are financed mainly by retained earnings and cash generated from operations, and a £50.0 million Revolving Credit Facility (RCF). The Group also has access to 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 had not drawn down any of the credit facilities (H1 FY25: £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 2026, the Group had total accessible liquidity of £98.0 million (H1 FY25: £102.8 million), made up of £43.0 million in net cash, 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 January 2026:

 

-	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(2).
-	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 £6.0 million to shareholders through its share buyback programme. This resulted in the purchase and cancellation of 3.6 million ordinary shares at an average price of 165 pence per share in the first half of the year.

⁽¹⁾ The Group has identified and defined certain alternative performance measures (APMs). These are the key measures the Directors use to assess SThree's underlying operational and financial performance. The APMs are fully explained and reconciled to IFRS line items in note 15.

⁽²⁾ In certain circumstances, the Board may exercise its discretion to depart from this policy, subject to careful and ongoing assessment of the Group's trading performance, future outlook, and balance sheet position. Any such departure would be considered as part of the Group's established dividend review schedule, and only where deemed appropriate in light of prevailing conditions.

 

 

PRINCIPAL RISKS AND UNCERTAINTIES

Risk management is a key part of our business, values and culture. Effective risk management enables us as a business to protect value and 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 H1 FY26, there continued 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 macroeconomic 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 FY26 remain consistent with those risks described in the 'Risk management' section of SThree plc Annual Report and Accounts FY25 (pages 76-83). Whilst the wording of the People risk statement has been amended to ensure closer alignment with the Group's strategic priorities, this has not resulted in change to the underlying risk assessment. The principal risks which have changed from FY25 year-end are detailed below. All other principal risks for the Group: Industry innovation, Client strategy, Credit collection, Contractual liability, Cyber security, Macroeconomic environment and Regulatory compliance, remain unchanged, although mitigating activities have continued to progress.

Risk	Mitigation	Change from FY25 year end
Data Privacy SThree is at risk of suffering lost revenue, reputational damage and regulatory sanctions due to regulatory non-compliance and contractual failings as it relates to its personal data protection obligations.	·      Data privacy framework ·      Yearly mandatory data privacy training ·      Data retention policy and processes ·      DSAR processes ·      Data privacy platform	Increased net risk as a result of a variety of factors, including increase in regulatory enforcement climate.
Strategic Change SThree is at risk of financial and operational damage if it fails to effectively manage and implement strategic change, resulting in poorly implemented projects, inefficient use of resources and reduced ability to execute the Group's strategy.	·      Sales technology product forum ·      Portfolio demand forum ·      Regular Project risk reviews ·      Employee feedback sessions	Net risk has increased as industry and technology innovation elevate the requirement to effectively manage and implement strategic change programmes.

 

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 FY25 Annual Report and Accounts for further detail on our risks, available at 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 issued by the IASB and 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 taken as a whole, in accordance with DTR 4.2.4R of the FCA's Disclosure Guidance and Transparency Rules; and
b)	the half-year results announcement includes a fair review of the information required by DTR 4.2.7R, being an indication of significant events that have occurred during the six months ended 31 May 2026 and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year ending 30 November 2026; and
c)	the interim management report includes a description of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

                                                                               

The Directors of SThree plc are listed in the SThree plc Annual Report and Accounts for the year ended 30 November 2025. A current list of Directors is also available on the Group's website, www.sthree.com.

The Group's condensed consolidated interim financial statements, and related notes, were approved by the Board and authorised for issue on 21 July 2026 and were signed on its behalf by:

                               

 

 

Timo Lehne                                                             Damian Fehrenberg                                               

Chief Executive Officer                                           Interim Chief Financial Officer              

 

20 July 2026

 

 

 

Condensed consolidated income statement

for the six months ended 31 May 2026

 

 

£'000	Note	(Unaudited) Six months ended 31 May 2026	(Unaudited) Six months ended 31 May 2025
Continuing operations
Revenue	2	598,793	648,822
Cost of sales		(451,129)	(489,756)
Net fees	2	147,664	159,066
Administrative expenses	3	(141,428)	(148,499)
Impairment losses on financial assets		(2,794)	(603)
Operating profit		3,442	9,964
Finance income		461	1,029
Finance costs		(1,174)	(922)
Profit before income tax		2,729	10,071
Income tax expense	4	(162)	(2,870)
Profit for the period attributable to the owners of the Company		2,567	7,201
Earnings per share attributable to shareholders
pence
Total Group
Basic	5	2.1	5.6
Diluted	5	2.0	5.5

 

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 2026

 

		(Unaudited)	(Unaudited)
		Six months ended	Six months ended
£'000		31 May 2026	31 May 2025
Profit for the period		2,567	7,201
Other comprehensive loss
Items that may be subsequently reclassified to income statement:
Exchange differences on retranslation of foreign operations		(2,302)	(2,568)
Other comprehensive loss for the period (net of tax)		(2,302)	(2,568)
Total comprehensive income for the period attributable to owners of the Company		265	4,633

 

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Condensed consolidated statement of financial position

as at 31 May 2026

 

				(Unaudited) As at 31 May 2026	(Audited) As at 30 November 2025
£'000		Note
ASSETS
Non-current assets
Property, plant and equipment				55,270	54,051
Intangible assets		6		16,677	15,968
Deferred tax assets				3,413	3,292
Total non-current assets				75,360	73,311
Current assets
Trade and other receivables				302,557	330,890
Current tax assets				2,013	11,242
Cash and cash equivalents		7		42,985	67,962
Total current assets				347,555	410,094
Total assets				422,915	483,405
EQUITY AND LIABILITIES
Equity attributable to owners of the Company
Share capital		8		1,242	1,279
Share premium		8		42,141	42,141
Other reserves				411	3,219
Retained earnings				166,972	188,457
Total equity				210,766	235,096
Current liabilities
Trade and other payables				156,678	182,922
Lease liabilities		9		9,786	10,549
Provisions				3,124	2,831
Current tax liabilities				-	11,635
Total current liabilities				169,588	207,937
Non-current liabilities
Lease liabilities		9		39,221	36,952
Provisions				3,340	2,581
Deferred tax liabilities				-	839
Total non-current liabilities				42,561	40,372
Total liabilities				212,149	248,309
Total equity and liabilities				422,915	483,405
The accompanying notes form an integral part of these condensed consolidated interim financial statements.