SThree : maintains a resilient performance driven by strong contract extensions

• Group net fees for Q1 FY24 down 6% Year on Year (YoY) against a record prior year performance and the ongoing challenge set by market conditions, with Contract (now 84% of net fees) down 2%.
• Contractor order book down 1% YoY to £184 million, representing sector-leading visibility, with the equivalent of circa four months of net fees.
• Strong balance sheet with net cash of £97 million at 29 February 2024 (28 February 2023: £64 million).
• The Group-wide Technology Improvement Programme remains on budget and on plan, with half of SThree offices in Germany now initiated.
• Performance for FY24 currently expected to be in line with market expectations.

Timo Lehne, Chief Executive Officer, commented:

"We have delivered a good performance against a strong comparative year and within a market environment that remains difficult from a new business perspective. Whilst the sentiment we are reporting is much the same as the prior period, the strength of our Contract extensions continues to be a particular highlight, demonstrating our clients' need to retain critical STEM skills and flexible talent.

We continue to make progress with our Technology Improvement Programme, with our new end-to-end integrated platform now fully deployed in the US and initiated in Germany, providing our teams with the digital tools that are key to driving both scale and higher margins in the mid-to-long term.

Whilst we look forward to the easing of the macro environment, our strategic focus, exposure to long-term megatrends, and progress to date in delivering operational enhancements provide us with a resilient and financially robust foundation with the capacity to deliver our ambitions and future growth."

The Group reports a 6% year on year drop in net fees for the quarter, against a record comparative performance in Q1 of FY23 and amid tough global market conditions. On a like-for-like basis, when excluding restructured businesses, net fees are down 5% YoY.

Contract net fees, which now represent 84% of Group net fees, were down 2% YoY. SThree has offset a downturn in new business activity with strong client extensions. The Group's contract order book contributes to sector-leading visibility of the equivalent of circa four months of net fees.

Permanent net fees, representing 16% of Group net fees, are down 21% YoY, reflecting market conditions and an ongoing strategy to focus on Contract in specific markets.

Regionally, the Group saw strong growth in the Middle East and Asia, driven by exceptional performance in Japan. In its three largest markets, which represent 72% of net fees, the Netherlands grew 6%, while the USA and Germany were down 10% and 14% respectively.

From a STEM skills perspective, across both Contract and Permanent, the Group saw continued strong demand for Engineering roles, driven primarily by the Energy sector with renewables the fastest growing segment, while demand for Life Sciences and Technology roles continues to reflect market conditions.

SThree maintains a strong balance sheet with net cash of £97 million at 29 February 2024.
The Group-wide Technology Improvement Programme remains on budget and on plan, with half of the cities in Germany now initiated, in addition to the US rollout in FY23.

Performance for the full year is currently expected to be in line with FY24 market expectations.

View our financial results