SThree (STEM) H2 2025 earnings summary

Executive summary

• Celebrated 40th anniversary, highlighting resilience and expertise in STEM and flexible talent.

• FY25 performance was in line with expectations, with sequential improvement in Net Fee decline and disciplined cost management amid challenging market conditions.

• Achieved growth in USA and Japan, with strategic focus on high-potential markets.

• Completed global rollout of TIP (Technology Improvement Programme) across 11 countries, modernizing operations and creating a unified platform for scalable growth.

• The business is positioned for future growth, supported by new business activity and a robust balance sheet.

Financial highlights

• Net Fees for FY25 were £322.7m, down 12% year-on-year; revenue was £1,302.2m, also down 12%.

• Operating profit was £26.1m, down 60% year-on-year; profit before tax was £25.5m, down 62%.

• EPS decreased 63% to 13.7p, reflecting lower profits and higher ETR, partially offset by share buyback.

• Contract business (84% of net fees) declined 12%, while permanent placements declined 9%.

• Net cash at year-end was £68.0m, broadly flat after a £20m share buyback.

Outlook and guidance

• Confident in delivering full-year expectations for FY26, with profitability phasing weighted to the first half due to efficiency program costs.

• FY26 profit before tax is expected to be around £10m, underpinned by improved year-end new business activity.

• Investments in TIP expected to drive higher margins and sustainable productivity gains over the mid to long term.

• Efficiency actions are weighted towards H1 FY26, with the business well-placed to benefit as market conditions improve.

• Contract renewal period on track, underpinning rebased expectations for the new year.