18 June 2024
SThree plc
FY24 Half Year Trading
Update
Contract extensions continue
to underpin resilient performance
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 half year ended 31 May
2024.
H1
Highlights
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Group net fees down 7%
YoY(1) despite the ongoing challenging backdrop and
against a strong prior year performance, with Contract down 4% and
now representing 84% of net fees.
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Contractor order
book(2) down only 2% YoY to
£182 million, representing sector-leading visibility, the
equivalent of c.4 months of net fees.
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Strong balance sheet with net cash
of £90 million at 31 May 2024 (31 May 2023: £72
million).
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Technology Improvement Programme
remains on track, with the phased roll-out across Germany well
underway.
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Performance for FY24 currently
expected to be in line with market
expectations(3).
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Timo Lehne, Chief Executive,
commented:
"Against the challenges experienced
by the sector, we are pleased with our trading performance over the
past six months, with strong Contract extensions partially
offsetting continued soft new business activity. The Group's unique
business model, centred on scarce STEM skills and flexible talent
solutions, continues to be a source of strength, aligned to the
strategic priorities of our clients and providing sizeable growth
opportunities across all our key markets. We are well placed to
take full advantage when the market returns.
We continue to execute our growth
strategy, including the phased roll-out of our Technology
Improvement Programme. Following our successful launch in the US,
our deployment in Germany is well underway. We are excited about
the significant enhancements this will bring across our Group over
the mid-to-long term, positioning us at the forefront of our
industry."
Business performance highlights
The Group delivered a good net fee
performance in the first half of the year against the backdrop of a
strong prior year performance and current market conditions, with
net fees down 7% YoY driven by continued softness in new business
across Contract and Permanent, partially offset by strong Contract
extensions.
Across both Contract and Permanent,
the Group continued to see strong demand for Engineering roles,
with record net fees for Engineering, driven primarily by the
Energy sector. Renewables remains the fastest growing segment, up
15% YoY. Life Sciences and Technology performance continues to
reflect ongoing market conditions and record comparatives for
Technology.
Regionally, the Group saw strong
growth in the Middle East and Asia, driven by an exceptional
performance in Japan reflecting growth across all three of our main
skill verticals. Within the Group's largest three markets, which
represent 72% of net fees, the Netherlands achieved robust YoY
growth due to a strong contribution from Engineering, while the USA
was down, driven by declines in Life Sciences and Technology
partially offset by a strong Engineering performance, and Germany
was also down reflecting levels of demand for Technology skills.
The Group remains focused on being
positioned to respond as the market changes, with Group period-end
headcount down slightly versus the end of the last financial
year.
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H1
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H1
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H1 2024
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Q2 2024
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Q1 2024
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Net
fees
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2024
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2023
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YoY (1)
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YoY (1)
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YoY (1)
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Contract
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£158.7m
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£170.0m
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-4%
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-6%
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-2%
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Permanent
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£30.0m
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£38.6m
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-18%
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-15%
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-21%
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GROUP
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£188.7m
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£208.6m
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-7%
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-8%
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-6%
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Regions
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DACH (4)
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£64.2m
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£74.5m
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-12%
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-10%
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-13%
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Netherlands (incl. Spain)
(5)
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£41.1m
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£39.4m
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+7%
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+5%
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+8%
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Rest of Europe (6)
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£31.3m
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£35.2m
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-10%
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-10%
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-10%
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USA
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£41.8m
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£49.4m
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-13%
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-15%
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-10%
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Middle East & Asia (7)
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£10.3m
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£10.1m
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+11%
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+1%
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+20%
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GROUP
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£188.7m
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£208.6m
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-7%
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-8%
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-6%
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Top
five countries
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Germany
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£56.0m
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£65.7m
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-12%
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-11%
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-14%
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Netherlands
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£37.5m
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£37.3m
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+3%
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-
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+6%
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UK
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£20.0m
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£21.9m
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-9%
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-11%
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-7%
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USA
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£41.8m
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£49.4m
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-13%
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-15%
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-10%
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Japan
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£4.8m
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£4.4m
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+27%
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+16%
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+41%
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ROW (8)
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£28.6m
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£29.9m
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-3%
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-2%
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-4%
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Group
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£188.7m
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£208.6m
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-7%
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-8%
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-6%
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Service mix
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H1 2024
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H1 2023
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Contract
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84%
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81%
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Permanent
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16%
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19%
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Skills mix
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H1 2024
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H1 2023
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Technology
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48%
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49%
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Life Sciences
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17%
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19%
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Engineering
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29%
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24%
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Other
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6%
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8%
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(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 £71.0 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, Luxembourg and
Ireland.
(7) Middle East & Asia - Japan, UAE &
Singapore.
(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
FY24 Half Year Trading Update. If you would like to register for
the conference call, please contact SThree@almastrategic.com.
Forward looking dates
The Group will issue its FY24
Half Year Results for the six months ended 31 May 2024 on 23 July
2024. In addition on that same day,
the Group plans to host the third in its series of investor
briefings at 14:00 GMT. This virtual webinar will focus on the
Employed Contractor Model.
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Enquiries:
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SThree plc
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Timo Lehne, CEO
Andrew Beach, CFO
Keren Oser, Investor Relations
Director
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via Alma
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Alma Strategic Communications
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+44
20 3405 0205
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Rebecca Sanders-Hewett
Hilary Buchanan
Sam Modlin
Will Ellis Hancock
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SThree@almastrategic.com
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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 over
7,200 clients across 11 countries. Our Group's c.2,600 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.
- Ends
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