SThree (LSE:STEM) reported lower first-half FY26 results as softer trading conditions across key European markets weighed on performance, with net fees declining 7% year on year to £147.7 million. Revenue and profit also fell during the period, although strong performances in the U.S. and Japan, together with resilient contract renewals and a contractor order book that increased 3%, helped cushion the overall slowdown. The contractor book now represents approximately five months of net fees, providing good visibility for future revenue.
Operating profit declined significantly, reflecting lower net fees and £6.4 million of one-off costs associated with the company’s cost optimisation programme. Despite these pressures, disciplined expense management enabled SThree to maintain its interim dividend at 5.1 pence per share. The group also continues to invest in its cloud-based operating platform, using AI-enabled sales tools and technology to improve productivity. Management reaffirmed its full-year profit guidance, citing improving new business activity and strengthening momentum across a growing number of markets.
SThree’s outlook continues to benefit from solid cash generation and a healthy balance sheet, although recent declines in revenue growth and operating margins remain a challenge. Technical indicators have improved, suggesting strengthening market momentum, even though the shares continue to trade just below their long-term trend. Valuation also remains relatively attractive, supported by a reasonable earnings multiple and an above-average dividend yield.
About SThree plc
SThree plc is a global STEM talent consultancy specialising in recruitment across engineering, life sciences and technology sectors. The company operates in 11 countries, providing permanent and contract staffing solutions to approximately 6,000 clients in industries where demand for highly skilled professionals remains strong.
With four decades of experience focused exclusively on STEM recruitment, SThree has built leading positions in markets including the United States, Germany, the Netherlands and Japan. Its cloud-based global operating platform supports greater efficiency through shared services, advanced data capabilities and technology-enabled recruitment, helping clients meet increasingly complex workforce requirements.
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