- Full year outlook reaffirmed
- First half net fees fall 14%
- Signs of improvement
A reduced rate of sales decline and reaffirmation of previously announced guidance was sufficient to give specialist recruitment firm SThree (STEM) a 10% boost on Tuesday (24 June).
Shares in the science, technology, engineering and mathematics focused recruiter are down over 40% in the last year following a profit warning on 19 December 2024, when the company slashed its 2025 profit outlook.
The positive price reaction spilled over into larger peers with shares in Hays (HAS) and PageGroup (PAGE) gaining 3% and 3% respectively.
MODEST IMPROVEMENT
Group net fees declined by 14% in the half to May to £159 million, reflecting continued softness in new business across both permanent and contract employment.
This was partially offset by strong contract extensions with the segment (84% of group net fees) showing sequential improvement in the second quarter, driven by performance in the US.
Positive momentum stateside saw a recovery to prior year levels, supported by ‘strong’ demand roles in engineering, the company said.
CEO Timo Lehne commented: ‘We continue to drive operational enhancements to ensure we are well positioned in the best STEM markets and skill verticals, including our internal and go-to-market initiatives in the US which are starting to bear fruit with positive momentum in the region, in line with our expectations.
‘In addition, we are making good progress with the realisation of operational efficiencies, on track with our FY25 plans.
‘As we look forward to an improvement in market conditions, we remain confident in our belief that global megatrends, such as technological advancements and demographic shifts, will continue to shape the future world of work,’ enthused Lehne.
SThree maintained full year pre-tax profit guidance to the end of November of circa £25 million.
The company’s £20 million share buyback was completed on 15 May leaving the group with net cash of £48 million on 31 May. Excluding the buyback net cash was up £15 million in the second quarter, reflecting improved cash collection.