SThree profits drop amid 'challenging' environment; outlook cautiously optmistic

(Sharecast News) - Recruiter SThree posted a fall in full-year profit on Tuesday as group net fees declined in a "challenging macroeconomic environment", but announced a further £20m share buyback and said it was cautiously optimistic about the outlook. In the year to 30 November 2025, pre-tax profit slumped 62% to £25.5m, with total revenue down 13% to £1.3bn and group net fees 13% lower at £322.7m.

Engineering net fees fell 6% year-on-year, supported by strong demand in the USA. Meanwhile, fees in life sciences and technology declined more sharply, by 13% and 18% respectively, amid ongoing market uncertainty.

SThree said its three largest countries accounted for 72% of group net fees. The USA saw 4% growth in fees, while Germany and the Netherlands saw fees drop 16% and 21% respectively.

The company said the past year has been "another challenging period" as the widespread recovery it was expecting did not fully materialise and market conditions remained uncertain. Nevertheless, its full-year performance was in line with guidance set at the start of the year, and SThree noted growth in two of its top five countries, the USA and Japan.

"Pleasingly, we saw improved momentum in new business activity through Q4, which gives us confidence that the environment is stabilising and underpins the reiteration of FY26 PBT guidance given in September 2025," it said. Guidance is for FY25 pre-tax profit of about £10m.

Despite the drop in profits and revenue, the recruiter announced the launch of a further buyback programme of up to £20m, "in light of the group's strong cash generation and balance sheet".

Chief executive Timo Lehne said: "In a year marked by ongoing macro uncertainty, the group delivered FY25 results in line with expectations, alongside material operational enhancements. We are pleased with the quality of our performance, underpinned by robust extensions with existing clients, improving new placement activity, and growth in two of our top five countries. This reflects the strategic value of our specialist STEM workforce consultancy model, which continues to align closely with critical skills demand across our markets.

"We enter the new year with cautious optimism. Early signs of improvement are continuing in selected areas, our proposition remains well aligned to long-term workforce demand trends, and our service capabilities have been materially strengthened. Whilst new business remains challenging, and broader market recovery is yet to materialise, the investments made in recent years leave us well positioned to navigate the near-term environment and capitalise on new growth opportunities."

At 0807 GMT, the shares were up 5.1% at 193.40p.