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SThree PLC shares plunged on Tuesday as the company warned of a £20 million hit to profit in the next financial year due to continued subdued hiring activity. Shares in SThree were down 20% at 148.40 pence in London on Tuesday morning. The stock is down 62% over the last twelve months. The London-based science, technology, engineering and mathematics-focused recruiter said net fees in the third quarter to the end of August tumbled 12% on-year at constant currency. It noted this was a ‘modest sequential improvement quarter-on-quarter’ due to a return to US growth during the period. The company said net fees in the Contract division, which makes up 83% of net fees, were down 13% while fees in the Permanent division slumped 5%. The contractor order book was down 6% at £156 million, SThree added. The performance for the 2025 financial year to the end of November is expected to be in line with previously announced £25 million pretax profit guidance, SThree noted. In financial 2024, pretax profit fell 13% to £67.6 million from £77.9 million a year prior. SThree noted that it has seen ‘positive momentum in certain markets and verticals’ but said macro uncertainty has remained for longer than expected, which has impacted levels of new business activity. ‘As a result, the board is now taking the prudent view that this subdued activity will continue into [financial 2026],’ SThree said. It said persistent softness in new business activity is expected to impact financial 2026 pretax profit consensus by around £20 million. SThree expects this to result in a pretax profit of around £10 million for financial 2026, compared to the current company-compiled consensus of £30.5 million. It will invest further in next generation artificial intelligence, as its technology improvement programme rollout nears completion. It will also invest in a further cost optimisation programme in financial 2026. SThree added that it intends to start a further share buyback programme in financial 2026 in line with its capital allocation policy. ‘Our [third quarter] performance demonstrates a continuation of the positive momentum as reported at the half year across certain segments and markets,’ said Chief Executive Timo Lehne. ‘A key factor currently offsetting this growth, is the challenges within our two largest markets in continental Europe, Germany and the Netherlands, and our focus is on ensuring we are well placed for when these markets turn.’ CEO Lehne added: ‘As we look further ahead, we are encouraged by pockets of improving momentum, however we have not yet seen a broader market recovery and, prudently, do not think this will start to materialise near-term, albeit not worsen.’ Copyright 2025 Alliance News Ltd. All Rights Reserved.
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