FY24 Final Results

About this update from Sthree Plc

SThree plc   FINAL RESULTS FOR THE YEAR ENDED 30 NOvember 2024   FY24 PERFORMANCE IN LINE  LONG TERM STRATEGIC POSITIONING ADVANCED   SThree plc ('SThree' or the 'Group'), the only global specialist talent partner focused on roles in Science, Technology, Engineering and Mathematics (STEM), today announces its financial results for the year ended 30 November 2024 .   FINANCIAL HIGHLIGHTS   Continuing operations  FY24  FY23 Variance Reported Like-for-like (1) Revenue (£ million) 1,492.9 1,663.2 -10% -8% Net fees (£ million) 369.1 418.8 -12% -9% Operating profit (£ million) 66.2 76.4 -13% -9% Operating profit conversion ratio 17.9% 18.2% -0.3% pts +0.1% pts Profit before tax (£ million) 67.6 77.9 -13% -9% Basic earnings per share (pence) 37.4 42.4 -12% -8% Proposed final dividend per share (pence) 9.2 11.6 -21% -21% Total dividend (interim and final) per share (pence) 14.3 16.6 -14% -14% Net cash (£ million) (2) 69.7 83.2 -16% -16%   (1) Variance compares the reported results for FY24 against FY23 on a constant currency basis, whereby the prior year foreign exchange rates are applied to current and prior financial year results to remove the impact of exchange rate fluctuations. (2) Net cash represents cash and cash equivalents less borrowings and excluding leases.     Full-Year Highlights ·      Group net fees down 9% YoY (3) , against a strong prior year (FY23: YoY decline of 4% on record performance) and protracted challenging global economic conditions.   o  Net fees across our three largest countries represent 72% of Group: Netherlands down 6%, Germany and USA both down 12%.   o  The Group's Engineering net fees for the full year were largely stable, down 1% against a record prior year performance. Technology and Life Sciences performance reflected the tougher market conditions throughout the year, declining 10% and 17% respectively.  ·      Contract net fees, which represent 84% of Group net fees (FY23: 82%), were down 7% due to the ongoing softness in new business activity, partially offset by continued strong client extensions; a demonstration of our strength in meeting our clients' needs to retain critical STEM skills and flexible talent. ·      Permanent net fees, representing 16% of Group net fees (FY23: 18%), were down 18% reflecting the challenging market conditions. ·      Contractor order book (4) of £161.3 million, down 10% YoY, whilst continuing to represent sector-leading visibility with the equivalent of circa four months' net fees. ·      Resilient profit performance, in line with expectations, with operating profit conversion ratio maintained at 18% and profit before tax of £67.6 million, down 9% YoY on a like-for-like basis due to decline in net fees partially offset by cost savings and higher net interest. ·      Robust balance sheet, with £69.7 million in net cash at year end (FY23: £83.2 million). Post period end, commenced a share buyback programme of up to £20m in light of the Group's strong cash generation and balance sheet. ·      Final dividend proposed of 9.2 pence per share (FY23: 11.6 pence per share), taking full year dividend to 14.3 pence per share (FY23: 16.6 pence per share), down 14% YoY. This is in line with the previously communicated dividend cover target between 2.5x and 3.0x. ·      Technology Improvement Programme (TIP) remains on track with around 80% of our business now successfully onboarded and actively using the platform.   Outlook ·      The challenging economic conditions, impacting new business activity, are expected to persist throughout FY25. ·      The financial implication of these challenges is expected to be partly mitigated by the accelerated realisation of further operational efficiencies. ·      As previously announced, the Board expects FY25 profit before tax to be c.£25 million which includes up to £7m of one-off costs to deliver the additional operational efficiencies. ·      The Board remains confident that the Group's strategic focus on STEM and Contract, the completed rollout of the TIP, alongside the actions being taken, will position the Group for sustained profitable growth when markets recover.   (3)   All YoY growth rates expressed at constant currency. (4) The contractor order book represents value of net fees until contractual end dates, assuming all contractual hours are worked.   Timo Lehne, Chief Executive Officer, commented: "Against a protracted challenging market environment, which has weighed on new business activity, the Group delivered a resilient FY24 performance, testament to the quality of our STEM and Contract focus and supported by careful cost management. As previously reported, whilst Contract extensions remain robust, the Board has taken a prudent view of FY25 given the weak new business environment which is expected to persist through the current year. "Whilst we navigate this extended cycle, we continue to drive material operational enhancements through the Group to position us in line with the structural opportunities arising as a result of clear trends, such as rapid technological change and new ways of working. We continue to believe this future world of work is based on hard-to-find STEM skills, with 63% of employers identifying skills gaps as the biggest barrier to business transformation over the coming years 1 . Our deep experience of identifying niche global talent means we sit at the heart of these global trends, a position which is being further enhanced through the continued roll-out of our TIP programme. We start the new financial year as a stronger organisation, which, combined with a robust business model and energised team, leaves us well placed as we progress on our vision for future success."   1 World Economic Forum, Future of Jobs Report 2025 .     Analyst conference call SThree is hosting a webinar for analysts and investors today at 08:30 to present the Group's results for the financial year ended 30 November 2024. If you would like to register for the webinar, please contact [email protected] . Forward looking dates The Group will present its FY25 Q1 Trading Update o n 18 March 2025.   Enquiries: SThree plc               Timo Lehne, CEO                                                                                                                                    via Alma Andrew Beach, CFO Keren Oser, Investor Relations Director   Alma Strategic Communications                                                                                                           +44 20 3405 0205 Rebecca Sanders-Hewett                                                                                                                       [email protected] Hilary Buchanan Sam Modlin Will Ellis Hancock                                                                                                                                     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 around 6,000 clients across 11 countries. Our Group's c. 2,700 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.   CHair's statement The past year has been another difficult one, as the market backdrop within which the Group has been operating remained challenging. While it has been a tough couple of years for the industry, our people and clients, we have delivered a resilient performance in line with market expectations, supported by our Contract and STEM-focused business model, of which we are proud. The Board and I appreciate the efforts that have been made by our teams around the world to deliver these results. My thanks go to every member of our team as their hard work, dedication and skill have been instrumental in driving the business forward this year. I would also like to express thanks to our shareholders and other stakeholders for their ongoing support during this challenging period as we continue to strive to deliver growth and shareholder value over the mid-to-long term. Our unique strategic focus on STEM skills and flexible talent continues to underpin our overall performance, supported by the global megatrends that are driving demand for workers with these specialist skills. This gives us confidence that we are in the right markets and focusing on the right sectors where we can make a real difference, drive growth and increase market share. In line with the Group's capital allocation policy, the Board is proposing a final dividend at 9.2 pence per share this year. This, combined with the interim dividend of 5.1 pence per share, gives the total dividend for the year of 14.3 pence per share. We remain committed to maximising shareholder value while ensuring effective and pragmatic capital allocation across the Group that allows us to deliver growth in net fees and margin, maintain a healthy balance sheet, invest in our people and technologies and grow through acquisition, should we find the right opportunity to do so. Post-period end we were pleased to announce the launch of a share buyback programme of up to £20 million to reduce the share capital of the Company; we consider this to be in the best interests of the Company and its shareholders, returning surplus capital to shareholders while maintaining the financial flexibility to invest in the Group's strategy. In spite of the challenging market dynamics and political change in some of our key markets, the Group has taken great steps forward towards its long-term growth strategy. While cognisant of the market backdrop, we have remained disciplined in our continued investment in our teams, technology and places of work to ensure we are in the best position possible to seize the opportunity as the market improves. Having had the pleasure of being able to catch up with colleagues in our offices around the world throughout the year, one thing that has clearly shone through is the real sense of pride and community across SThree; something Timo has been instrumental in delivering. April 2025 will mark his third anniversary as Chief Executive Officer of the Group and his clarity of vision and drive are bearing fruit in the form of early signs of benefits from our Technology Improvement Programme, industry recognition and improved staff retention and talent acquisition. The new leadership team established in the US has had a positive impact and we are confident in the people and platform we have in place to seize our clear opportunity in the region as market sentiment improves. The team there has a clear sense of direction and the opportunities for us are large. Similarly, the Executive Committee has been performing very well and is delivering for the Group. The stability and obvious trust between each member of the Committee is filtering across the business and helping drive the Group forward. Our Technology Improvement Programme is hugely exciting and is positioning us at the forefront of the industry with a roadmap to deliver cutting edge, Artificial Intelligence (AI)-enhanced tools to our teams. In what is a major achievement, I am pleased to say that the roll-out continues on track and on budget, with around 80% of our team now successfully onboarded and actively using the platform. As a result of the programme, we are starting to see efficiencies across the business, from Placement Support, Payroll and our internal support teams. These benefits are already having a tangible impact, and we look forward to talking further to them in the future.   Our strategy, focused on STEM and Contract talent, and our underlying performance have seen us earn recognition across the industry. Being named a 'great place to work' in Belgium, Japan and the Netherlands is testament to the culture in our offices around the world. I am delighted that this culture, coupled with our focus on STEM, is also creating opportunities for us in the recruitment market, with an increase in experienced hires being made across the Group. Alongside our people and platform, we have also invested in our offices around the world, including the opening of our new headquarters in London.  We are striving to be seen as an employer of choice in our industry and this investment comes in conjunction with our efforts to boost the time our teams spend with clients, both physically and virtually, compared to recent years as we are committed to remaining close to the market. We remain committed to our pledge to be a responsible and sustainable employer and ESG considerations remain embedded within our strategy. We were proud to be named in the Financial Times' list of Europe's Climate Leaders 2024 and Time Magazine and Statista's World Best Companies for Sustainable Growth, in what we see is a clear indication of our dedication to the environment and a greener economy. We were delighted to welcome Sanjeevan Bala as a Non-Executive Director to the Board in April 2024. His expertise in customer-centric technology and AI transformation has been invaluable and he has made an immediate contribution to the business. In H2 FY24, the Board commissioned an external Board evaluation to benchmark on various levels. I am pleased to report that the results were extremely positive, with the Board's effectiveness, impact and general governance all being highlighted. I would like to thank the whole Board for their hard work and commitment this year and look forward to continuing to build on this in the period ahead. In 2019, we set ourselves some ambitions to strive for by the end of 2024. While we did not anticipate Covid-19 and the subsequent challenging market backdrop of the past two years when setting the ambitions, looking back I believe we have done a good job in executing against them. Looking ahead, whilst FY25 is set to see challenging market conditions persist, I believe there is a lot to be excited about. We are of the view that the recruitment industry will change more in the next five years than it has in the last 20, driven by effective implementation of technology. We have led the industry in harnessing the latest tools available and see this head start as an opportunity for us. This technological advantage, coupled with our strategic focus on STEM and Contract mean we are well placed to grow once the market backdrop improves .     Chief executive officer's statement The strength of the Group's operating model and differentiated STEM value proposition has been demonstrated this year with a resilient financial performance in a prolonged challenging market environment. Despite softer trading conditions, which have persisted longer than market participants predicted, the Group was able to withstand the external pressures of this extended cycle through FY24, delivering a financial result in line with expectations. Notwithstanding the trading environment, we have taken the time to strengthen our position for future growth, making meaningful progress in line with our technology and operational enhancement plans. Our unique business model is rooted in our conviction that the future of work is flexible STEM talent. The Group has grown from a heritage of doing things differently and embracing opportunities arising from a changing world. As industries evolve and shifts in labour markets unfold, driven by the forces of global megatrends, we have acted early and decisively to position our business at the centre. It is this pioneering ethos that continues to govern our evolution today. We proactively took the important step over two years ago to initiate a journey to become a digitally-enabled business through our Technology Improvement Programme (TIP), setting us on a path to be a fitter, more scalable organisation. Contract and STEM provided resilience in uncertain markets This year we have connected over 12,150 highly skilled STEM professionals to their next career role, which we facilitate through our unique combination of niche vertical focus and operational scale. As a STEM partner to our customers in diverse markets and sectors, we uncover the scarce, highly skilled STEM specialists needed to power their businesses. We deliver this through an adaptable suite of solutions, whether that be Independent Contractors, Employed Contractors or Permanent placements, coupled with a best-in-class consultative service wrapper. Our strategic focus on flexible talent (representing contract, part-time specialists and project-based teams) now contributes 84% to Group net fees, and is aligned to the needs of our clients and preferences of our candidate communities. As widely reported across regions and industries, the market backdrop over the year has been characterised by economic weakness coupled with geopolitical uncertainty, with a notable impact on client confidence. With the protracted length of this uncertainty, we believe this has contributed to a rise in status quo bias on the part of decision-makers, exacerbating an ingrained preference for stability and inhibiting investment decisions which could otherwise be beneficial in the longer-run. 1 This heightened, broad resistance to change is resulting in delayed decision-making in the short-term.  The result of this can be seen in softer new placement activity as clients put on hold investment initiatives, particularly acute in permanent roles. This has resulted in net fees for the year of £369.1 million, down 9% YoY on a like-for-like basis, which, together with prudent cost control, delivered an operating profit of £66.2 million. Our bias toward flexible talent underpinned our resilience in the year, providing a visible runway of monthly-recognised Contract net fees in the form on a contractor order book. Whilst Contract extensions continued to be robust through the year, reflecting the desire of our customers to retain key STEM skills, persistently weak new business activity meant that new business did not outpace the rate of Contract finishers, resulting in the contractor order book declining 10% YoY. Despite this, our Contract focus continues to provide sector-leading net fee visibility of £161.3 million, equivalent to around four months of net fees. Embracing change and aligning to structural opportunity The unprecedented speed of adoption of new technology is taking hold across industries and we are starting to see this shaping business leaders' views of the skillsets they need. The reported productivity gains and growth potential enabled through Artificial Intelligence (AI) adoption is in turn changing the skills sought by employers. 2 As we have reported in our own research ( How the STEM World Works ), AI is no longer the spectre that threatens job security; it is the catalyst for unprecedented growth. Crucially, it has been shown that AI is often performing best in collaboration with people, and that " the biggest performance improvements come when humans and smart machines work together ." 3 We believe this to be particularly acute in highly complex roles, a view which is supported by industry experts 4 . It is these specialist markets where we focus, and which require experts to find and place. We believe we are at the centre of this evolving landscape, both in terms of what we deliver to clients, but also our own operations. To our clients, as well as candidates, we provide advice and guidance. Not only are we helping our clients to leverage the benefits of modern technology by finding the skills they need in order to do so, but we are also embracing it ourselves in ways that make work more fulfilling and impactful for our teams. We are on our own journey of creating a bespoke insights and data platform that will deliver exceptional value to our customers, candidates, employees and shareholders. Working for our communities and the planet Notwithstanding transient economic cycles, we remain resolute in our focus on executing our ESG commitments. In doing so, we are ensuring we are building a business that works for our communities and the planet, a central component to our sustainable growth ambitions and long-term resilience. Our commitment to the environment is two-fold: as a Group, we are actively transitioning to be a net zero business before 2050 in line with SBTi verified targets, and this year our net zero working group has been working on a five-year transition roadmap (FY25-FY30) to ensure we remain on track. Secondly, our role extends much broader than our own business footprint - the STEM skills we place play a critical role in enabling the transition to a net zero world, and in FY24, we delivered 923 placements within clean energy. Since FY19 we have seen 161% growth in our clean energy business net fees. Clean energy, which now accounts for 11% of Group net fees, remains an exciting growth opportunity for SThree. In 2019 we set our 2024 sustainable business practice and ESG ambitions (refreshed in FY22). The following provides an overview of our in-year performance and progress towards our overall goals: ·      During FY24, our clean energy business grew by 5% compared to FY23 (FY23: up 28% versus FY22). We have achieved our target of doubling the size of our global clean energy business from FY19 to FY24. ·      In FY24, we achieved a 21% reduction in carbon emissions compared to FY19, our baseline year for our SBTi net zero target. Our goal was to reduce absolute carbon emissions by 25% from FY19 levels. We surpassed this target in FY22 with a 44% reduction, but fell slightly short in FY24. ·      Throughout FY24, we positively impacted over 48,500 lives (FY23: over 25,700). Since FY19, we have positively impacted 163,028 lives and successfully met our ambition of impacting more than 150,000 lives by the end of 2024. ·      As of FY24, 37% of leadership positions are held by women (FY23: 39%) as we progress towards our short-term goal of 40% of women in leadership roles, with the longer-term ambition of achieving 50/50 representation. We also recognise our responsibility in helping to shape an equitable and diverse STEM talent pipeline. As such, in FY24 our Elevate Careers programme delivered career advice, CV reviews, and sharing our intellectual capital to help 1,739 people at risk of unemployment to access career paths. Internally, we continue to invest in our diversity and in FY24 we welcomed 39 women to be our fourth leadership accelerator cohort. Strategic execution Places: To be a leader in the markets we choose to serve A key component of our growth ambition is ensuring our market coverage remains aligned to the best STEM markets and skills verticals through continuous evaluation under our market investment model. During the year, we remained focused on our active market coverage of 11 countries, giving us access to approximately 71% of the global STEM staffing opportunity, and which we service from our footprint of 33 offices. This deliberate and targeted coverage follows a streamlining of our markets in preceding years, and as a result, this simplified structure has enabled us to channel all of our efforts during FY24 on strengthening our operations in each of our core markets for long-term success. For example, in the US we have invested in refining our go-to-market strategies to ensure our teams are better positioned to capitalise on growth opportunities there, with a focus on having a more balanced portfolio in each of our core markets, particularly given that we expect the region to rebound faster than other markets.  More broadly, other areas of focus in the year have been investing in our technology and capacity to embed data-driven insights throughout our operations, both to enhance the services we provide to clients and to also inform our pricing and skill vertical investments in each market. We have also evolved our global client approach to emphasise greater client collaboration and service. Lastly, we have brought our global Permanent community together to strengthen our Permanent offering in preparation for recovery in the market. These initiatives leave us with stronger foundations to grow both organically and through selected M&A, positioning us well to capitalise when markets recover. Platform: Create a world-class operational platform through data, technology and infrastructure This year has marked a considerable step-change in our transition to a digitally-enabled organisation, with the TIP roll-out now initiated across four of our five largest global markets. Importantly, we have taken the learnings from our first major roll-out in the US, and applied it to our subsequent implementations initiated in FY24 in Germany, UK and the Netherlands, helping us to be more efficient in our deployment. This has enabled us to introduce, for the first time, back-office process automation, with the early efficiency benefits highlighting the scale of the potential we can unlock. We now have five AI-enabled processes across placement support, payroll and IT help desks live and working in our four initiated markets, with another five processes to be onboarded in FY25. Taking a look at the US as our first major region to go live, over a 12-month period we have reduced the manual intervention on c.4,400 new placement onboardings or extension updates; removed the need for the manual management and approval of c.43,000 timesheets; and decreased the number of tickets created by the IT help desk by 28%.  In addition, the implications of our global system roll-out is starting to resonate much more broadly. This year we have designed the automation of sales processes and begun digitising the 'SThree Way' best practice blueprint to support sales effectiveness of our consultants. In doing so, we have made a concerted effort in ensuring that our technology roll-out is inextricably delivered together with change management initiatives across our teams, through focus groups, leadership days and training. Already we can see that our new, standardised and accessible systems are tying the whole organisation closer together, helping to bring greater alignment around our strategy. We are becoming better at utilising the power of the Group through knowledge sharing and transporting client relationships across regions, helping to open up new opportunities and build deeper relationships with our clients.  As we enter the new year, we will be completing the rollout out of TIP globally, and introducing new functions onto the platform. As we look ahead to our mid-to-long term opportunity, this is only the start of our journey. The more we do, the more that it is clear that the benefits of TIP will continue to expand, with its global implementation providing the foundational infrastructure for continued enhancement, development and innovation in the years to come. We believe this will position us as game-changers in the industry, driving high margin growth over the medium term. Position: Leverage our position at the centre of STEM to deliver sustainable value to our candidates and clients Our go-to market strategy is rooted in our 'house of brands' approach, with a focus on leveraging the strong brand value we have in our specialist vertical markets across the full Group. Through a more unified brand portfolio we are working to tie our brands closer together to elevate the collective power of the Group and enhance our position within our markets and skills verticals. We are already seeing evidence that our proposition as a STEM partner is gaining increased momentum with larger enterprise clients, evidenced by 8% YoY net fee growth within our top client cohort. We see a large opportunity within this customer segment, and we have new initiatives planned for launch in FY25 to build on this momentum further.  To support our efforts, we launched the latest of our thought leadership initiatives in H2 FY24 with our global STEM survey report, ' How the STEM world works: Navigating the new era of AI and trust '. The report is the culmination of an in-depth survey of over 2,500 STEM professionals worldwide, spanning Technology, Engineering and Life Sciences. The report provides insight for our clients looking to create the right environment and workforce to embrace AI and digital transformation to drive productivity and innovation. Findings such as the fact STEM professionals are losing nearly six hours each week due to insufficient AI support, and the prevalence of digital illiteracy in leadership are just some findings that help our clients make the right workforce decisions. People: Attract, develop and retain great people Our longstanding relationships and best-in-class consultative service wrapper are made possible by our dedicated global team of c.2,700 people. Our performance culture is guided by an ethos that everyone plays a part in our journey, and I would like to take the opportunity to thank all SThree team members for their continued commitment and determination in delivering outstanding value to our clients and candidates. A highlight of my role continues to be interacting with our teams on the ground across our global markets, and I was particularly inspired following our two-day leadership conference in London where our teams and customers came together to share views on the future of work. We were able to give additional insight on our technology improvement plans and the progress we have made in enhancing service delivery through standardisation of the 'SThree Way'. During the year we have seen early positive impact from enhanced processes to improve employee retention, including a reduction in sales consultant churn this year. Specific initiatives in the period include the launch of a Global Benefits Network and Reward Governance Group, and the introduction of refined global hybrid working policies. In addition, we have dedicated considerable effort through our change programme, with a focus on upskilling, ensuring that our teams have been prepared for the demands of a new system as we progressed the global roll-out of our new technology infrastructure. In addition, there have been big investments in leadership development and we successfully activated and embedded our new company values. Looking into FY25, we will be implementing new initiatives with the key objective to impact our retention and productivity of our 0-24 months sales population. With this programme we aim to develop our SThree Way of managing sales by ensuring we develop globally consistent best practices for hiring, onboarding and performance managing sales talent across all regions. Outlook: bringing skilled people together to build the future As previously indicated, market conditions continue to be challenging particularly in Europe, and we prudently expect this to persist through FY25. Whilst the wider landscape remains in a state of status quo bias in the short term, we would expect this to transition to tailwinds over the medium term as businesses resume investment to avoid stagnation and pent-up investment demand is unleashed. Importantly, we are not shaping our thinking and decision making around this cycle. We maintain our forward-looking view, focusing on the right markets, with the right people and the right strategy over the mid-to-long term. We are using this time to move further ahead in our positioning, investing in our future, supported by a resilient business model and robust cash position. We believe the actions we are taking are providing us with competitive, first-mover advantage and we will emerge fitter and ready to capitalise when markets recover. Our scale, robust business foundations and deep STEM networks fostered over decades, combined with a plan to drive the benefit realisation of our infrastructure investment, sets us on a path to be game changers in STEM.   1   https://online.wharton.upenn.edu/blog/status-quo-bias/ 2  https://www.pwc.com/gx/en/news-room/press-releases/2024/pwc-2024-global-ai-jobs-barometer.html 3 https://hbr.org/2018/07/collaborative-intelligence-humans-and-ai-are-joining-forces 4 https://www.peoplemanagement.co.uk/article/1895039/michael-wooldridge-ai-doesnt-depth-replace-complex-roles   Group financial and OPERATIONAL REVIEW Overview Our strategic focus on Contract underpinned the Group's performance against a prolonged challenging backdrop for the sector, where conditions have had an ongoing impact on new business activity throughout the year; overall, the Group net fees declined 9% YoY on a like-for-like basis.  Our Contract business, which represents 84% of Group, saw net fees decline by 7% YoY on a like-for-like basis. The contractor order book closed at £161.3 million, down 10% YoY, but continues to provide sector-leading visibility into FY25 . Permanent net fees were down 18% reflecting both global market conditions together with our targeted investment towards Contract. Average permanent headcount was down 7% YoY. From a skill perspective, the Group saw continued demand for Engineering roles, down only 1% YoY, driven primarily by the Energy sector, with the clean energy (renewables) segment still in growth (up 5% YoY), while net fees for placements into Technology roles, our largest discipline, were down 10% YoY and Life Sciences declined 17% YoY primarily driven by the global market conditions in the sector, though still broadly in-line with pre-Covid levels. Overall, the Group reported operating profit was £66.2 million (FY23: £76.4 million), down 9% YoY on a like-for-like basis, driven primarily by the decline in net fees across key markets, the impact of additional licensing costs as the Technology Improvement Programme (TIP) continued to roll out in FY24, offset by prudent management of discretionary costs . The operating profit conversion ratio for the year remained stable at 18%. Productivity for the year was down only 4% against the prior year, as the rate of net fee decline was higher than average headcount decline of 6%, reflecting careful management of our business whilst ensuring we are ready to respond when the market improves. Update against 2024 ambitions At our Capital Markets Day in FY19 (refreshed in FY22), we announced our 2024 ambitions, which have guided our actions and strategic initiatives in our journey to become the number one STEM talent provider in the best global STEM markets: ·      Grow market share/grow net fees faster than our peer group across the aggregate of our top five markets compared to FY19 . Based on the market data available to us as at the end of Q3 FY24, we have outperformed our local peer group on a net fee basis versus FY19. ·      Deliver a sustainable operating profit conversion ratio in excess of 21%. The current macro-economic headwinds have negatively impacted net fees and dampened the overall margin progression, however the Group has continued to invest in its people and platform. While 21% could have been achieved, we have prioritised investing in our longer-term ambitions while still maintaining a sector-leading conversion ratio of 18% in FY24 despite the difficult market conditions.  ·      Our aim was to target eNPS scores in the top quartile of the professional services industry. Over the course of the year, we ran two full surveys and our average Group-wide eNPS score was 40 points 1 , which is within the top quartile. Survey findings highlighted SThree's strengths in setting performance goals, giving feedback, and performance recognition. Sentiment was influenced in part by the ongoing TIP roll-out. Large-scale transformations often impact eNPS short-term, and the implementation of our TIP is a big change for our people as it takes time to get acquainted with a completely new end-to-end system. Despite this, we are seeing a great commitment from our teams, reflected in above-benchmark eNPS scores for TIP-related questions, demonstrating their understanding and support for the transformation. ·      We aimed to reduce absolute carbon emissions by 25% compared to FY19 levels (the base year). This target was surpassed in FY22 with a 44% reduction. However, in FY24, we fell slightly short of the target, achieving a reduction of 21% compared to FY19.   1 FY24 average eNPS score based on H1 eNPS of 45 (top quartile 40), and H2 eNPS of 35 (top quartile 36).     Group net fees by geography, skills and service   Group net fees % of Group                 FY24 (£'000) FY23 (£'000) Variance Reported Like-for-like (1) Geographical mix DACH 35% 127,546 148,925 -14% -12% USA 22% 82,034 96,410 -15% -12% Netherlands including Spain 21% 78,532 82,149 -4% -2% Rest of the Europe 17% 61,314 70,439 -13% -12% Middle East & Asia 5% 19,653 20,852 -6% +4% Total 100% 369,079 418,775 -12% -9% Skills mix Technology 48% 177,694 202,510 -12% -10% Engineering 29% 105,330 108,820 -3% -1% Life Sciences 17% 60,926 75,516 -19% -17% Other 7% 25,129 31,929 -21% -18% Total 100% 369,079 418,775 -12% -9% Service mix Contract 84% 310,617 343,502 -10% -7% Permanent 16% 58,462 75,273 -22% -18% Total 100% 369,079 418,775 -12% -9% (1) Like-for-like YoY growth rates are expressed in constant currency.   Business mix T he Group is well diversified, both geographically and by the skills we place across multiple sectors . Our t op three countries represent 72% of Group net fees, with Germany accounting for 30%, USA 22% and the Netherlands 19%. Our Contract business declined by 7% on a like-for-like basis against a record prior year performance and now represents 84% of the Group net fees. Our Permanent business, which now represents 16% of the Group net fees, saw net fees decline 18% in the year on a like-for-like basis, with average Permanent headcount down 7 % YoY. Our market invest model enables us to continually review our markets to prioritise investments where we see opportunities for growth and the strongest returns. Engineering, which represents 29% of the Group net fees, declined by 1%, with the resilient performance against a record prior year driven primarily by the Energy sector. Clean energy business (renewables) remains the fastest growing segment, up 5% YoY. This was offset by the decline in Technology of 10% YoY, and in Life Sciences of 17% YoY due to reduced global sector expenditure. Technology and Life Sciences now represent 48% and 17% of the Group net fees respectively.   Operational review by reporting segment DACH (35% of Group net fees)     FY24 FY23 Variance Performance highlights Reported Like-for-like Revenue (£'000) 456,051 524,732 -13% -11% Net fees (£'000) 127,546 148,925 -14% -12% Average total headcount (FTE) 811 877 -8% n/a   ·      DACH is our largest region comprising businesses in Austria, Germany and Switzerland, with Germany accounting for 88% of net fees. N et fees declined by 12% YoY, with Contract down 6% and Permanent down 28%. ·      Germany, our largest country in the region (88% of DACH net fees), saw Contract down 6%, with overall net fees down 12%, predominantly reflecting lower levels of demand for Technology skills (down 13%). In addition, new business activity and trading in Germany were affected by the fragile state of the German coalition government in Q4 FY24. ·      Switzerland saw net fees decline 7% YoY driven by Life Sciences down 26%, though we did see strong growth in Engineering, up 42% YoY. ·      Austria net fees declined 18% YoY.     USA (22% of Group net fees)     FY24 FY23 Variance Performance highlights Reported Like-for-like Revenue (£'000) 299,229 328,293 -9% -6% Net fees (£'000) 82,034 96,410 -15% -12% Average total headcount (FTE) 411  473 -13% n/a   ·      The USA is the world's largest specialist STEM staffing market and our second-largest region on a net fee basis. It remains a key area of focus for the Group, and we will continue to invest in the region as we align our resources with the best long-term opportunities. ·      USA saw net fees decline 12% YoY with trading partly reflecting uncertainty throughout the year relating to the US election at the end of Q4. At the skill level, the decline was led by Life Sciences where an abundance of roles during the pandemic has led to a subsequent decline in demand. Engineering delivered a solid performance with 5% growth YoY driven by both Contract and Permanent. ·      Contract net fees, which now account for 90% of the region's net fees, were down 11%, impacted by declines in Life Sciences and Technology. ·      Permanent net fees declined 24% YoY, due to poor performance in Life Sciences.     Netherlands including Spain (21% of Group net fees)     FY24 FY23 Variance Performance highlights Reported Like-for-like Revenue (£'000) 343,571 367,643 -7% -4% Net fees (£'000) 78,532 82,149 -4% -2% Average total headcount (FTE) 411 422 -3% n/a   ·      The region saw net fees decline by 2% YoY, with Contract down 2% and Permanent down 5%. ·      The Netherlands, our largest country in the region (90% of net fees), delivered a resilient performance despite an ongoing challenging macro environment resulting in a drop in new hiring demand. Overall net fees generated in the Netherlands were down 6%, with Contract down 6% and Permanent down 5%. ·      From a sector perspective, Technology in the region was flat, Engineering was down 4% and Life Sciences was down 5%. ·      Spain had another impressive year, with net fee growth of 52% driven primarily by Technology.     Rest of the Europe (17% of Group net fees)     FY24 FY23 Variance Performance highlights Reported Like-for-like Revenue (£'000) 353,150 399,862 -12% -11% Net fees (£'000) 61,314 70,439 -13% -12% Average total headcount (FTE) (9) 441 499 -12% n/a (9) Excludes central headcount located in the UK.   ·      Rest of Europe comprises businesses in the UK, Belgium and France, where given the persistent market uncertainty, business confidence remained subdued causing many large projects to be put on hold. ·      Net fees saw a decline of 12% YoY.  Contract, which represents 97% of net fees for the region, declined 11%, with Permanent declining 41%, driven by both market conditions and the transition towards Contract. ·      The UK, our largest country in the region (64% of net fees), saw net fees decline 14%, with growth in Engineering, up 4% YoY, outweighed by declines in Life Sciences, down 22%, and Technology, down 10%. ·      France and Belgium traded broadly in line with the prior year, with net fees flat and down 1% respectively.     Middle East & Asia (5% of Group net fees)   FY24 FY23 Variance Performance highlights Reported Like-for-like Revenue (£'000) 40,905 42,637 -4% +3% Net fees (£'000) 19,653 20,852 -6% +4% Average total headcount (FTE) 202 185 +9% n/a   ·      Our Middle East & Asia business includes Japan and UAE, and accounts for 5% of Group net fees. ·      Overall, FY24 was a good year with stable, consistent growth for the region, net fees increased by 4% YoY. On Permanent we saw our net fees grow by 14% YoY. ·      Japan, which represents 54% of the region's net fees, delivered an impressive performance up 26% YoY, reflecting growth in both Engineering and Technology, up 68% and 16% respectively. Japan's Contract net fees were up 117% and Permanent up 20%. ·      UAE saw net fees decline 11% YoY driven by Engineering.     chief financial officer's STATEMENT  In FY24, the Group was impacted by increased political and macro-economic uncertainty, particularly in Europe, further delaying businesses' investment plans and the anticipated easing of market conditions. The Group's net fees performance, down 9% YoY on a like-for-like basis, was therefore significantly impacted by the continued weak new business activity, partially offset by robust contract extensions. Income statement On a reported basis revenue for the year was down 10% [1] and amounted to £1.5 billion (FY23: £1.7 billion) while net fees declined by 12% to £369.1 million (FY23 £418.8 million). The weakening of our two main trading currencies, the US Dollar and the Euro, against Sterling during the year, decreased the total net fees by £9.5 million. Therefore, when presented on a constant currency basis, the net fees decreased by 9% YoY. Net fees in our Contract business, which represented 84% of the Group net fees for the current year (FY23: 84%), declined by 7%, driven by the ongoing softness in new business but partially offset by continued strong contract extensions. Across our core regions, Netherlands (including Spain) saw a decline of 2% in Contract net fee income, driven by Engineering, down 3% YoY. In the US, Contract net fees, which now account for over 90% of the region total net fees, were down 11% YoY primarily due to its exposure to Life Sciences , while DACH was down 6%, reflecting softer demand for Technology skills . Rest of Europe's Contract performance was down 11% YoY . Middle East & Asia was down 15 %. Skills-wise, Engineering was flat YoY, with Life Sciences down 16% and Technology down 7%, reflecting global market conditions. The Group Contract net fee margin, calculated as Contract net fees as a percentage of Contract revenue [2] remained flat YoY at 21.7% (FY23: 21.7%). The contractor order boo k closed at £161.3 million, down 10% YoY, and accounts for approximately four months' worth of net fees, providing us with good forward visibility into FY25. Under the contractor model, net fees are earned on a month-by-month basis, with the contractor order book reflecting the value of net fees under contract but yet to be recognised. During softer market conditions, this provides resilience with visibility over the recurring-like nature of monthly contract fees as contracts run their course (contract 'finishers'). In a market recovery context, the Board would expect the contractor order book to gradually increase as and when new placements outpace finishers over a sustained period through the year. Permanent net fee income was do wn 18% reflecting market conditions across most regions, together with our targeted investment towards Contract. Our largest Permanent region, DACH, reported a decline of 28%. Rest of Europe was also down 41% , and USA d own 24 %. Netherlands (including Spain) declined 5% YoY. Meanwhile our second largest Permanent region, Middle East & Asia, delivered a strong performance with growth of 14 %. Permanent average fees increased by 9% YoY in the year, with average permanent fee margin ( net fees as a percentage of salary) now at 27.2% (FY23: 27.1%). Operating expenses decreased by 12% YoY on a reported basis, amounting to £302.9 million (FY23: £342.4 million) due to careful management of costs. Overall, t he reported operating profit was £66.2 million (FY23: £76.4 million), down 9% YoY in constant currency, while the Group operating profit conversion ratio 2 remained stable at 17.9% (FY23: 18.2%). Operating profit conversion ratio reflects the decline in net fees across key markets, as well as the impact of additional licensing costs as the Technology Improvement Programme continued to roll out this year, offset by prudent management of discretionary costs. The net currency movements versus Sterling were unfavourable to the operating profit, reducing it by £3.0 million. Fluctuations in foreign currency exchange rates are expected to remain a material sensitivity to the Group's reported results. By way of illustration, each 1% movement in annual exchange rates of the Euro and US Dollar against Sterling impacts the Group's operating profit by £0.8 million and £0.3 million respectively per annum. Net finance income The Group received net finance income of £1.4 million (FY23: £1.6 million) which included interest income of £2.9 million (FY23: £2.2 million), earned on the Group's bank deposits, partially offset by the interest charge on lease liabilities, £1.4 million (FY23: £0.6 million). Income tax The total tax charge for the year on the Group's profit before tax was £19.9 million (FY23: £21.9 million), representing a full-year effective tax rate (ETR) of 26.5% (FY23: 28.1%). The YoY decrease in the Group's ETR is primarily driven by the release of an uncertain tax provision following settlement of the state aid case heard at the European Court of Justice. The Group ETR can also vary YoY due to the mix of taxable profits by territory, non-deductibility of the accounting charge for LTIPs and other one-off tax items.   Overall, the reported profit before tax was £67.6 million, down 9% YoY in constant currency and down 13% on a reported basis (FY23: £77.9 million). The reported profit after tax was £49.7 million, down 7% YoY in constant currency and down 11% on a reported basis (FY23: £56.1 million).   Earnings per share (EPS) The EPS was 37.4 pence (FY23: 42.4 pence). The YoY movement is attributable to the overall resilient trading performance, combined with lower average headcount, tight cost control and net interest income, partially offset by an increase of 0.7 million in the weighted average number of shares. The diluted EPS was 37.1 pence (FY23: 41.5 pence). Share dilution mainly results from various share options in place and expected future settlement of vested tracker shares. The dilutive effect on EPS from tracker shares will vary in future periods, depending on the profitability of the underlying tracker businesses and the settlement of vested arrangements.   Dividends The Board monitors the appropriate level of dividend, considering achieved and expected trading of the Group, together with its balance sheet position. The Board aims to offer shareholders long-term ordinary dividend growth within a targeted dividend cover 2 range of 2.5x to 3.0x through the cycle. The Board has proposed to pay a final dividend of 9.2 pence (FY23: 11.6 pence) per share, which together with the interim dividend of 5.1 pence (FY23: 5.0 pence) per share, will give the total dividend of 14.3 pence (FY23: 16.6 pence) per share for FY24. The final dividend, which amounts to approximately £12.2 million, will be subject to shareholder approval at the 2025 Annual General Meeting. It will be paid on 6 June 2025 to shareholders on the register on 9 May 2025.   Balance sheet Total Group net assets increased to £248.6 million (FY23: £222.9 million), driven by the excess of net profit over the dividend payments and £5.1 million increase in intangible assets attributable to development costs capitalised under the TIP, partially offset by cost of shares purchased by the Employee Benefit Trust (EBT). Net working capital, including contract assets, increased by £21.7 million on the prior year, driven mainly by increased days sales outstanding (DSO) partially offset by the slowdown in trading, including reduced contractor order book. The year-end net cash position of £69.7 million was robust; the YoY decline reflected the timing of certain client payments related to a small number of clients. As we roll out TIP in each new market, there is a short-term impact as clients get used to a new billing process. It has created a little volatility as we roll out each market, but what we see is that it returns towards more normalised levels over a period of months. In FY24, this resulted in a temporary increase in DSO to 55 days (FY23: 46 days), but we expect to continue to return to a more normalised cash flow profile over the coming months. Overall, our business model remains highly cash generative, and we have no undue concentration of repayment obligations in respect of trade payables or borrowings. Investments in subsidiaries During the year, the Directors reviewed the recoverable amount of the Company's own portfolio of investments. Due to the prolonged challenging market conditions, in December 2024 the Group announced a downgrade to the forecast trading outlook for the Group. As a result, an impairment loss of £46.5 million was recognised in respect of the UK operations. In FY24, both Permanent and Contract divisions across all sectors experienced reduced margins impacting the profitability of the UK region. After booking this impairment, the Company's distributable retained earnings were £44.4 million (FY23: £118.4 million). For all the other Company's investments in trading subsidiaries, despite the latest trading forecasts having been revised downwards compared to expectations, their impact was absorbed by significant headroom in the recoverable amounts which had accumulated in prior years. The recoverable amounts of the Company's investments in non-UK subsidiaries provided sufficient headroom to not trigger impairment. In the prior year, an impairment loss of £0.1 million was recognised by the Company in relation to two discontinued businesses, Luxembourg and Canada. Tracker shares In FY24, the Group settled certain vested tracker shares for a total consideration of £4.8 million (FY23: £4.5 million) which was determined using a formula set out in the Articles of Association underpinning the tracker share businesses. The consideration was settled in SThree plc shares; 508,396 (FY23: 320,457) new shares were issued and 776,000 (FY23: 928,483) of shares held by the EBT were utilised. The arrangement is deemed to be an equity-settled share-based payment arrangement under IFRS 2 Share-based payments . There was no charge to the income statement as initially the tracker shareholders subscribed to the tracker shares at their fair value. All current tracker share businesses remaining in existence will continue to be reviewed for settlement based on the pre-agreed criteria each year, until the full closure of the scheme in the next few years. As at the year end, the valuation of the outstanding shareholdings was approximately £2.1 million. These settlements may either dilute the earnings of SThree plc's existing ordinary shareholders if funded by a new issue of shares or result in a cash outflow if funded via treasury shares or shares held in the EBT.   Liquidity management In FY24, cash generated from operations was £59.8 million (FY23: restated £86.9 million, see note 1 to the consolidated financial statements for details). The decrease was primarily driven by lower profit before tax and a significant increase in working capital as the rate of new placement activity slowed, partially offset by robust Contract extensions. Income tax paid increased to £23.0 million (FY23: £19.5 million). Capital expenditure increased to £13.2 million (FY23: £8.2 million), due to the Group-wide TIP and related IT hardware costs. The capital expenditure also included costs of leasehold improvements and fitting out certain parts of our office portfolio. The Group paid £14.4 million in rent (principal and interest portion) (FY23: £14.9 million). The Group spent £10.0 million (FY23: £10.0 million) for the purchase of its own shares to satisfy employee share incentive schemes. Cash inflows of £0.5 million (FY23: £0.3 million) were generated from Save-As-You-Earn employee scheme. Dividend payments were £15.9 million comprising primarily the final dividend paid in June 2024. This is significantly lower as compared to FY23, when in total £21.0 million in funds were transferred to the share administrator for settlement of the FY23 interim dividend and the FY22 final dividend. £21.0 million in funds transferred for the settlement of dividends in FY23 is a restated amount, reduced by £6.4 million. During the year, the Directors identified a presentation error of the FY22 interim dividend in the FY23 Consolidated Statement of Cash Flows. £6.4 million worth of funds, required for the settlement of the FY22 interim dividend, were transferred to a share administrator before 30 November 2022; this was recorded as a dividend prepayment within trade and other receivables and as an operating cash outflow in FY22. Subsequently, it was determined that £6.4 million accounted for as a dividend prepayment and operating cash outflow in FY22 should have been presented within financing activities in the FY22 Consolidated Statement of Cash Flows, in a separate line item 'Prepayment of dividend', to reflect appropriately the nature of this cash outflow. Accordingly, this £6.4 million would not have impacted the FY23 Consolidated Statement of Cash Flows. For further information, please see note 1 to the Consolidated Financial Statements. Foreign exchange had a negative impact of only £0.1 million (FY23: positive impact £2.1 million). Overall, the net cash has declined to £69.7 million in FY24 versus the prior year balance of £83.2 million, driven primarily by reduced EBITDA and increased investments in technology. Accessible funding The Group's capital allocation priorities are financed mainly by retained earnings, cash generated from operations, and a £50.0 million RCF. This has remained undrawn during the year, but any funds borrowed under the RCF would bear a minimum annual interest rate of 1.2% above the benchmark Sterling Overnight Index Average. The Group also maintains a £30.0 million accordion facility as well as a substantial working capital position reflecting net cash due to SThree for placements already undertaken. At the end of the current financial year, the Group had not drawn down any of the credit facilities (FY23: £nil). On 30 November 2024, the Group had total accessible liquidity of £124.7 million, made up of £69.7 million in net cash (FY23: £83.2 million), the £50.0 million RCF and a £5.0 million overdraft facility (of which only £0.1 million was drawn at the year end). Capital allocation SThree remains disciplined in its approach to allocating capital, with the core objective at all times being to maximise shareholder value. The Group's capital allocation policy is reviewed periodically by the Board and was refreshed at the start of FY24: ·      Balance sheet - our intention is to maintain a strong balance sheet at all times to provide operational flexibility throughout the business cycle. ·      Dividend - we aim to pay a sustainable dividend, with a commitment to a through-the-cycle dividend cover range of 2.5x to 3.0x of EPS. ·      Deployment of capital prioritised in the order of: 1.     Organic growth: investing in our people and ensuring sufficient working capital on hand to fund growth in the contractor order book while developing new business opportunities. 2.     Business improvement: digitalising our business, putting in place the technology and tools that are key to driving both scale and higher margins. 3.     Acquisitions: strict inorganic growth discipline, with a focus on complementary and value enhancing acquisitions. 4.     Capital return to shareholders: after all organic and inorganic opportunities within an appropriate time horizon have been assessed, further cash returns to shareholders may be considered.   PRINCIPAL AND EMERGING RISKS Principal risks and uncertainties affecting the business activities of the Group will be detailed within the Strategic Report section of the Group's 2024 Annual Report and Accounts, a copy of which will be available on the Group's website www.sthree.com . Delivering on our strategy requires all parts of our business to work together. In isolation risk mitigation helps SThree manage specific subjects and areas of the business. However, when brought into our day-to-day activities, successful risk management has helped us to maximise our competitive advantage and deliver on our strategic pillars in FY24. While the ultimate responsibility for risk management rests with the Board, the effective day-to-day management of risk is in the way we do business and our culture. Aligning risks and strategy by using risk to help make the right strategic decisions - in order to deliver our strategy and competitive advantage throughout the business we must ensure that we maintain a balance between safeguarding against potential risks and taking advantage of all potential opportunities.     consolidated income statement for the year ended 30 November 2024 £'000 Note 2024 2023   Revenue 2 1,492,906 1,663,167 Cost of sales 2 (1,123,827) (1,244,392) Net fees 2 369,079 418,775 Administrative expenses 3 (301,972) (336,076) Impairment losses on financial assets   (913) (6,343) Operating profit   66,194 76,366 Finance income   2,891 2,257 Finance costs   (1,445) (698) Profit before income tax   67,640 77,915 Income tax expense 4 (17,948) (21,864)   Profit for the year attributable to the owners of the Company   49,692 56,051 Earnings per share attributable to shareholders pence   Basic 5 37.4 42.4 Diluted 5 37.1 41.5     consolidated statement of comprehensive income for the year ended 30 November 2024     £'000  2024 2023 Profit for the year 49,692 56,051 Other comprehensi ve loss: Items that may be subsequently reclassified to income statement Exchange differences on retranslation of foreign operations (4,304)           (1,437) Other comprehensive loss for the year (net of tax) (4,304)         (1,437) Total comprehensive income for the year attributable to owners of the Company 45,388           54,614   The accompanying notes form an integral part of these Consolidated Financial Statements. consolidated statement of financial position   as at 30 November 2024         30 November 30 November £'000 Note 2024 2023 ASSETS   Non-current assets   Property, plant and equipment 46,217 31,116 Intangible assets 6 12,122 7,066 Deferred tax assets 3,408 5,799 Total non-current assets 61,747 43,981 Current assets   Trade and other receivables 364,907 345,120 Current tax assets 10,315 - Cash and cash equivalents 7 69,756 83,202 Total current assets   444,978           428,322   Total assets     506,725 472,303     EQUITY AND LIABILITIES     Equity attributable to owners of the Company     Share capital 8 1,356 1,349 Share premium 8 42,098 39,700 Other reserves   (7,195) (3,597) Retained earnings   212,385 185,432 Total equity     248,644 222,884     Current liabilities     Bank overdraft 7 88 - Trade and other payables   198,223 200,132 Lease liabilities 9, 10 10,419 11,297 Provisions   4,068 7,373 Current tax liabilities     12,275 10,746 Total current liabilities   225,073 229,548       Non-current liabilities     Lease liabilities   9, 10   29,362 17,720 Provisions       2,784 2,151 Deferred tax liabilities   862 - Total non-current liabilities   33,008 19,871 Total liabilities   258,081 249,419   Total equity and liabilities   506,725 472,303     The accompanying notes form an integral part of these Consolidated Financial Statements.     consolidated statement of changes in equity     f or the year ended 30 November 2024  Share capital  Share premium  Capital redemption reserve  Capital reserve  Treasury reserve  Currency translation reserve Fair value reserve of equity investments  Retained earnings Total equity attributable to owners of the Company £'000 Balance at 1 December 2023        1,349 39,700 172           878 (7,939) 3,305 (13) 185,432 222,884 Profit for the year             -               -               -               -               -               -   - 49,692 49,692 Other comprehensive loss for the year             -               -               -               -               -   (4,304) -             -   (4,304)   Total comprehensive (loss)/income for the year             -               -               -               -               -   (4,304) - 49,692 45,388 Transfer of loss on disposal of equity investments through other comprehensive income to retained earnings - - - - - - 13 (13) - Dividends paid to equity holders (note 11) - - - - - - - (15,860) (15,860) Distributions payable to tracker shareholders - - - - - - - (44) (44) Settlement of vested tracker shares (note 8) 5 1,901 - - 3,324 - - (4,167) 1,063 Settlement of share-based payments (note 8) 2 497 - - 7,369 - - (7,539) 329 Purchase of shares by Employee Benefit Trust (note 8) - - - - (10,000) - - - (10,000) Credit to equity for equity-settled share-based payments - - - - - - - 4,894 4,894 Current and deferred tax on share-based payment transactions - - - - - - - (10) (10) Total movements in equity 7 2,398 - - 693 (4,304) 13 26,953 25,760 Balance at 30 November 2024 1,356 42,098 172 878 (7,246) (999) - 212,385 248,644                     Balance at 1 December 2022 1,345 38,239 172 878 (6,581) 4,742 (13) 161,610 200,392 Profit for the year - - - - - - - 56,051 56,051 Other comprehensive loss for the year - - - - - (1,437) - - (1,437) Total comprehensive (loss)/income for the year - - - - - (1,437) - 56,051 54,614 Dividends paid to equity holders (note 11) - - - - - - - (27,373) (27,373) Distributions to tracker shareholders - - - - - - - (94) (94) Settlement of vested and unvested tracker shares (note 8) 3 1,198 - - 3,987 - - (4,795) 393 Settlement of share-based payments (note 8) 1 263 - - 4,655 - - (4,870) 49 Purchase of shares by Employee Benefit Trust (note 8) - - - - (10,000) - - - (10,000) Credit to equity for equity-settled share-based payments - - - - - - - 4,871 4,871 Current and deferred tax on share-based payment transactions - - - - - - - 32 32 Total movements in equity 4 1,461 - - (1,358) (1,437) - 23,822 22,492 Balance at 30 November 2023 1,349 39,700 172 878 (7,939) 3,305 (13) 185,432 222,884 The accompanying notes form an integral part of these Consolidated Financial Statements.       consolidated statement of cash flows for the year ended 30 November 2024 Note 2024 2023 £'000     (restated*)   Cash flows from operating activities   Profit before tax   67,640 77,915 Adjustments for:   Depreciation and amortisation charge 15,254 15,914 Loss on disposal of property, plant and equipment other than right-of-use assets 135 160 Gain on lease modification (69) - Finance income (2,891) (2,257) Finance costs 1,445 698 Gain on disposal of subsidiary 3 (135) - Non-cash charge for share-based payments 4,986 4,871 Operating cash flows before changes in working capital and provisions 86,365 97,301 (Increase)/decrease in receivables (28,382) 3,636 Increase/(decrease) in payables 3,667 (11,821) Decrease in provisions (1,861) (2,220) Cash generated from operations 59,789 86,896 Interest received 2,891 2,257 Income tax paid (23,002) (19,495) Net cash generated from operating activities 39,678 69,658 Cash flows from investing activities   Purchase of property, plant and equipment (6,830) (1,975) Purchase of intangible assets 6 (6,339) (6,237) Net cash used in investing activities (13,169)         (8,212) Cash flows from financing activities   Interest paid 10 (1,445) (698) Lease principal payments 10 (13,111) (14,250) Proceeds from exercise of share options   499 264 Purchase of shares by Employee Benefit Trust 8 (10,000) (10,000) Dividends paid to equity holders 11 (15,860) (20,990) Distributions to tracker shareholders - (94) Net cash used in financing activities (39,917) (45,768) Net (decrease)/increase in cash and cash equivalents (13,408) 15,678 Cash and cash equivalents at beginning of the year 83,202 65,386 Exchange (losses)/gains relating to cash and cash equivalent (126)         2,138 Net cash and cash equivalents at end of the year 7 69,668 83,202         * Certain amounts shown here do not correspond to the FY23 financial statements and reflect the restatement made. Refer to note 1 to the Consolidated Financial Statements for further information.   The accompanying notes form an integral part of these Consolidated Financial Statements.       Notes to the Financial information for the year ended 30 November 2024     1.    BASIS OF PREPARATION AND ACCOUNTING POLICIES   Basis of preparation The financial information in this preliminary announcement has been extracted from the Group audited financial statements for the year ended 30 November 2024 and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group financial statements and this preliminary announcement were approved by the Board of Directors on 27 January 2025. The auditors have reported on the Group's financial statements for the years ended 30 November 2024 and 30 November 2023 under s495 of the Companies Act 2006. The auditors' reports are unqualified and do not contain a statement under section 498(2) or (3) of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 November 2023 were filed with the Registrar of Companies and those for the year ended 30 November 2024 will be filed following the Company's Annual General Meeting.  The Consolidated Financial Statements have been prepared in accordance with UK-adopted International Accounting Standards (IAS) and in accordance with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.  Going concern The Consolidated Financial Statements have been prepared on a going concern basis. The Directors have reviewed the Group's cash flow forecasts, considered the assumptions contained in the budget and medium-term forecasts, and considered associated principal risks which may impact the Group's performance over the going concern assessment period to 31 January 2026. At 30 November 2024, the Group had no debt except for lease liabilities of £39.8 million. Credit facilities relevant to the review period comprise a committed £50.0 million Revolving Credit Facility (RCF) (with the expiry date of 26 July 2027) and an uncommitted £30.0 million accordion facility, both jointly provided by HSBC and Citibank. All these facilities remained undrawn on 30 November 2024. A further uncommitted £5.0 million bank overdraft facility is also held with HSBC, of which £0.1 million (FY23: £nil) was drawn at the year end. In addition, the Group has £69.7 million of cash and cash equivalents available to fund its short-term needs, as well as a substantial working capital position, reflecting net cash due to SThree for placements already undertaken. In FY24, the Group's trading performance declined against the record prior year, driven by persisting challenging market conditions, which have extended beyond the industry's expectations. The total Group net fees declined by 9% YoY on a like-for-like basis, reflecting protracted soft new placement activity across Permanent and Contract, partially offset by ongoing strong Contract extensions. Despite market uncertainties, the Group's long-term prospects and competitive positioning remain strong, underpinned by its strategic focus on STEM and Contract, supported by a robust financial position and significant operational enhancements gradually materialising via our Technology Improvement Programme. Based on this evaluation, the Directors have formed a judgement that the Group has adequate resources to continue in operational existence for the period to 31 January 2026, there are no plausible downside scenarios that would cause an issue for the Group's going concern status, and considered it appropriate to prepare them on the going concern basis. Climate change consideration Climate change is a significant issue for the world and the transition to a low-carbon economy will create both risks and opportunities for the Group. The management team has considered the impact of climate change in preparing these Consolidated Financial Statements in the areas as listed below. These considerations are not viewed to be key areas of judgements or sources of estimation uncertainty in the current financial year. The management team considered the impact from climate change on the following areas:                                                          - The going concern and viability of the Group over the next five years, including the potential impact of climate-related risks, such as SThree's offices impacted by heightened physical risks affecting our operational ability to place contractors and service the existing contracts, resulting in lower revenue and income. This is subject to the ongoing assessment by the management team performed using three climate-related scenarios for 2024-2040. The assessment helps to continually test SThree's strategic resilience and its flexibility to adapt operations to ever-changing risks and opportunities as a consequence of climate change to drive continued growth.                                                                                                 - Useful lives of fixed assets: the impact of climate change is not considered to be material on our existing asset base including on factors like residual values, useful lives and depreciation methods which determine the carrying value of non-current assets. Although the Group invests in low-carbon technology as part of its net zero commitment, there is no immediate risk of material adjustment to the carrying values of the existing assets in the next financial year's results. Over the course of our net zero path, the existing fixed assets are expected to be fully depreciated within the next five to seven years.                                                            - Recoverability of trade receivables and contract assets: the impact of climate-related matters could have an impact on the Group's clients in the future, especially, clients whose businesses/operations could be negatively affected by the introduction of emission-reduction legislation, energy transition plans or by extreme weather and other physical conditions, which could lead to increase in manufacturing costs, dilapidation of their asset base and their ability to pay debts. No material climate-related issues have arisen during the current year that have impacted our assessment of the recoverability of receivables. Given the short-term maturity of trade receivables including contract assets, climate change is unlikely to materially increase our credit risk.                                                                                          - Share-based payments: some performance conditions of the Long-Term Incentive Plan (LTIP) for members of the Executive Committee are linked and measured against ESG metrics since the 2022 financial year. This could impact the future amount of the recognition of the share-based payment expense in the Group income statement. However, as the ESG-related performance condition constitutes 10% of each grant, the impact is low.                                                                                                      - Segmental reporting: in our response to climate change and transition to a net zero target, there has been yet no change to the management information provided to, and reviewed by, the chief operating decision maker each month. Whilst there is currently no material medium-term impact expected from climate change, the management team is aware of the ever-changing risks and will continue to regularly monitor these risks against judgements and estimates made in preparation of the Group's financial statements.          Prior year restatement During the year, the FRC's Corporate Reporting Review Team (CRRT) reviewed the Group's FY23 financial statements. The FRC sought clarification on the recognition and disclosure of the FY22 interim dividend £6.4 million, which was declared in July 2022 but only paid to shareholders at the start of the subsequent financial year (8 December 2022). This review resulted in the Group restating the comparatives for the year ended 30 November 2023 in these financial statements to correct a presentation error of the FY22 interim dividend in the FY23 Consolidated Statement of Cash Flows. The FRC has subsequently closed its review. Funds transferred to the share administrator before 30 November 2022 were presented in operating cash flows in the Consolidated Statement of Cash Flows for the year ended 30 November 2022. The cash flow was a partial prepayment of the interim dividend paid in December 2022. Consequently, the Directors have determined that this cash flow should have been reflected in financing activities in the Consolidated Statement of Cash Flows for the year ended 30 November 2022 rather than in the year to 30 November 2023 as previously presented. The cash balance for FY23 was not misstated. The error has been corrected by restating each of the affected line items in the FY23 Consolidated Statement of Cash Flows, as follows: £'000 30 November 2023 (Decrease)/increase 30 November 2023 (restated) Impact on the Consolidated Statement of Cash Flows       Cash flows from operating activities       Decrease in receivables 10,019 (6,383) 3,636 Cash generated from operations 93,279 (6,383) 86,896 Net cash generated from operating activities 76,041 (6,383) 69,658 Cash flows from financing activities Dividends paid to equity holders (27,373) 6,383 (20,990) Net cash used in financing activities (52,151) 6,383 (45,768)                                                                                                 Accounting policies              The accounting policies used in the preparation of the Consolidated Financial Statements are consistent with those applied in the previous financial year, except for the adoption of new and amended standards effective as of 1 December 2023 as set out below. New and amended standards effective in FY24 and adopted by the Group The following amendments to the accounting standards, issued by the IASB and endorsed by the UK and EU, have been adopted by the Group and became applicable as of 1 December 2023. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards. - Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2). - Definition of Accounting Estimates (Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors ). - Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12 Income Taxes ). - International Tax Reform - Pillar Two Model Rules (Amendments to IAS 12 Income Taxes ). - IFRS 17 Insurance Contracts . New and amended standards that are applicable to the Group but not yet effective As at the date of the financial information in this preliminary announcement, the following amendments to existing standards were in issue and endorsed by the UKEB, but not yet effective. These changes are effective for the SThree's financial year beginning 1 December 2024. These amendments are not expected to have a material impact on the Group in the current or future financial years. - New disclosure requirements for characteristics of supplier finance arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclos ures).                                                                                                      - New requirements for measuring lease liability arising in a sale and leaseback transaction (Amendments to IFRS 16 Leases ).  - New classification requirements for liabilities as current or non-current (Amendments to IAS 1 Presentation of Financial Statements ).                                                                                                    The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.   2.    OPERATING SEGMENTS                                                                                                                                               The Group's operating segments are established on the basis of those components of the Group that are regularly reviewed by the Group's chief operating decision making body, in deciding how to allocate resources and in assessing performance. The Group's business is considered primarily from a geographical perspective. The Directors have determined the chief operating decision-making body (CODM) to be the Executive Committee made up of the Chief Executive Officer, the Chief Financial Officer, the Chief Operations Officer, the Chief Commercial Officer and the Chief People Officer and Regional Managing Directors, with other senior management attending via invitation. The Group also presents separately the net fees of its five key markets: Germany, the Netherlands, the USA, the UK and Japan, as well as a breakdown of net fees per Contract and Permanent, referred to as 'service mix'. DACH region comprises Austria, Germany and Switzerland. Rest of Europe comprises the UK, Belgium and France, and Middle East & Asia includes Japan and the UAE. Countries aggregated into DACH, Rest of Europe, Netherlands (including Spain), and separately into Middle East & Asia have similar economic risks and prospects, i.e. they are expected to generate similar average gross margins over the long term, and are similar in each of the following areas: -  the nature of the services (recruitment/candidate placement); -  the class of candidates (candidates, who we place with our clients, represent skill-sets in Life Sciences, Technology, Engineering and Mathematics disciplines); and - the methods used in which they provide services to clients (independent contractors, employed contractors and permanent candidates). The Group's management reporting and controlling systems use accounting policies that are the same as those described in these financial statements and the accompanying notes. Revenue, cost of sales and net fees by reportable segment                The Group assesses the performance of its operating segments through a measure of segment profit or loss which is referred to as 'net fees' in the management reporting and controlling systems. Net fees is the measure of segment profit comprising revenue less cost of sales.     Revenue Cost of sales Net fees £'000 2024 2023 2024 2023 2024 2023     DACH 456,051 524,732 328,505 375,807 127,547 148,925 Rest of Europe 353,150 399,862 291,836 329,423 61,314 70,439 Netherlands including Spain 343,571 367,643   265,039   285,494 78,532 82,149 USA 299,229 328,293 217,195 231,883 82,034 96,410 Middle East & Asia 40,905 42,637 21,252 21,785 19,653 20,852       1,492,906 1,663,167 1,123,827 1,244,392 369,079 418,775                                                                                                   Split of revenue from contracts with customers The Group derives revenue from the transfer of services over time and at a point in time in the following geographical regions: 2024 £'000 DACH Rest of Europe Netherlands including Spain USA Middle East & Asia Total Timing of revenue recognition Over time 427,228 351,135 334,802 290,774 27,194 1,431,133 At a point in time 28,823 2,015 8,769 8,455 13,711 61,773 456,051 353,150 343,571 299,229 40,905 1,492,906   2023 £'000 DACH Rest of Europe Netherlands including Spain USA Middle East & Asia Total Timing of revenue recognition Over time 483,491 396,354 358,122 316,866 29,382 1,584,215 At a point in time 41,241 3,508 9,521 11,427 13,255 78,952 524,732 399,862 367,643 328,293 42,637 1,663,167   Major customers In FY24 and FY23, no single customer generated more than 10% of the Group's revenue. Other information                                                                                  The following segmental analysis has been included as additional disclosure to the requirements of IFRS 8 Operating Segments . The Group's revenue from external customers, its net fees and information about its segment assets (non-current assets excluding deferred tax assets) by key location are detailed below:                                                   Revenue Cost of sales Net fees £'000 2024 2023 2024 2023 2024 2023 Germany 393,850 453,537 282,082 322,662 111,768 130,875 Netherlands 318,665 350,295 247,706 273,222 70,959 77,073 USA 299,229 328,293 217,195 231,883 82,034 96,410 UK 226,904 263,461 188,575 218,508 38,329 44,953 Japan 13,356 10,813 2,764 1,496 10,592 9,317 RoW (1)   240,902 256,768 185,505 196,621 55,397 60,147       1,492,906 1,663,167 1,123,827 1,244,392 369,079 418,775     30 November 30 November £'000     2024 2023 Non-current assets UK 28,334 11,458 Germany 13,887 11,891 USA 7,553 2,687 Netherlands 4,245 5,678 Japan 1,792 2,730 RoW (1)   2,528 3,738     58,339         38,182 (1) RoW (Rest of the World) includes all countries other than listed. Non-current assets do not include Deferred Tax Assets as they are not reviewed by the CODM.   The following segmental analysis by brands, recruitment classification and sectors (being the profession of candidates placed) has been included as additional disclosure to the requirements of IFRS 8 Operating Segments .   Revenue Cost of sales Net fees £'000 2024 2023 2024 2023 2024 2023 Brands Progressive 560,519 565,938 422,172 422,272 138,347 143,666 Computer Futures 454,982 538,710 338,826 401,119 116,156 137,591 Real Staffing Group 239,976 316,062 176,938 232,322 63,038 83,740 Huxley Associates 237,429 242,457 185,891 188,679 51,538 53,778       1,492,906 1,663,167 1,123,827 1,244,392 369,079 418,775 Other brands including Global Enterprise Partners, JP Gray and Madison Black are rolled into the above brands.     Revenue Cost of sales Net fees £'000 2024 2023 2024 2023 2024 2023 Service mix Contract 1,431,133 1,584,215 1,120,516 1,240,713 310,617 343,502 Permanent 61,773 78,952 3,311 3,679 58,462 75,273 1,492,906 1,663,167 1,123,827 1,244,392 369,079 418,775   Revenue Cost of sales Net fees £'000 2024 2023 2024 2023 2024 2023 Skills mix Technology 747,598 842,634 569,904 640,124 177,694 202,510 Engineering 422,984 415,357 317,654 306,537 105,330 108,820 Life Sciences 221,295 270,235 160,369 194,719 60,926 75,516 Other 101,029 134,941 75,900 103,012 25,129 31,929       1,492,906 1,663,167 1,123,827 1,244,392 369,079 418,775   3.    ADMINISTRATIVE EXPENSES   Operating profit is stated after charging/(crediting):   £'000 2024 2023 Staff costs 234,741 255,007 Depreciation 15,230 15,898 Amortisation 24 16 Loss on disposal of property, plant and equipment 135 160 Gain on lease modification (69) - Service lease charges - Buildings (1) 2,464 2,176 Service lease charges - Cars (1) 1,903 1,890 Foreign exchange losses 742 1,882 Research and development tax credits (2) (1,647) - Gain on disposal of subsidiary (3) (135) - Other income (4) (2,690) -   1.     Service lease charges represent payments that vary based on factors other than an index or a rate, such as building maintenance, small repairs, cleaning charges, and other management fees, and are not included in the present value calculation of lease liabilities and are recognised in the income statement and presented as operating cash flows. 2.     During the year, management assessed the Group-wide Technology Improvement Programme (TIP) for any claim for research and development expenditure credits (RDEC). The claims were determined for TIP-related expenditure incurred in the three years to 30 November 2024. The underlying qualifying expenditure, based on which the claims were quantified, was a mixture of costs expensed immediately to the income statement for these financial periods, £1.6 million as presented in the above table, and costs capitalised as part of assets under construction (intangible assets in the Consolidated Statement of Financial Position - the RDEC claim reduced the capitalised cost and will impact the Consolidated Income Statement on a s...

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