Business
FY25 Half Year Results
FY25 Half Year Results.
About this update from Sthree Plc
STEADY PROGRESS ACROSS H1, FULL YEAR GUIDANCE REAFFIRMED SThree plc ('SThree' or the 'Group'), the global STEM workforce consultancy, reports its financial results for the six months ended 31 May 2025. FINANCIAL HIGHLIGHTS H1 FY25 H1 FY24 Variance Reported Like-for-like (1) Revenue (£ million) 648.8 763.4 -15% -14% Net fees (£ million) 159.1 188.7 -16% -14% Operating profit (£ million) 10.0 37.7 -73% -72% Operating profit conversion ratio 6.3% 20.0% -13.7% pts -13.4% pts Profit before tax (£ million) 10.1 39.0 -74% -72% Basic earnings per share (pence) 5.6 21.2 -74% -72% Interim dividend per share (pence) 5.1 5.1 - - Net cash (£ million) (2) 47.8 90.0 -47% -47% HALF-YEAR HIGHLIGHTS · The Group delivered net fees of £159.1 million, down 14% YoY ( 3) , with a modest sequential improvement quarter-on-quarter during Q2 , against the backdrop of persistent challenging market conditions. o Net fees across our three largest countries represent 72% of Group net fees, with Netherlands down 22 %, Germany down 14 % and USA down 5 %. · Contract net fees, which represent 84% of Group net fees (H1 FY24: 84%), were down 14 % as continued softness in new business activity was partially offset by strong contract extensions; modest sequential quarter-on-quarter improvement delivered during Q2, underpinned by an improved US performance. · Permanent net fees, whilst declining 13% YoY due to tough market conditions across most of our regions, achieved a sequential improvement compared to FY24 driven by growth in the US and Japan. · Contractor order book (4) of £163.8 million, down 8 % YoY with a reduced rate of decline versus FY24 year-end, continues to represent sector-leading visibility with the equivalent of circa five months' net fees. · Profit before tax (PBT) of £10.1 million ( down 72% YoY) as the challenging economic conditions continue to impact net fees, partially offset by disciplined management of operating costs. · £20 million share buyback programme launched in December resulted in a total of 7.8 million shares being purchased and subsequently cancelled during H1 FY25. · Robust balance sheet with net cash of £47.8 million at 31 May 2025 (FY24: £69.7 million). Excluding the impact of the share buyback, net cash is up £15 million since Q1 largely reflecting improved cash collection. · Interim dividend maintained at 5.1 pence (H1 FY24: 5.1 pence) per share, underpinned by the strength of our balance sheet and strong track record of cash generation. · Technology Improvement Programme (TIP) remains on track and on budget, with 8 out of 11 markets actively using the platform representing over 80% of Group net fees. OUTLOOK · New business remains soft however we are seeing pockets of improving momentum in certain segments and markets, including in US and Japan where initiatives to improve market positioning are gaining traction. · Realisation of further operational efficiencies to drive £6 million of in-year net savings remains on track. · Performance for FY25 expected to be in line with previously announced £25.0 million PBT guidance (5) . (1) Variance compares reported H1 FY25 against reported H1 FY24 on a constant currency basis, whereby the prior financial period foreign exchange rates are applied to current and prior financial period results to remove the impact of exchange rate fluctuations. (2) Net cash represents cash and cash equivalents less borrowings and bank overdrafts and excluding leases. (3) All YoY growth rates in this announcement are expressed at constant currency. (4) The contractor order book represents value of net fees until contractual end dates, assuming all contractual hours are worked. 5) As guided on 12 December 2024, the Board expects FY25 PBT to be c.£25 million. Timo Lehne, Chief Executive Officer, commented: "The Group delivered a stable performance in the first half of the year against a persistently challenging market environment. Whilst overall new business activity remains soft, the continued necessity for critical STEM skills is evidenced by our robust Contract extensions and we have seen some improved momentum within our focused markets and skills mix, such as the US and engineering. "We have made significant progress in preparing our business for when market conditions improve and to align with structural opportunities. We now have over 80% of our business transacting through our end-to-end, integrated technology infrastructure as a result of the TIP rollout, helping to drive operational efficiencies and enhancing our ability to scale. Across the US and Germany, we are already seeing reductions in time to first interview and productivity improvements in our most junior consultants, two key metrics when we set out on this journey. In just the last six months, we've launched 60 new product enhancements and continue to develop five key features powered by AI. This shows that we are now able to innovate at pace, with the foundations to unlock rich data insights and layer in new, future-ready functionality. "We enter the second half of the year in line with expectations. We are building an organisation fit for purpose, which, combined with our industry experience, deep networks and strong commercial footing, means we look ahead to the future with confidence." Analyst conference call SThree is hosting a webinar for analysts and investors today at 08:30 BST to present the Group's results for the six months ended 31 May 2025. If you would like to register for the conference call, please contact [email protected] . Forward looking dates The Group will present its Q3 FY 25 Trading Update on 16 September 2025. Enquiries: SThree plc Timo Lehne, CEO via Alma Andrew Beach, CFO Keren Oser, Investor Relations Director Charlie Hildesley, Investor Relations Manager 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 global STEM workforce consultancy, placing highly skilled, STEM specialist workers in the industries where they are needed most. We advise businesses, build expert teams, and deliver project solutions for our clients. With more than 38 years of experience in pure-play STEM and a global team with local expertise across 11 countries, we cover high-demand skills across Engineering, Life Sciences and Technology roles. We provide permanent and flexible contract talent to a diverse base of around 6,000 clients. By combining advanced technology with expertise, we push beyond traditional boundaries to deliver tailored solutions, leveraging data and insight from our world-class operating platform. 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. Chief Executive Officer's STATEMENT Introduction The Group recorded a steady performance for the first six months of the year, with our Contract business delivering a modest sequential improvement in Q2, despite a challenging market environment. Our specialist STEM expertise and Contract focus continue to underscore our strong strategic position. Robust Contract extensions partially offset weak new business activity, again evidencing our clients' priority to retain critical STEM skills through-cycle and underpinning the sector-leading visibility of our resilient business model. Three years ago, we started laying the groundwork to re-architect our organisation with state-of-the-art digital infrastructure through our Technology Improvement Programme (TIP). In doing so, we have unlocked seamless enterprise-wide collaboration and data flow, while creating the foundation to layer-in new functionality and next-generation tools at pace. Today, 8 out of our 11 global markets, representing over 80% of Group net fees, are now equipped with these capabilities - fully standardised across a single end-to-end technology platform, from order-to-cash. Whilst it has been a big effort for our teams and not without challenges, we firmly believe that this ground-up approach has enabled us to embed agile, connected and future-ready technology deep within all aspects of our organisation, unencumbered by legacy systems. In particular, the TIP gives us the scope to enable rapid scaling of our resilient, but complex, Employed Contractor Model (ECM) solution, which continues to outperform the Independent Contractor model. The potential of TIP across our business, combined with our specialism and scale, provides strong, first-mover competitive differentiation. Market and Positioning The prolonged uncertainty we have seen across global markets for the last three years has impacted overall investment levels in our end markets, with delayed decision-making continuing to be the default strategy of business leaders in a risk averse climate. This market context has persisted longer than many had initially anticipated, however, we nonetheless expect this extended cycle to eventually subside and investment to resume. When this confidence returns, we are well-placed to meet this market demand. We have taken this time to prepare for the future, enhancing our value proposition and improving our service delivery, to ensure that when the market turn occurs, we are in a strong position to capitalise on it. Our conviction continues to be that STEM skills will build the future in the industries we serve, and these skills remain particularly well aligned to our Contract model. Extending the lens further beyond economic cycles, the rapid availability of new technologies, including generative AI and machine learning, is driving more fundamental changes on a longer-term horizon, both in terms of the markets we serve and the broader sector within which we operate. Examining this key market dynamic in detail, we believe we are well-placed: Digital transformation of our customers' industries: Helping our clients build a strong talent bench for the future Organisations of all sizes are reimagining their business models and workforces. They are now faced with making smart and strategic decisions to ensure they have the skills and expertise needed to compete in an AI future. In other words, striving to become what Microsoft labels a 'Frontier Firm', one that blends machine intelligence with human judgement to scale rapidly, operate with agility and generate value faster. 1 We have long recognised that structural megatrends, including technological advances, will shape the workforce of the future, and we have deliberately placed our focus at the heart of this opportunity. The talent pool remains tight, with a recent Microsoft study reporting that " 78% of leaders are considering hiring for AI-specific roles to prepare for the future - and that jumps to 95% for Frontier Firms. " 1 For most organisations, they are only at the start of their transformation journey 2 - and it is here where we help clients build a workforce infrastructure that underpins AI innovation across roles and across industries. Our Technology focus is on connecting our clients across a wide range of industries with the 'heavy-lifting' skills that will enable them to prepare their processes and data to effectively adopt and benefit from AI tools. Leveraging the relationships and networks we have established over decades, we understand where skill gaps are and how to close them meaning we are well placed when general market confidence returns. Digital transformation of our industry: Delivering a high-value strategic service through tech-enabled expertise Digital transformation including advancements in AI, is also reshaping the industry of staffing, bringing with it opportunities, including an ability to deliver enhanced client and candidate services and drive efficiencies, but also challenges, particularly acute for businesses lacking the scale to support digital investment, and which operate within the high volume, transactional segments of the market. For SThree, our scale, digital capabilities and workforce solutions mean we are ideally positioned to not only keep pace with this evolving landscape but lead the future of the industry. We have long provided more than transactional staffing to our customers. We are a workforce consultancy with a suite of resourcing solutions, from compliance services, project solutions and workforce structuring, to the management of c.9,000 contractors from 11 countries on behalf of our clients. We specialise in high-value, complex, flexible talent where our consultative approach adds the most value and where human expertise, supported by digital tools, remains essential to the delivery of quality at pace. By combining our deep niche expertise, scale, and strong networks with digital capabilities, we are positioned to innovate faster, scale more efficiently, and deliver a more seamless experience to our clients and candidates in the industries we serve, such as energy, engineering, public sector, financial services and pharmaceuticals. Strategy Execution In our ambition of building SThree as the global STEM workforce consultancy, we pursue our opportunity through clearly defined strategic pillars. As part of our ongoing evolution, we took the decision to reassess the alignment of our growth pillars to our business strategy and have introduced a fifth strategic pillar to support our execution. In addition to our Places, Platform, Proposition and People, we will now also be reporting our strategic progress against our Customer pillar - helping to hone our focus as we look to grow market share by engaging existing and new clients and candidates who value specialism at scale. We believe that these pillars work together synergistically to unlock our full growth potential. Places Our market reach remained consistent in the period, with an active coverage of 11 countries which align to the best STEM markets. We continually assess our footprint across geography, skills verticals and market positioning under our 'Market Investment' framework to fine-tune our operations to ensure we are fully ready to capitalise on key STEM markets. Since early 2023, we have been actively shifting towards a more globally diverse footprint, with increased emphasis on the USA and APAC regions, ensuring we are strategically positioned to capture the significant global growth potential. An example of this are the internal and go-to-market initiatives we rolled out in our US business in the prior year in anticipation of the market rebounding earlier than other regions. Initiatives included targeted investment in core skills verticals to rebalance our portfolio, bolstering our Permanent offering and refining our go-to-market strategy in the region. The value derived from these efforts is evident in the early positive momentum we experienced through the period, with the Q2 performance recovering to prior-year levels, underpinned by a strong performance in our engineering skills vertical. Platform H1 marked another chapter in our TIP journey, both in terms of the maturity of our technology infrastructure and its measurable impact across the business. In addition to the ongoing roll-out of TIP across new markets (Netherlands, France, Austria, Switzerland, Spain), our focus in the period was on feature development, platform scalability, and AI integration. In the past six months, we have delivered 60 new feature releases, including two new AI-enabled solutions, demonstrating a step change in the pace of our delivery capability. This included the launch of Summary AI and client timesheet verification (COT) AI - each designed to streamline key recruitment and operational workflows, improve consultant effectiveness, and automate high-volume manual tasks such as timesheet validation and candidate documentation. The progress highlights a sustained rhythm of high-value platform evolution and a step-change in the pace of functionality delivery, representing many multiples of the releases we could previously deliver over the course of a year. As anticipated, this is driving the initial wave of efficiency gains with £6.5 million of annualised savings achieved to date. The new platform has enabled end-to-end digitalisation and automation of our order-to-cash process, allowing us to radically simplify and streamline our back and middle office operations. By integrating previously fragmented workflows into a unified platform with embedded automation and straight-through processing, we have materially reduced the need for manual intervention, rekeying of data, and exception management. We are also benefiting from enhanced data and reporting capabilities that drive faster and more impactful decision making reducing the need for sales management layers. Importantly, we are also seeing early but compelling signs of commercial upside - the second wave of benefits to materialise. Across the markets that have benefited from more time to adopt the new tools, US and Germany, we have seen a 34% reduction in time to first interview as well as improved placement productivity levels for our most junior cohorts. This is significant and, whilst it is difficult to attribute enhancements in placement performance, our analysis prior to TIP indicated that productivity of our junior 0-24 month cohort was largely unaffected by the trading environment suggesting that our systems transformation is directly enabling improved sales outcomes. In the US and Germany, we saw a productivity improvement for our 0-24 month cohort of 32% and 5% respectively in H1. Moreover, the platform's ability to capture structured data across each stage of the value chain is providing us with powerful new levers for optimisation, predictive analytics, and dynamic resource allocation. Looking ahead to H2, we are maintaining strong momentum as we complete the global rollout, comprising Germany ECM, Belgium, Dubai, and Japan. Over 20 new platform enhancements are already in development, including two next-generation AI tools, designed to support consultants in opening new opportunities and maximising their networks, another key step in embedding intelligence into the workflow. We have started to show that the TIP is not just delivering functional improvements but is also beginning to unlock commercial and operational upside, particularly where maturity, adoption, and leadership alignment are strong. As we continue to scale globally, we remain confident that the TIP will be a key driver of high-margin growth, structural efficiency, and sustained competitive advantage. Proposition It has been a busy and productive H1 building our brand positioning. We took a meaningful step forward in this journey with our go-to-market branding refresh, which brought further clarity to our market position as a trusted strategic partner providing workforce solutions. We tied each of our seven go-to-market brands closer together as part of the wider SThree family - unlocking value by leveraging the collective power of our STEM expertise and global network while retaining a clear focus and specialism behind each brand. In practice, this means that alongside a new consistent look and feel, each brand will now be endorsed by the parent brand, SThree. We have seen good initial reception from our customers and partners, and we believe this will further support our ambition to be the authority in the STEM world of work. In addition, we launched our inaugural STEM Skills Index 3 , a data-led index of nations ranked on their ability to cultivate, retain and apply STEM expertise. Developed by SThree in partnership with the Centre for Economics and Business Research (Cebr), the Index identifies which countries are leading in STEM and which risk being outpaced, as well as a detailed view of where the world's most capable STEM workforces are emerging and where critical gaps remain. Since its launch, the Index has formed a cornerstone of SThree's thought leadership, as well as proving a valuable tool for our consultants to engage clients in data-led conversations around workforce capability, STEM talent strategy, and long-term planning. Customers We have long placed clients and candidates at the heart of everything we do, by building exceptional customer experiences and adapting our service lines to meet evolving market needs and preferences. In line with our refreshed go-to-market branding, we have now introduced our new Customer pillar, which crystalises our strategy to drive revenue growth through deeper client engagement and strong candidate relationships. Supported by our TIP, new brand positioning and team development, we are now more aligned and joined up as an organisation than ever before to improve and develop our service proposition and build our position as a strategic STEM workforce partner. In terms of our enterprise clients, we continue to drive closer collaboration, and this is evidenced by an increased level of client meetings compared to last year. Our overall performance continues to be influenced by a high proportion of SME clients within our global client base, which tends to be more volatile through economic cycles. As a result, we are focused on balancing our portfolio with a push into the larger enterprise space, through our Global Client Strategy, focused on creating a consistent and standardised approach of growing our key strategic accounts and the way we partner with them. We are making good progress, with the performance of our top client cohort particularly encouraging. For our candidates, we are focussed on building long-term relationships, working to connect specialist with dynamic organisations. Developed over decades, our deep network is built through multi-channel campaigns including industry events, thought leadership and digital marketing. To support our candidate initiatives, we are continuing to innovate our systems and processes to improve and streamline candidate user experience. People The full potential of the exciting changes we are making lies in the hands of our people. From the outset of the TIP, we have paired our technology implementation with investment in people, fostering a culture of acceptance and continuous learning. We continue to roll out global training across our systems and new ways of working, and we are pleased to see strong uptake and engagement which is working to drive greater levels of collaboration. As part of our commitment to thinking big, we brought our sales efforts more to the forefront of what we do, with a strategic shift towards driving a high-performance culture. A natural next evolution in this journey was the launch of two new performance frameworks across our sales function. These frameworks are designed to leverage the Group's key assets, helping us work smarter, build stronger relationships and deliver exceptional value. The first framework is called AIR, which stands for Attitude, Input, and Results . It provides a clear structure for how we measure performance across our sales teams, with a strong emphasis on personal accountability. The second framework is PACE, which stands for Prioritise with purpose, Accelerate progress, Control the controllables, and Evaluate and energise . This framework sets out the behavioural standards that support success and helps our teams create the conditions they need to perform at their best. In H1, we trained all our sales teams on our refreshed approach to performance, centred on using the tools, culture, and capabilities we have built to lift everyone, together. Delivering impact beyond our business At the heart of our business lies a commitment to sustainability and long-term positive impact. Despite economic fluctuations, we remain resolute in our focus to delivering on our ESG commitments, which we regard as a fundamental driver of long-term value creation. By embedding responsible practices throughout our business, we are enhancing resilience and aligning with the evolving expectations of our clients, candidates, and investors. Our sustainable business practices and ESG commitments are demonstrated by: · Our Net Zero ambition: We aim to achieve Net Zero across Scope 1, 2, and 3 emissions by 2050. As of FY24, we have reduced our carbon emissions by 21% compared to FY19, our baseline year for our SBTi Net Zero target. · Gender diversity in leadership: Our targets align with the FTSE Women Leaders Review, aiming for 40% female representation on the Board and in leadership roles. As of H1, women represent 43% of our Board and hold 40% of leadership positions. · Ethnic diversity targets: In line with the Parker Review, we have met and maintained our target of at least one Board member from an ethnic minority background since 2024. We are also working towards 18% ethnic minority representation in UK leadership by FY27, with current representation at 17%. · Growth in clean energy: Clean energy now accounts for 14% of Group net fees and remains a key growth area for SThree. In the first half of the year, our clean energy business grew by 6% YoY. Current trading and outlook Whilst mindful of wider macro uncertainty, we enter the second half in line with market expectations for the full year. New business activity remains soft however we are seeing some improving momentum in certain segments and markets, including our US and Japan businesses, where our targeted initiatives to enhance our market positioning are showing signs of traction. As previously indicated, when markets recover more broadly we would expect to see our permanent market to show the first signs of improvement given its upfront net fee recognition profile, whilst the recovery in Contract net fees tends to be smoother and from a higher overall level, reflecting the resilience of the business model. In addition, we are making good progress with the realisation of operational efficiencies, on track with our FY25 plans. We continue to build a business ready for the future and to capitalise on the underlying improvement we are seeing in pockets of our business. We are well on our way to transitioning from an analogue model to a technology-enabled one, unlocking scalable efficiencies while enhancing the experience for our consultants, clients, and internal teams. This is particularly important as we grow in complexity and volume - it gives us the agility and operating leverage we require to support future expansion, both organically and through select M&A. Combined with a robust financial position, resilient business model and specialist STEM workforce value proposition, we are optimistic about our long-term prospects. Sources 1 Microsoft, Work Trend Index Annual Report, 2025 2 National Bureau of Economic Research 3 SThree STEM Index Group FINANCIAL AND OPERATIONAL REVIEW Overview Amidst the persistent challenging market conditions, Group net fees were down 16% YoY on a reported basis (down 14% on a like-for-like basis) reflecting the continued softness in new business across Contract and Permanent. Strong Contract extensions continued to underpin performance, reflecting our customers' priority to retain critical STEM skills. Our Contract business, which represents 84% of Group, saw net fees decline by 14% YoY on a like-for-like basis, with a modest sequential improvement quarter-on-quarter underpinned by the performance from the USA. The contractor order book closed at £163.8 million which, whilst down 8% YoY, continues to provide sector-leading visibility with the equivalent of circa five months' net fees. Permanent net fees were down 13 % YoY on a like-for-like basis impacted by tough market conditions across most of our regions, with sequential improvement compared to the rate of decline reported in FY24 supported by growth in USA and Japan. From a skill perspective, the Group's Engineering net fees were down 9% against a record prior-year performance, whilst Life Sciences net fees were down 15% YoY. Technology, our largest discipline, declined 18% YoY primarily driven by the challenging global market conditions . Overall, Group operating profit was £10.0 million (H1 FY24: £37.7 million), down 73% on a reported basis (down 72% YoY on a like-for-like basis), driven primarily by the decline in net fees across key markets, partially offset by lower personnel costs (average headcount down 5% YoY), along with tight cost management. Productivity in the first half was down 10% YoY as the rate of net fee decline was higher than the rate of decline in average headcount . The operating profit conversion ratio for the financial period reduced to 6.3% (H1 FY24: 20.0%). Group net fees % of Group H1 FY25 (£'000) H1 FY24 (£'000) Variance Reported Like-for-like (1) Geographical mix DACH 33% 53,188 64,197 -17% -15% USA 25% 39,378 41,841 -6% -5% Netherlands including Spain 20% 32,108 41,121 -22% -20% Rest of Europe 16% 25,661 31,311 -18% -17% Middle East & Asia 6% 8,731 10,273 -15% -10% Total 100% 159,066 188,743 -16% -14% Skills mix Technology 45% 72,227 90,153 -20% -18% Engineering 30% 48,312 53,956 -10% -9% Life Sciences 17% 26,410 31,618 -16% -15% Other 8% 12,117 13,016 -7% -4% Total 100% 159,066 188,743 -16% -14% Service mix Contract 84% 133,840 158,712 -16% -14% Permanent 16% 25,226 30,031 -16% -13% Total 100% 159,066 188,743 -16% -14% (1) Variance compares reported H1 FY25 against reported H1 FY24 on a constant currency basis, whereby the prior financial period foreign exchange rates are applied to current and prior financial period results to remove the impact of exchange rate fluctuations. Business mix The Group is well diversified, both geographically and by the skills we place across multiple sectors. Our top three countries represent 72 % of Group net fees, with Germany accounting for 29 %, USA 25% and Netherlands 18 %. Our Contract business declined by 14 % on a like-for-like basis with continued softness in new business partially offset by robust extensions, and continues to represent 84 % of the Group net fees. Our Permanent business, representing 16 % of the Group, saw net fees decline 13 % YoY , impacted by tough market conditions across most of our regions . Our market invest model enables us to continually review our markets to prioritise investments where we see opportunities for growth and the strongest returns. Within our skill verticals, Life Sciences declined by 15% and Technology by 18%, reflecting ongoing market uncertainty. Technology and Life Sciences now represent 45% and 17% of Group net fees respectively. Engineering declined 9% against a record prior year, and represents 30% of Group net fees. Operational review by reporting segment DACH (33% of Group net fees) H1 FY25 H1 FY24 Variance Performance highlights Reported Like-for-like Revenue (£'000) 196,151 229,962 -15% -13% Net fees (£'000) 53,188 64,197 -17% -15% Average total headcount (FTE) 737 818 -10% n/a · DACH is our largest region comprising businesses in Austria, Germany and Switzerland, with Germany accounting for 88% of net fees. Net fees declined by 13% YoY, with Contract down 12% and Permanent down 25%. · Germany saw Contract down 10%, with overall net fees down 14%, predominantly reflecting lower levels of demand for Technology skills (down 14%). · Switzerland saw net fees decline 17% YoY driven by Technology, down 23%. · Austria net fees declined 31% YoY primarily due to reduced demand for Technology roles. USA (25% of Group net fees) H1 FY25 H1 FY24 Variance Performance highlights Reported Like-for-like Revenue (£'000) 140,360 154,463 -9% -8% Net fees (£'000) 39,378 41,841 -6% -5% Average total headcount (FTE) 379 412 -8% n/a · The USA is the world's largest specialist STEM staffing market and our second-largest region on a net fee basis. · USA saw net fees decline 5% YoY, but delivered a robust quarter-on-quarter improvement despite the heightened market volatility following the US administration's announcement of higher trade tariffs. · Contract net fees declined by 9% YoY partially offset by an exceptional performance in Permanent, up 34% YoY, owing to a recovery in demand for roles across most of the skill verticals and our internal and go-to-market initiatives gaining traction. Netherlands including Spain (20% of Group net fees) H1 FY25 H1 FY24 Variance Performance highlights Reported Like-for-like Revenue (£'000) 143,195 175,913 -19% -17% Net fees (£'000) 32,108 41,121 -22% -20% Average total headcount (FTE) 399 415 -4% n/a · The region saw net fees decline by 20% YoY, with Contract down 19% and Permanent down 30%. · Netherlands, the larger of the two countries in the region (89% of net fees), generated net fees significantly lower than in the prior year, down 22% YoY. This was primarily driven by reduced demand for Engineering and Technology skills across both Contract and Permanent and strong prior year comparators, including a record performance in Engineering. · Spain traded broadly in line with the prior year, reflecting stable demand for Technology roles, its main discipline, and 24% growth in Engineering. Rest of Europe (16% of Group net fees) H1 FY25 H1 FY24 Variance Performance highlights Reported Like-for-like Revenue (£'000) 148,662 181,709 -18% -17% Net fees (£'000) 25,661 31,311 -18% -17% Average total headcount (FTE) 416 442 -6% n/a · Rest of Europe comprises businesses in the UK, Belgium and France, where market volatility remained high due to geopolitical tensions. · Net fees declined by 17% YoY. Contract, which represents 97% of net fees for the region, declined 17%, whilst Permanent declined 12%, reflecting the tough market conditions. · The UK, our largest country in the region (57% of net fees), saw net fees down 28%, driven by reduced level of demand for Technology and Engineering skills, down 34% YoY and 20% YoY respectively. · Net fees for Belgium increased 15% YoY, while net fees for France were down 8% YoY. Middle East & Asia (6% of Group net fees) H1 FY25 H1 FY24 Variance Performance highlights Reported Like-for-like Revenue (£'000) 20,454 21,357 -4% -2% Net fees (£'000) 8,731 10,273 -15% -10% Average total headcount (FTE) 220 193 +14% n/a · Our Middle East & Asia business includes Japan and UAE, and accounts for 6% of Group net fees. · Net fees were down 10% YoY, with Contract down 17% and Permanent down 7%. · Japan, which represents 70% of the region, delivered an improved performance for the period, up 13% YoY, driven by demand for Technology and Engineering skills. · Net fees in UAE were down 39% driven by lower levels of demand across most of the skill verticals. Chief financial officer's REVIEW The Group delivered a stable first-half performance, with a modest sequential improvement quarter-on-quarter. Total net fees declined 14% YoY on a like-for-like basis, i mpacted by the continued soft new business activity, partially offset by robust contract extensions . Income statement On a reported basis revenue for the half year was down 15% to £648.8 million (H1 FY24: reported £763.4 million) while net fees decreased by 16% to £159.1 million (H1 FY24 £188.7 million). Our two main trading currencies, the US Dollar and the Euro, weakened against Sterling when compared to the same period last year, and had an overall negative impact of £2.7 million on the total net fees. Therefore, when presented on a constant currency basis, the net fees decreased by 14% YoY. Net fees in our Contract business, which represented 84% of the Group net fees for the half year (H1 FY24: 84%), declined by 14% on a like-for-like basis, driven by the ongoing softness in new business but partially offset by continued strong contract extensions. Across our core regions, DACH was down 12% YoY, predominantly reflecting lower levels of demand for Technology skills. In the USA, Contract net fees, which now account for over 87% of the region total net fees, were down 9% YoY, but displayed a strong quarter-on-quarter improvement despite the heightened market uncertainty from tariffs. Netherlands (including Spain) saw Contract net fee income decline by 19% YoY, driven by reduced demand for Contract roles in Engineering and Technology. In the Rest of Europe and Middle East & Asia, Contract performance was down 17% YoY. Skills-wise, Engineering was down 11% YoY, with Life Sciences down 15% and Technology down 17%, reflecting tough market conditions. The Group Contract net fee margin [1] remained broadly consistent at 21.5% YoY (H1 FY24: 21.7%). The contractor order boo k closed at £163.8 million, down 8% YoY, and accounts for approximately five months' worth of net fees, providing us with good forward visibility for the remainder of 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 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 down 13% on a like-for-like basis reflecting market conditions across most regions. Our largest Permanent market, DACH, reported a decline of 25%, driven by reduced demand for Technology roles. Netherlands region was down 30 % affected by decline in Engineering and Technology , Rest of Europe down 12 % , and Middle East & Asia down 7%. USA reported an exceptional performance in Permanent and grew by 34% owing to a recovery in demand for roles across most skill verticals . Permanent average fees increased by 14% YoY in the period, with average permanent fee margin (net fees as a percentage of salary) increased to 27.8% (H1 FY24: 27.3%). Operating expenses were reduced by 1% YoY on a reported basis, despite incurring additional costs to deliver future savings, and amounted to £149.1 million (H1 FY24: £151.0 million). Overall, the operating profit was £10.0 million (H1 FY24: £37.7 million), down 72% YoY on a like-for-like basis, while the Group operating profit conversion ratio 1 decreased to 6.3% (H1 FY24: 20.0%) reflecting the protracted challenging economic conditions impacting net fees, partially offset by disciplined management of operating costs and the early realisation of further operational efficiencies. This programme, previously communicated in December, is primarily focused on the streamlining of operations through the removal of redundant back-office positions and non-fee earner front-office management layers. Early efficiencies achieved from the TIP, along with insights into its full potential, gave the business the confidence to accelerate its implementation. To date, we have made good progress and remain on track to deliver the £6 million in-year net savings target for FY25. Of this, £1.8 million has already been achieved. Since most of the costs to deliver were incurred in the first half of the year, we expect a natural uplift in savings in the second half. The net currency movements versus Sterling were unfavourable to the operating profit, reducing it by £0.7 million. Net finance income The Group generated a small net finance income of £0.1 million as compared to net finance income of £1.3 million in the prior period. The YoY decrease was driven primarily by lower surplus cash balances invested in the money markets, as well as higher lease-related interest. Income tax The total tax charge for the half year on the Group's profit before tax was £2.9 million (H1 FY24: £10.9 million), representing an estimated full-year effective tax rate (ETR ) of 28.5% (H1 FY24: 27.9%). The Group's ETR primarily varies with the mix of taxable profits by territory, non-deductibility of the accounting charge for Long-Term Incentive Plans and other one-off tax items. Overall, the reported profit before tax was £10.1 million (H1 FY24: £39.0 million), down 72% YoY on a like-for-like basis and down 74% on a reported basis. The reported profit after tax was £7.2 million (H1 FY24: £28.1 million), down 73% YoY on a like-for-like basis and down 74% on a reported basis. Earnings per share (EPS) The basic EPS was 5.6 pence (H1 FY24: 21.2 pence). The YoY movement is attributable to the overall trading performance, partially offset by the reduced weighted average number of shares, due to 7.8 million in shares bought back and their immediate cancellation in H1 FY25. The diluted EPS was 5.5 pence (H1 FY24: 20.8 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 and distributable reserves 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 range of 2.5x to 3.0x through the cycle. The Board has proposed to pay an interim dividend of 5.1 pence (H1 FY24: 5.1 pence) per share, amounting to £6.6 million in total and aligned with the prior year level. It will be paid on 12 December 2025 to shareholders on the register on 14 November 2025 . The Board's decision to maintain the dividend in-line with last year, reflects a considered assessment of the Group's future outlook, underpinned by a robust balance sheet and a strong track record of cash generation. It also underscores the Board's commitment to returning surplus capital to shareholders where appropriate. The Directors have determined that certain distributions, being the FY24 interim dividend paid 6 December 2024, the share buyback programme undertaken December 2024 to May 2025, and the FY24 final dividend paid 6 June 2025 (together the "Relevant Distributions"), have been made without complying fully with the technical requirements of the Companies Act 2006 (the "Act"). The Group as a whole has, at all times, had sufficient profits and other distributable reserves to pay the Relevant Distributions, however the parent company itself had insufficient distributable reserves at the time these distributions were made. A course of action, consistent with the approach taken by other listed companies that have historically encountered similar issues, is therefore being followed to remedy this position without the Company pursuing any rights that it may have to seek repayments of the relevant funds. Resolutions will be proposed to shareholders as soon as practicable, and further details will be provided in due course for approval. The Board confirms the issue only impacts the prior Relevant Distributions mentioned above, and there is no change to the financial outlook of the Company as a consequence. The matter has no impact on the Company's intentions or ability to continue returning capital to shareholders in line with its capital allocation policy. The Directors took action to remedy this technical issue by paying sufficient dividends to the Company from its subsidiaries and by preparing interim accounts (as defined in the Act) showing the requisite level of distributable reserves/net assets and filing them at Companies House. Consequently, as at the date of this announcement, the Company held distributable reserves in excess of the amount required in respect of both the Relevant Distributions and the known future committed capital returns in FY25, inclusive of the FY25 interim dividend announced today. The Company's past accounts will not need to be restated and no repayments are expected in respect of any dividends or the share buyback. Liquidity management In H1 FY25, cash generated from operations was £21.7 million (H1 FY24: £41.6 million). The decrease was primarily driven by lower EBITDA 1 due to persistent challenging market conditions. Income tax paid decreased to £5.3 million (H1 FY24: £11.4 million) in line with the trading performance across our markets. Capital expenditure reduced to £4.5 million (H1 FY24: £5.0 million) as the Group-wide Technology Improvement Programme (TIP) has reached its final stage, with all developed assets brought to active use during the period. The capital expenditure also included costs of certain leasehold improvements and furniture/IT equipment purchases across our office portfolio. The Group paid £6.9 million in rent including principal and interest portion (H1 FY24: £7.1 million). Net interest income (excluding interest on lease payments) w as £1.0 million (H1 FY 24: net interest income £1.7 million) during the period. The Group spent £20.9 million (H1 FY24: £10.0 million) on the purchase of its own shares, the majority of which related to the share buyback programme and were subsequently cancelled . Dividends payments were £6.8 million (H1 FY24 £0.5 million) comprising the FY24 interim dividend paid in December 2024. Foreign exchange had a negative impact of £0.1 million (H1 FY24: negative impact of £2.9 million). Overall, since the year end, the net cash declined to £47.8 million in H1 FY25 (FY24: £69.7 million) driven primarily by the share buyback programme. Excluding the impact of the share buyback, net cash increased £15 million since Q1 largely reflecting improved cash collection. Accessible funding The Group's capital allocation priorities are financed mainly by retained earnings and cash generated from operations. The Group also has access to a £50.0 million Revolving Credit Facility (RCF), a £30.0 million accordion facility and maintains a substantial working capital position reflecting net cash due to SThree for placements already undertaken. At the reporting date, the Group did not draw down any of the above credit facilities (H1 FY24: £nil), but any funds borrowed under the RCF would bear a minimum annual interest rate of 1.2% above the benchmark Sterling Overnight Index Average. On 31 May 2025, the Group had total accessible liquidity of £102.8 million , made up of £47.8 million in net cash (H1 FY24: £90.0 million), the £50.0 million RCF and a £5.0 million overdraft facility (undrawn at the half-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 last reviewed in July 2025: - 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. During the period, the Company returned approximately £20 million to shareholders through its share buyback programme. This resulted in the purchase and cancellation of 7.8 million ordinary shares at an average price of 257 pence per share in the first half of the year. PRINCIPAL RISKS AND UNCERTAINTIES Risk management is a key part of our business, values and culture. Effective risk management enables us to both protect the value of our business and to proactively manage threats to the delivery of strategic and operational objectives, while enhancing the realisation of opportunities. Our approach to risk management is flexible to ensure that it remains relevant at all levels of the business, and dynamic to ensure we can be responsive to changing business and macro-economic conditions. During HY25, there continues to be focus on the principal risks with oversight of activities and controls to further mitigate these risks alongside monitoring of key risk indicators to ensure any negative changes are proactively addressed. We continue to make positive progress in risk mitigation activities and continue to monitor the ongoing broader macro-economic situation and assess the impact that this could have on principal risks for the Group. The principal risks and uncertainties that the Company expects to be exposed to in the second half of FY25 are the same risks as those described in the 'Risk management' section of SThree plc Annual Report and Accounts FY24 (pages 82-89) with exception of the health and safety principal risk. Following consideration and assessment, this has been removed as a principal risk and will now be monitored through the functional and regional risk assessment process. The principal risks which have changed from FY24 year-end are detailed below. All other principal risks for the Group: Client strategy risk; Contractual liability risk; People, talent acquisition and retention risk; Regulatory compliance risk; and Strategic change management risk; remain unchanged but with positive movement on mitigating activities. Risk Mitigation Change from FY24 year end Credit Risk (Updated) SThree may suffer liquidity issues and/or financial loss due to difficulties in collecting receivables from our clients. · Monitoring of disputes and identification of root causes to resolve. · Monthly cash collection targets with daily cash collection reporting/monitoring. · Regional Engagement Framework, including monthly billing/collection meetings with regional management and finance. · Regular review of Days Sales Outstanding (DSO). Updated Commercial relationship principal risk. Risk places additional focus on the working capital requirements of the business. Macro-economic SThree suffers financial exposure as a result of rapid changes in the macro-economic environment. · Enhanced monitoring of forecasts. · Strategic focus on STEM and contract and diversification of business. · Regular tracking of sales activities. · Country strategy reviews. · Commercial and finance reviews of market conditions. Increased net risk position due to prolonged challenging macro-economic environment and political uncertainty, impacting net fees across the majority of regions and skills verticals. Industry Innovation SThree fails to keep pace with, and respond to, new disruptive business models, technology including AI, regulations, and market evolution, which adversely impacts our financial performance, competitive advantage and future growth. · Strategic planning process. · Horizon scanning including attendance at industry events. · Technology roadmap. · Innovation workshops. Net risk decreased due to review of effectiveness of controls in place. Data Privacy SThree is at risk of suffering lost revenue, reputational damage and regulatory sanctions due to regulatory non-compliance and contractual failings as it relates to its personal data protection obligations. · Data privacy framework. · Yearly mandatory data privacy training. · Data retention policy and processes. · Data Subject Access Request (DSAR) processes. Net risk increased as a result of a variety of factors, including increase in regulatory enforcement climate. Cyber Security SThree suffers a serious system or third-party disruption, loss of data or security breach that disrupts business critical activities and its ability to meet cyber/data protection obligations. · Information security framework. · Incident management process. · Yearly mandatory training. · Phishing simulation testing. · 24/7 Security Operations Monitoring. · Vulnerability Management process. Net risk has increased as a result of the more volatile and complex external cyber security threat landscape. Health and Safety SThree fails in its duty of care for the health, safety and wellbeing of their employees or placed contractor which leads to serious injury or death. · Group Health and Safety policy and global harmonised processes. · Monitoring of key risk indicators. · Regular health and safety meetings. · Incident management and insurance. · Yearly mandatory training. Removed as a principal risk following holistic assessment of HS&E obligations and risks across the business operations. Global and local policies and procedures in place; this area will continue to be carefully implements and monitored. The materialisation of our principal risks, either separately or in combination, could have an adverse effect on the implementation of our strategic priorities, our business model, financial performance, cash flows, liquidity, shareholder value and other key stakeholders. Please refer to our FY24 Annual Report and Accounts for further detail on our risks, available at www.sthree.com/en/investors/financial-results/ . DIRECTORS' RESPONSIBILITY STATEMENT The Directors confirm that to the best of their knowledge: (a) the condensed consolidated interim financial statements of the Group have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted for use in the United Kingdom and give a true and fair view of the assets, liabilities, financial position and profit or loss of the undertakings included in the consolidation as a whole for the period ended 31 May 2025 as required by the Disclosure Guidance and Transparency Rules sourcebook of the UK FCA (DTR) 4.2.4R; and (b) the half-year results announcement includes a fair review of the significant events during the six months ended 31 May 2025 and a description of the principal risks and uncertainties for the remaining six months of the financial year ending 30 November 2025 in line with the requirements of UK FCA (DTR) 4.2.7R; (c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein). The Directors of SThree plc are listed in the SThree plc Annual Report and Accounts for 30 November 2024. A list of the current Directors is maintained on the Group's website www.sthree.com . The Group's condensed consolidated interim financial statements, and related notes, were approved by the Board and authorised for issue on 28 July 2025 and were signed on its behalf by: Timo Lehne Andrew Beach Chief Executive Officer Chief Financial Officer 28 July 2025 Condensed consolidated income statement for the six months ended 31 May 2025 £'000 Note (Unaudited) Six months ended 31 May 2025 (Unaudited) Six months ended 31 May 2024 Continuing operations Revenue 2 648,822 763,404 Cost of sales (489,756) (574,661) Net fees 2 159,066 188,743 Administrative expenses 3 (148,499) (150,055) Impairment losses on financial assets (603) (987) Operating profit 9,964 37,701 Finance income 1,029 1,813 Finance costs (922) (514) Profit before income tax 10,071 39,000 Income tax expense 4 (2,870) (10,892) Profit for the period attributable to the owners of the Company 7,201 28,108 Earnings per share attributable to shareholders pence Total Group Basic 5 5.6 21.2 Diluted 5 5.5 20.8 The accompanying notes form an integral part of these condensed consolidated interim financial statements. Condensed consolidated statement of comprehensive income For the six months ended 31 May 2025 (Unaudited) (Unaudited) Six months ended Six months ended £'000 31 May 2025 31 May 2024 Profit for the period 7,201 28,108 Other comprehensi ve loss Items that may be subsequently reclassified to income statement Exchange differences on retranslation of foreign operations (2,568) (2,136) Other comprehensive loss for the period (net of tax) (2,568) (2,136) Total comprehensive income for the period attributable to owners of the Company 4,633 25,972 The accompanying notes form an integral part of these condensed consolidated interim financial statements. Condensed consolidated statement of financial position as at 31 May 2025 (Unaudited) As at 31 May 2025 (Audited) As at 30 November 2024 £'000 Note ASSETS Non-current assets Property, plant and equipment 49,708 46,217 Intangible assets 6 14,168 12,122 Deferred tax assets 2,485 3,408 Total non-current assets 66,361 61,747 Current assets Trade and other receivables 328,554 364,907 Current tax assets 480 10,315 Cash and cash equivalents 7 47,881 69,756 Total current assets 376,915 444,978 Total assets 443,276 506,725 EQUITY AND LIABILITIES Equity attributable to owners of the Company Share capital 8 1,278 1,356 Share premium 8 42,098 42,098 Other reserves (5,264) (7,195) Retained earnings 178,149 212,385 Total equity 216,261 248,644 Current liabilities Bank overdraft 7,10 102 88 Trade and other payables 178,226 198,223 Lease liabilities 9 10,289 10,419 Provisions 2,344 4,068 Current tax liabilities - 12,275 Total current liabilities 190,961 225,073 Non-current liabilities Lease liabilities 9 33,154 29,362 Provisions 2,900 2,784 Deferred tax liabilities - 862 Total non-current liabilities 36,054 33,008 Total liabilities 227,015 258,081 Total equity and liabilities 443,276 506,725 The accompanying notes form an integral part of these condensed consolidated interim financial statements . Condensed consolidated statement of changes in equity for the six months ended 31 May 2025 £'000 Notes 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 Balance as at 1 December 2024 (audited) 1,356 42,098 172 878 (7,246) (999) - 212,385 248,644 Profit for the period - - - - - - - 7,201 7,201 Other comprehensive loss for the period - - - - - (2,568) - - (2,568) Total comprehensive income for the period - - - - - (2,568) - 7,201 4,633 Dividends paid to equity holders 11 - - - - - - - (6,820) (6,820) Dividends payable to equity holders 11 - - - - - - - (11,735) (11,735) Settlement of vested tracker shares - - - - 460 - - (457) 3 Settlement of share-based payments 8 - - - - 4,645 - - (4,645) - Cancellation of shares 8 (78) - 78 20,196 - - (20,196) - Repurchase of shares 8 - - - - (20,196) - - - (20,196) Purchase of shares by Employee Benefit Trust 8 - - - - (684) - - - (684) Credit to equity for equity-settled share-based payments - - - - - - - 2,416 2,416 Total movements in equity (78) - 78 - 4,421 (2,568) - (34,236) (32,383) Balance as at 31 May 2025 (unaudited) 1,278 42,098 250 878 (2,825) (3,567) - 178,149 216,261 Balance as at 1 December 2023 (audited) 1,349 39,700 172 878 (7,939) 3,305 (13) 185,432 222,884 Profit for the period - - - - - - - 28,108 28,108 Other comprehensive loss for the period - - - - - (2,136) - - (2,136) Total comprehensive income for the period - - - - - (2,136) - 28,108 25,972 Dividends paid to equity holders 11 - - - - - - - (494) (494) Dividends payable to equity holders 11 - - - - - - - (15,366) (15,366) Settlement of vested tracker shares - - - - 51 - - (27) 24 Settlement of share-based payments 8 2 411 - - 7,080 - - (7,250) 243 Purchase of shares by Employee Benefit Trust 8 - - - - (10,000) - - - (10,000) Credit to equity for equity-settled share-based payments - - - - - - - 3,531 3,531 Total movements in equity 2 411 - - (2,869) (2,136) - 8,502 3,910 Balance as at 31 May 2024 (unaudited) 1,351 40,111 172 878 (10,808) 1,169 (13) 193,934 226,794 The accompanying notes form an integral part of these condensed consolidated interim financial statements . Condensed consolidated statement of cash flows for the six months ended 31 May 2025 £'000 (Unaudited) Six months ended 31 May 2025 (Unaudited) Six months ended 31 May 2024 Note Cash flows from operating activities Profit before tax 10,071 39,000 Adjustments for: Depreciation and amortisation charge 8,340 7,157 Loss on disposal of property, plant and equipment other than right-of-use assets 16 80 Loss on lease modification 21 - Finance income (1,029) (1,813) Finance costs 922 514 Non-cash charge for share-based payments 2,416 3,531 Operating cash flows before changes in working capital and provisions 20,757 48,469 Decrease in receivables 34,428 14,980 Decrease in payables (31,913) (20,842) Decrease in provisions (1,573) (940) Cash generated from operations 21,699 41,667 Interest received 1,029 1,813 Income tax paid - net (5,331) (11,380) Net cash generated from operating activities 17,397 32,100 Cash flows from investing activities Purchase of property, plant and equipment (2,411) (2,355) Purchase of intangible assets 6 (2,117) (2,653) Net cash used in investing activities (4,528) (5,008) Cash flows from financing activities Interest paid (922) (514) Lease principal payments 9 (5,942) (6,749) Repurchase of shares (20,196) - Proceeds from exercise of share options 8 - 412 Purchase of shares by Employee Benefit Trust 8 (684) (10,000) Dividends paid to equity holders 11 (6,820) (494) Distributions to tracker shareholders (44) - Net cash used in financing activities (34,608) (17,345) Net (decrease)/increase in cash and cash equivalents (21,739) 9,747 Cash and cash equivalents at beginning of the period 69,668 83,202 Exchange losses relating to cash and cash equivalents (150) (2,902) Net cash and cash equivalents at end of the period 7 47,779 90,047 The accompanying notes form an integral part of these condensed consolidated interim financial statements. Notes to the CONDENSED CONSOLIDATED Financial REPORT for the six months ended 31 May 2025 1. basis of preparation and Accounting policies Basis of preparation SThree plc is a public limited company listed on the London Stock Exchange, incorporated in the United Kingdom and domiciled in the United Kingdom, and registered in England and Wales. Its registered office is Level 16, 8 Bishopsgate, London, EC2N 4BQ. These condensed consolidated interim financial statements (the 'Interim Financial Report') as at and for the six months ended 31 May 2025 comprise SThree plc (the 'Company') and its subsidiaries (referred to as the 'Group'). The Group's Interim Financial Report has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted for use in the United Kingdom (UK), and the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority. It should be read in conjunction with the SThree plc Annual Report and Accounts FY24, prepared in accordance with UK-adopted International Accounting Standards and in conformity with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The Interim Financial Report does not constitute statutory accounts as defined by section 434 of the Companies Act 2006. A copy of the statutory accounts for the year ended 30 November 2024 has been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The Interim Financial Report is unaudited and has not been reviewed by the Group's external auditors. The Interim Financial Report of the Group was approved by the Board for issue on 28 July 2025. Going concern The financial information contained in this Interim Financial Report has been prepared on a going concern basis. As part of the consideration of whether to adopt the going concern basis of preparation, the Directors have reviewed the Group's financial performance in the first half of the financial year 2025 (FY25) and the Group's reforecast for FY25, as well as considered principal risks which may impact the Group's ability to generate cash from the date of approval of this Interim Financial Report to 31 July 2026. At 31 May 2025, the Group had a net cash position of £47.8 million. Credit facilities relevant to the review period comprise a committed £50.0 million RCF (with the expiry date of 26 July 2027) and an uncommitted £30.0 million accordion facility, both jointly provided by HSBC and Citibank. These facilities remained undrawn as at 31 May 2025. A further uncommitted £5.0 million bank overdraft facility is also held with HSBC, which was undrawn at the reporting date. In addition, the Group's strong balance sheet, including a substantial working capital position for placements already undertaken, and history of stable cash generation, disciplined cost control and flexible workforce management provides further protection. The Group delivered a stable net fees performance in the first half of FY25 against the backdrop of ongoing challenging market conditions. Although new business continues to be soft, extensions remain robust across our core STEM Contract service offering, providing sector-leading visibility. Our Employed Contractor Model business, which represents 48% of our Contract focus outperformed Independent Contract business, and we continue to see good opportunities in this space to leverage our global scale to deliver flexible solutions to our customers. Within Permanent, we have seen a sequential improvement, particularly in the US region. Overall, the Group has sufficient financial resources to fund its current operations. The Group is therefore well placed to manage its principal risks. After making enquiries, the Directors have formed a judgement at the time of approving this Interim Report that there is a reasonable expectation that the Group has adequate resources to continue in operation existence for the period from the date of approval of this Interim Report to 31 July 2026. Accounting policies The accounting policies used in the preparation of the condensed consolidated financial statements are consistent with those applied in the previous financial year and corresponding interim reporting period, except for the adoption of new and amended standards effective as of 1 December 2024 as set out below. New and amended standards effective in FY25 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 which became applicable as of 1 December 2024. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards. - New disclosure requirements for characteristics of supplier finance arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures) . - 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 ). New and amended standards that are applicable to the Group but not yet effective As at the date of authorisation of this Interim Financial Report, the following amendments to existing standards were in issue and endorsed by the UKEB, but not yet effective. Subject to the endorsement by the UKEB, these changes are effective for the period beginning 1 January 2025. These amendments are not expected to have a material impact on the Group in the current or future periods. - New requirements for lack of exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates ). - New requirements for presentation within the income statement (IFRS 18 Presentation and Disclosure in Financial Statements , which replaces IAS 1 Presentation of Financial Statements ). In light of the IFRS 18, which will be effective for annual reporting periods starting on or after 1 January 2027, the Group will initiate the planning process later this year. This will involve, but not be limited to, redesigning the income statement and cash flow statement, as well as re-evaluating the disclosures to be included in the notes to the financial statements. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Critical accounting judgements and key sources of estimation uncertainty The preparation of the Interim Financial Report includes the use of estimates and assumptions. Although the estimates used are based on the management's best information about current circumstances and future events and actions, actual results may differ from these estimates. In preparing this Interim Financial Report, the judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were materially the same as those applied in the Group's FY24 Annual Report and Accounts. Alternative Performance Measures (APMs) The Group presents certain measures of financial performance or financial position in the Interim Financial Report that are not defined or specified according to IFRS. These measures, referred to as APMs, are defined and reconciled to IFRS in note 16 to the condensed consolidated financial statements, and were prepared on a consistent basis for all periods presented. 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 (the 'CODM'), 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 Operating Officer, the Chief Commercial Officer, 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 Rest of the Europe 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 methods used in which they provide services to clients (independent contractors, employed contractors and permanent candidates); and - the class of candidates (candidates, who we place with our clients, represent skill-sets in Sciences, Technology, Engineering and Mathematics disciplines). The Group's management reporting and controlling systems use accounting policies that are the same as those described in these financial statements and in the Group's FY24 annual financial statements. Revenue 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 (unaudited) Cost of sales (unaudited) Net fees (unaudited) Six months ended Six months ended Six months ended £'000 31 May 2025 31 May 2024 31 May 2025 31 May 2024 31 May 2025 31 May 2024 DACH 196,151 229,962 142,963 165,765 53,188 64,197 Rest of Europe 148,662 181,709 123,001 150,398 25,661 31,311 Netherlands including Spain 143,195 175,913 111,087 134,792 32,108 41,121 USA 140,360 154,463 100,982 112,622 39,378 41,841 Middle East & Asia 20,454 21,357 11,723 11,084 8,731 10,273 648,822 763,404 489,756 574,661 159,066 188,743 Timing of revenue recognition The Group derives revenue from the transfer of services over time and at a point in time in the following geographical regions: For the six months ended 31 May 2025 (unaudited) £ '000 DACH Rest of Europe Netherlands including Spain USA Middle East & Asia Total Timing of revenue recognition Over time 185,152 147,748 139,971 135,143 14,382 622,396 At a point in time 10,999 914 3,224 5,217 6,072 26,426 196,151 148,662 143,195 140,360 20,454 648,822 For the six months ended 31 May 2024 (unaudited) £ '000 DACH Rest of Europe Netherlands including Spain USA Middle East & Asia Total Timing of revenue recognition Over time 215,014 180,691 171,249 150,515 14,341 731,810 At a point in time 14,949 1,018 4,664 3,948 7,015 31,594 229,963 181,709 175,913 154,463 21,356 763,404 Major customers In the current and prior financial period, no single customer generated more than 10% of the Group's revenue. Other information 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 (unaudited) Cost of sales (unaudited) Net fees (unaudited) Six months ended Six months ended Six months ended £'000 31 May 2025 31 May 2024 31 May 2025 31 May 2024 31 May 2025 31 May 2024 Germany 171,606 197,779 124,650 141,803 46,956 55,976 USA 140,360 154,463 100,982 112,622 39,378 41,841 Netherlands 130,985 164,176 102,414 126,687 28,571 37,489 UK 84,436 118,145 70,270 98,168 14,166 19,977 Japan 6,971 6,184 1,554 1,335 5,417 4,849 RoW (1) 114,464 122,657 89,886 94,046 24,578 28,611 648,822 763,404 489,756 574,661 159,066 188,743 (Unaudited) (Audited) As at As at £'000 31 May 2025 30 November 2024 Non-current assets UK 29,312 28,334 Germany 20,001 13,887 USA 6,149 7,553 Netherlands 4,566 4,245 Japan 1,329 1,792 RoW (1) 2,519 2,528 63,876 58,339 (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) have been included as additional disclosure to the requirements of IFRS 8 Operating segments . Revenue (unaudited) Cost of sales (unaudited) Net fees (unaudited) Six months ended Six months ended Six months ended £'000 31 May 2025 31 May 2024 31 May 2025 31 May 2024 31 May 2025 31 May 2024 Brands Progressive 260,405 282,691 197,619 212,756 62,786 69,935 Computer Futures 171,901 233,412 127,263 174,091 44,638 59,321 Huxley Associates 115,887 120,181 90,576 93,640 25,311 26,541 Real Staffing Group 100,629 127,120 74,298 94,174 26,331 32,946 648,822 763,404 489,756 574,661 159,066 188,743 Other brands, including Global Enterprise Partners, JP Gray and Madison Black, are rolled into the above brands. Revenue (unaudited) Cost of sales (unaudited) Net fees (unaudited) Six months ended Six months ended Six months ended £'000 31 May 2025 31 May 2024 31 May 2025 31 May 2024 31 May 2025 31 May 2024 Service mix Contract 622,396 731,810 488,556 573,098 133,840 158,712 Permanent 26,426 31,594 1,200 1,563 25,226 30,031 648,822 763,404 489,756 574,661 159,066 188,743 Revenue (unaudited) Cost of sales (unaudited) Net fees (unaudited) Six months ended Six months ended Six months ended £'000 31 May 2025 31 May 2024 31 May 2025 31 May 2024 31 May 2025 31 May 2024 Skills mix Technology 307,107 379,894 234,879 289,741 72,228 90,153 Engineering 196,151 214,894 147,839 160,938 48,312 53,956 Life Sciences 98,227 116,067 71,817 84,449 26,410 31,618 Other 47,337 52,549 35,221 39,533 12,116 13,016 648,822 763,404 489,756 574,661 159,066 188,743 3. administrative expenses Operating profit is stated after charging: (Unaudited) (Unaudited) Six months ended Six months ended £'000 31 May 2025 31 May 2024 Staff costs 110,245 115,691 Depreciation 7,850 7,145 Amortisation 490 12 Loss on disposal of property, plant and equipment 37 80 Service lease charges - Buildings 1,254 888 Service lease charges - Cars 1,068 407 Foreign exchange losses 540 539 4. income tax expense Income tax for the half year is accrued based on the Directors' best estimate of the average annual effective tax rate (ETR) for the financial year. The tax charge for the half year amounted to £2.9 million (H1 FY24: £10.9 million) at an ETR of 28.5% (H1 FY24: 27.9%). The Group's ETR primarily varies with the mix of taxable profits by territory, non-deductibility of the accounting charge for LTIP's and other one-off tax items. A deferred tax asset of £2.5 million (as at 30 November 2024: a net deferred tax asset £2.5 million) was recognised in the financial statements as at 31 May 2025. The deferred tax assets arise on accelerated depreciation, share based payments and provisions. The movement in the period arises primarily on share-based payments. At the reporting date, the Group had unused tax losses of £25.6 million (as at 30 November 2024: £25.6 million) available for offset against future profits. No deferred tax asset was recognised against these losses. On 17 November 2022, the UK Government confirmed its intention to implement the G20-OECD Inclusive Framework Pillar 2 rules in the UK, including a Qualified Domestic Minimum Top-Up Tax rule. This legislation, which was enacted on 11 July 2023, will seek to ensure that UK-headquartered multinational enterprises pay a minimum tax rate of 15% on UK and overseas profit for accounting periods commencing after 31 December 2023. While most jurisdictions in which the Group operates have statutory tax rates above 15% and are therefore expected to fall within the transitional safe harbour exemptions, the interim assessment performed, indicates that a top-up tax may be applicable to profits arising from the Group's operations in Ireland. The impact is not considered material in the context of the Group's overall financial position and has therefore not been recorded. No additional current or deferred tax has been recognised. The Group has applied the exception from recognising and disclosing deferred tax assets and liabilities related to Pillar 2 income taxes, in accordance with the amendments to Section 29 issued in July 2023. The safe harbour position has been analysed for each jurisdiction and we would expect all material jurisdictions to pass safe harbour tests, therefore no material impacts are expected. 5. Earnings per share Basic earnings per share (EPS) is calculated by dividing the profit for the year attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the period excluding shares held as treasury shares and those held in the Employee Benefit Trust, which for accounting purposes are treated in the same manner as shares held in the treasury reserve. Diluted EPS is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive ordinary shares...