SThree (LON:STEM) Announces Quarterly Earnings Results

SThree (LON:STEM) released its quarterly earnings data on Tuesday. The company reported GBX 13.70 earnings per share for the quarter, Digital Look Earnings reports. SThree had a net margin of 3.33% and a return on equity of 20.90%.

Here are the key takeaways from SThree’s conference call:

• TIP rollout complete: Completed the global TIP program across 11 countries on time and on budget (total FY spend GBP 32m below midpoint), creating a unified cloud platform that has already delivered ~GBP 6.5m of annualized cost efficiencies and early productivity gains.
• Weakened top‑line and profits: Net fees fell 12% YoY (constant currency), operating profit declined 60% to GBP 26.1m and EPS fell ~63% to GBP 13.70, although decline rates improved quarter‑on‑quarter and the US and Japan returned to growth.
• Contract business resilience and visibility: Contract work (84% of net fees) remains a strength—order book was down only 2% YoY with ~5 months of forward visibility, average contract length rose 10% to 60 weeks, and contract margins held at 21.7%.
• Shareholder returns and balance sheet: Board maintained the full‑year dividend (final GBP 9.20; full year GBP 14.30) and launched a further GBP 20m buyback, signalling confidence in cash generation and the balance sheet.
• Cost discipline vs near‑term headwinds: The group reduced headcount ~10% and delivered ~GBP 7m of FY25 efficiency savings, but operating profit was pressured by operational gearing, a GBP 4.6m rise in IT costs (no R&D claim offset) and higher professional fees and bad debt provisions; management expects TIP to drive mid‑to‑long‑term margin improvement.

SThree Stock Down 0.6%

SThree stock opened at GBX 189.84 on Thursday. The company has a 50 day moving average of GBX 177.36 and a 200-day moving average of GBX 181.54. The company has a quick ratio of 1.69, a current ratio of 1.98 and a debt-to-equity ratio of 16.03. SThree has a twelve month low of GBX 132.20 and a twelve month high of GBX 285. The stock has a market capitalization of £240.80 million, a PE ratio of 8.71, a price-to-earnings-growth ratio of 0.75 and a beta of 0.98.

Wall Street Analysts Forecast Growth

Separately, Berenberg Bank reissued a “buy” rating and issued a GBX 250 price target on shares of SThree in a report on Tuesday. Two analysts have rated the stock with a Buy rating, According to MarketBeat, SThree has a consensus rating of “Buy” and an average target price of GBX 270.

SThree Company Profile

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.