SThree (STEM) Q1 2026 TU earnings summary

Executive summary

• Q1 FY 2026 performance stabilized, with group net fees down 8% year-on-year and growth in the USA and Japan partially offsetting declines elsewhere.

• Productivity and operational efficiency improved with a 4% reduction in headcount, marking the strongest Q1 since FY 2022.

• Contract business, 83% of group net fees, declined 10% year-on-year, while permanent net fees were flat, the strongest quarterly year-on-year performance in over three years.

• New business activity and contract renewals remained broadly consistent with the prior year despite a reduced sales headcount.

• CFO Andy Beach stepping down after five years, with a transition process underway.

Financial highlights

• Group net fees for Q1 FY26 were £71.7m, down from £78.4m in Q1 FY25, an 8% year-on-year decline on a constant currency basis.

• Contractor order book at £152 million, down 7% year-on-year, providing about five months of net fees visibility.

• Net cash position of £51 million at period end, up from £45 million a year earlier.

• Share buyback program of up to £20 million launched, with £1.6 million purchased by mid-March.

Outlook and guidance

• FY 2026 performance expected to align with previous guidance of approximately £10 million profit before tax.

• Cost optimization program on track, with savings anticipated from H2 FY26 and weighted to the second half of the year.

• Visibility of around 60% of full-year market consensus net fees based on order book and year-to-date performance.

• Cautious optimism for a sustained recovery, with ongoing monitoring of macroeconomic volatility and geopolitical risks.