SThree plc (STEM.L), on Tuesday, issued a trading update for the half year ended 31 May 2024 and reported a 7% decline in group net fees. Further, the company currently expects FY24 performance to be in line with market expectations.
Group net fees decreased 7% to £188.7 million from £208.6 million last year, despite the ongoing challenging backdrop and against a strong prior year performance, with Contract down 4% and now representing 84% of net fees.
The 7% downturn in net fees was driven by continued softness in new business across Contract and Permanent, partially offset by strong Contract extensions.
The Group experienced robust demand for Engineering roles in both Contract and Permanent positions, resulting in record net fees for Engineering. This growth was primarily driven by the Energy sector. The Renewables segment showed the fastest growth, increasing by 15% year over year. The performance of Life Sciences and Technology sectors continues to be influenced by prevailing market conditions and record comparatives for Technology.
Contractor order book slipped 2% YoY to £182 million, representing sector-leading visibility, the equivalent of c.4 months of net fees. Meanwhile, the company boasts a strong balance sheet with net cash of £90 million as on 31 May 2024 compared to £72 million as of 31 May 2023.
Timo Lehne, Chief Executive, said, "Against the challenges experienced by the sector, we are pleased with our trading performance over the past six months, with strong Contract extensions partially offsetting continued soft new business activity. The Group's unique business model, centred on scarce STEM skills and flexible talent solutions, continues to be a source of strength, aligned to the strategic priorities of our clients and providing sizeable growth opportunities across all our key markets. We are well placed to take full advantage when the market returns."
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