SThree (LSE:STEM), the global STEM workforce consultancy, said it now expects profit before tax for the year ending 30 November of at least £12 million, up from previous guidance of approximately £10 million given on 16 September 2025.
Group net fees fell 2% year-on-year in the third quarter, covering 1 June to 31 August, a further improvement on declines of 6% in the second quarter and 8% in the first.
The company said the profit outperformance stems primarily from working capital efficiencies and one-off benefits that are not expected to recur.
Contract net fees, 84% of the total, were down just 1%, while permanent net fees fell 8%. The contractor order book grew 5% year-on-year to £148 million, giving roughly five months of forward net fee visibility. Net cash stood at £36 million at 31 August, against £42 million a year earlier. SThree has bought back £10.5 million of shares under its £20 million buyback launched in February.
"We are seeing encouraging signs of stabilisation, supported by growth in the USA and moderating declines in several markets", said chief executive Timo Lehne.
The USA delivered double-digit growth, while Germany remained challenging, with fiscal stimulus expected to support activity progressively from 2027. Life Sciences returned to 8% growth, driven by US demand, while Technology declined 6% and Engineering fell 2%.
SThree noted the updated guidance constitutes a profit forecast under the UK Takeover Code and it is consulting with the Takeover Panel on Rule 28's application. The group will issue its next trading update on 16 December.
News Intelligence what this means for the company
SThree lifted full-year profit guidance to at least £12 million from ~£10 million, driven by narrowing net fee declines (down 2% in Q3 versus 6% in Q2 and 8% in Q1) and working capital efficiencies. The company attributes the outperformance partly to one-off benefits unlikely to repeat, but the trajectory—stabilising revenue trends, USA double-digit growth, and contractor order book expansion to £148 million—signals underlying business momentum despite persistent weakness in Technology and Engineering.
The guidance raise anchors to operational improvement rather than cost-cutting alone, though one-off items cloud the sustainability of the £12 million run-rate. Circle8 Group's pending acquisition proposal remains unresolved; this trading update constitutes a profit forecast under Takeover Code Rule 28, introducing regulatory complexity around forward guidance during a potential bid process.
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