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(Sharecast News) - SThree lifted its full-year profit guidance on Tuesday, pointing to the benefits of its cost optimisation programme.
The recruiter now expects full-year 2026 pre-tax profit of at least £12m, up from previous guidance of around £10m. "This outperformance primarily reflects a focus on working capital efficiencies and other one-off benefits, which are not expected to recur," it said.
In an update on trading in the third quarter, SThree said group net fees fell 2% year-on-year, an improvement on the 6% decline seen in the second quarter and the 8% drop seen in the first.
Net fees in the contract segment were broadly stable, down just 1%, which the company said reflected continued growth in the USA, growth in the Netherlands supported by a soft prior year comparative, and moderating rates of decline in Germany and the UK.
Extension activity remained resilient and new placement activity rose year-on-year, reflecting continued productivity gains supported by the new technology platform, it said.
In the permanent segment, fees fell 8%, mainly due to declines in Germany, Japan and the UAE.
Chief executive Timo Lehne said: "Our Q3 performance showed continued sequential improvement, with six of our 11 Contract markets delivering new business growth and supporting a 5% increase in our contractor order book. As contract revenue is recognised over the life of each contract, it strengthens visibility over future net fees and gives us greater confidence in the trajectory of performance. We are seeing encouraging signs of stabilisation, supported by growth in the USA and moderating declines in several markets.
"SThree's established international platform, leading positions across specialist STEM markets and the strength of our Contract business provide a strong foundation to capture long-term growth opportunities supported by structural demand for highly skilled talent."
Lehne said that while market conditions remain mixed, improving trends across the contract business and growth in the order book show the company's strategy is delivering.
"The investments we have made in technology and data leave us well positioned to capitalise on future opportunities, with promising early indications from our proprietary agentic AI capabilities," he said. "This, combined with continued productivity gains and ongoing execution of our cost optimisation programme, reinforces our confidence in our future growth prospects and in delivering FY26 profit before tax ahead of previous guidance."
At 0905 BST, the shares were flat at 304.50p.
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