SThree is a London-listed recruiter that places engineers, scientists and technologists in 11 countries, mostly on flexible contracts. Its net fees (the fees it keeps) fell from £419m in FY23 to £323m in FY25, and annual profit before tax fell from £78m to £25.5m. In September 2026 it rejected a takeover approach from Circle8 Group; the board said the all-cash offer significantly undervalued the company.
Specialist contractors for engineering, life sciences and tech
SThree calls itself a STEM workforce consultancy. It places specialists in Engineering, Life Sciences and Technology roles for about 6,000 clients, and says it began 40 years ago as a single recruitment office in London.
Contract work makes up 85% of net fees; permanent hiring makes up 15%. Much of the contract business runs through the Employed Contractor Model, where SThree employs the contractor and handles payroll and compliance for the client. It manages about 9,000 contractors this way.
Three countries bring in 72% of net fees: the USA, Germany and the Netherlands. Japan is a smaller market the company is pushing. The contractor order book, the value of work already contracted, stood at £157m at the half year. That equals about five months of net fees. 21 Jul 2026 29 Jul 2025 27 Jan 2026
“We are now a focused, scalable, less complex and tech-enabled business with a clear operating model.” 21 Jul 2026
A record year, then a stalled hiring market
FY22 was a record, with net fees up 19%. In FY23 net fees slipped 4% to £419m and profit before tax held near £78m. Contract fees rose 1% while permanent fees fell 22%, partly because SThree chose to shift towards Contract in some markets.
In the same period it began its Technology Improvement Programme (TIP), a single order-to-cash computer platform for every country. The first version went live across the US business in late 2023. 30 Jan 2024 14 Dec 2023
New business dries up, profit shrinks
From 2024 clients kept extending existing contractors but signed few new ones. Net fees fell 9% in FY24. Germany and the USA each fell 12%, and Life Sciences fell 17%. Engineering held up, down 1%.
In December 2024 the board said it expected FY25 profit before tax of about £25m, including up to £7m of one-off costs for further efficiencies. That was the first statement of the figure. FY25 came in at £25.5m, in line with guidance.
The shares fell from 412p in August 2024 to 296p in December. SThree cut the final FY24 dividend to 9.2p from 11.6p, then held the total at 14.3p for FY25. It launched a £20m buyback in December 2024. 23 Jul 2024 12 Dec 2024 28 Jan 2025 19 Dec 2024 27 Jan 2026
Platform finished, guidance cut again
TIP reached all 11 countries by the end of FY25, on time and on budget. The cost was a squeeze on profit: FY25 operating profit fell 61% to £26m. The USA returned to growth in FY25, up 4%, while Germany fell 16% and the Netherlands 21%.
On 16 September 2025 the board guided FY26 profit before tax to about £10m, well below FY25. It committed to a further cost optimisation programme and to investing in next-generation AI. The shares ended September 2025 at 163p, against 244p in June.
Separately, directors found that earlier dividends and buybacks had not met technical Companies Act requirements. They called a shareholder vote to fix it, and said the outlook was unchanged. 27 Jan 2026 16 Sep 2025 5 Sep 2025
“the Board has decided to further invest in next generation AI to capitalise on the new opportunities emerging in our industry.” 16 Sep 2025
Sticky contractors, but weak hiring and heavy exposure to Europe
The contractor base held up better than hiring did. Clients kept extending specialists they could not easily replace, and the order book gave visibility. But new business was weak for about three years, and extensions alone could not stop fees falling.
Concentration hurt. Germany and the Netherlands fell by double digits in each period reported, and the USA only returned to growth in FY25. Cost cuts and the platform helped, but did not close the profit gap.
Management's guidance record is mixed. FY24 and FY25 results matched guidance. FY26 guidance was set far lower than FY25, then raised in September 2026. Net cash fell from £83m at the end of FY23 to £36m at Q3 FY26, after buybacks and dividends. 28 Jan 2025 27 Jan 2026 21 Jul 2026 22 Sep 2026
A stable CEO, a Board in flux and an interim finance chief
Timo Lehne is CEO and has led the TIP and the shift to Contract. He bought 26,654 shares in March 2026 at about £1.73.
The finance chief, Andrew Beach, left at the April 2026 AGM after nearly five years. Damian Fehrenberg is interim CFO. In June 2026 the board extended Chair James Bilefield's term to April 2027 so he can finish the search for a permanent CFO.
The board has turned over. Sanjeevan Bala, Paula Coughlan and Rosie Shapland joined as non-executives, and Elaine O'Donnell resigned at the end of 2025. Shapland bought 12,000 shares in March 2026. Fidelity (FIL) lifted its stake from 5% to 10.4% between March and September 2026. 17 Mar 2026 15 Jun 2026 4 Mar 2026 26 Mar 2026 26 Nov 2025
Smaller profits, an improving trend and a bid approach
In the six months to May 2026, net fees fell 7% to £148m and profit before tax was £2.7m, down from £10.1m. The result included £6.4m of one-off costs, mostly for the cost programme. The USA grew 12% and Japan also grew, while Germany fell 14% and the Netherlands 24%.
Q3 trading on 22 September showed net fees down only 2%. The board raised FY26 profit guidance to at least £12m, from the c.£10m first given on 16 September 2025. The order book was £148m.
On 9 September 2026 Circle8 Group Inc. made an unsolicited approach, and on 11 September it proposed an all-cash offer, financed without issuing new Circle8 stock. The board rejected it. Circle8 returned on 7 October with a revised proposal, and its deadline for a firm decision moved to 21 October. The terms have not been published in the filings. The shares rose from 158p at the end of June to 255.5p in July and 301p in August; the company has not said why. The latest close, on 9 October, was 309p. 21 Jul 2026 22 Sep 2026 9 Sep 2026 11 Sep 2026 7 Oct 2026
Savings in the second half, and a deadline in October
The board calls itself cautiously optimistic. It says new business is improving across more countries, the order book returned to growth in the first half, and the cost programme's savings fall mainly in the second half. The company expects at least £12m of profit before tax for FY26, and the board confirmed that forecast under the Takeover Code on 24 September.
Management expects Germany's fiscal stimulus to build gradually and flow through more meaningfully from 2027. The £20m buyback must finish by 30 November 2026; £10.5m was bought by Q3. The next trading update is on 16 December 2026.
Before that, Circle8 must either announce a firm offer or walk away by 21 October 2026. 21 Jul 2026 22 Sep 2026 24 Sep 2026 12 Feb 2026 7 Oct 2026
Written by AI from SThree's own announcements since Oct 2023 · every paragraph links to its sources