SThree shares crash to four-year low as firm says it's been hit by 'challenging' market

SThree's shares plummeted on Thursday after the recruitment firm issued a profit warning for the current financial year, citing challenges in the science jobs market. The share price dropped by as much as 39% in early trading, making it the worst performer on the FTSE 250, before recovering slightly, as reported by . The stock is now at its lowest level in over four years.

In a trading update, SThree announced that it expects pre-tax profits of around £25m for the 2025 financial year, which began on December 1. This falls short of the £66.6m forecast by analysts.



The company will incur one-off costs of up to £7m as it seeks to offset the impact of "protracted challenging economic conditions" by implementing "further operational efficiencies". These measures are expected to yield annual cost savings of around £6m. SThree warned that "increased political and macroeconomic uncertainty, particularly in Europe" will continue to affect its net fees, which have already been impacted by weakness in new business activity throughout the 2024 financial year.

The firm, which specialises in science, technology, engineering, and mathematics (STEM), reported a 9% year-on-year decline in net fees for the financial year ending November 30. Fees were down 26% in the fourth quarter compared to the same period last year. Despite this, SThree expects its 2024 performance to be in line with expectations.

PageGroup and fellow FTSE 250 recruiter Hays saw their shares slide down, registering drops of up to four per cent and 6.9 per cent respectively, following a market update. SThree's chief executive, Timo Lehne, commented on the situation: "The nature of our business model has meant we have been able to withstand the external pressures until now," adding that, "However, the anticipated easing of market conditions has not yet materialised, with delayed decision making continuing to impact new placement activity whilst contract extensions remain robust.

" In related news, SThree has declared its plans to initiate a share buyback programme worth up to £20 million, scheduled for completion over the forthcoming six months..