SThree strikes upbeat note despite fee income slide

STEM staffing specialist SThree saw fee income fall in the third quarter as the Covid-19 pandemic continued to curtail recruitment.

Net fees for the three months to 31 August were down 14% year-on-year, at £75.7m. Within that, contract fees were off 12% at £58.0m, while fees derived from placing people in permanent jobs declined 20% to £17.7m.

The fall in net fees was also larger than the 12% decline seen in the second quarter.

However, SThree - which specialises in the science, technology, engineering and mathematics sectors - said the reduction in the rate of decline in net fees was ahead of management expectations and showed "resilience".

The contractor order book was down 15% year-on-year, following a 14% year-on-year fall in the second quarter, but ahead 1% quarter-on-quarter.

Chief executive Mark Dorman said: "There has been an improving underlying sequential performance in the business since the half year. We have seen significant uptick in general sales activity levels across most regions, improving contractor retention levels, and thus a stabilisation of the contractor order book."

SThree has yet to resume guidance going forward, however, and Dorman conceded the short-term outlook remained "uncertain", with the pandemic continuing to affect markets, clients and teams.

As at 1145 BST shares in SThree were ahead 1% at 250.0p.