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SThree: Interim Results -11-

DJ SThree: Interim Results

SThree (STHR) 
SThree: Interim Results 
 
22-Jul-2019 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information according to 
REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
SThree plc 
 
("SThree" or the "Group") 
 
INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MAY 2019 
 
Encouraging first half performance 
 
FINANCIAL HIGHLIGHTS 
 
                HY 2019           HY 2018          Variance 
           Adjusted Reported Adjusted Reported Movement Constant 
                (1)               (2)            (3) 
 
                                                        Currency 
 
                                                        Movement 
                                                          (4) 
                 GBPm       GBPm       GBPm       GBPm    %        % 
Revenue       653.3    653.3    585.9    585.9   +12%     +10% 
Contract      121.1    121.1    106.7    106.7   +13%     +12% 
net fees 
(5) 
Permanent      41.9     41.9     41.7     41.7    -       -1% 
net fees 
Net fees      163.0    163.0    148.4    148.4   +10%     +9% 
Operating      24.6     23.3     20.4     18.0   +21%     +18% 
profit 
OP            15.1%    14.3%    13.7%    12.1% +1.4%pts +1.2%pts 
Conversion 
ratio (%) 
Profit         24.0     22.7     20.3     17.8   +18%     +16% 
before 
taxation 
Basic         13.5p    12.7p    11.6p    10.1p   +16%     +14% 
earnings 
per share 
Interim        5.1p     5.1p     4.7p     4.7p  +0.4p      - 
dividend 
per share 
Net debt      (8.0)    (8.0)    (6.2)    (6.2)    -        - 
(6) 
 
(1) HY 2019 figures exclude the impact of GBP1.3 million in net exceptional strategic restructuring 
costs and Senior Management change costs 
 
(2) HY 2018 figures exclude the impact of GBP2.4 million in exceptional strategic restructuring 
costs 
 
(3) Variance compares adjusted HY 2019 against adjusted HY 2018 to provide a like-for-like view 
 
(4) Variance compares adjusted HY 2019 against adjusted HY 2018 on a constant currency basis, 
whereby the prior financial year foreign exchange rates are applied to current financial year 
results to remove the impact of exchange rate fluctuations 
 
(5) Net fees were previously referred to as gross profit 
 
(6) Net debt represents cash & cash equivalents less borrowings and bank overdrafts 
 
OPERATIONAL HIGHLIGHTS 
 
· Double digit growth in net fees across three of the Group's four regions, driving 
profitability 
 
· Adjusted profit before tax up 18% YoY to GBP24.0 million (HY 2018: GBP20.3 million) 
 
· Reported profit before tax up 27% YoY to GBP22.7 million (HY 2018: GBP17.8 million) 
 
· 86% of net fees generated from our international business (HY 2018: 82%) 
 
· Strategic focus on Contract continuing to drive growth 
 
· Contract represented 74% of Group net fees (HY 2018: 72%) 
 
· Contract ahead by 12%* YoY, with strong growth across Energy, Engineering and Technology 
 
· Permanent net fees down 1%* YoY, with good growth in DACH (Germany, Austria & Switzerland) 
and Japan offset by declines in UK&I and USA 
 
· Investment in the Group delivering returns 
 
· Group period-end sales headcount up 12% YoY. Average sales headcount up 7% YoY 
 
· The expected benefits are being realised from the successful restructure and relocation of 
the majority of our London-based support functions to Glasgow 
 
· Interim dividend of 5.1p up 0.4p (HY 2018: 4.7p) 
 
* Variances are held in constant currency 
 
Mark Dorman, CEO, commented: "This set of results, the first since I joined the Group, 
demonstrates that our strategy is putting SThree ahead of the field. The engine room of our growth 
has continued to be the key strategic focus areas of our business - progress within the key STEM 
markets, particularly the USA and Continental Europe, as well as an increased Contract weighting. 
 
"Alongside our teams having capitalised on these major structural trends, it has been pleasing to 
note a number of other highlights for the Group. Our small but rapidly growing Permanent business 
in Japan, the strong performance for Energy in the US driven by trends to renewable energy and 
power transmission, and the strengthening of our market leading position in Life Sciences, where 
we continue to benefit from the emergence of new sector technology and data analytics. 
 
"To build on this growth, we are continuing to strategically invest in the areas of the business 
which present the greatest opportunity, consistent with our vision to be the number one STEM 
talent provider in the best STEM markets. With the scale of the opportunity available to us, we 
look forward to continuing to execute in the period ahead. 
 
"Notwithstanding the macro-economic backdrop in certain regions, the Group remains well positioned 
as we enter the second half, and the Board's expectations for the full year remain unchanged." 
 
SThree will host a presentation and conference call for analysts at 0930 GMT today. The conference 
call participant telephone details are as follows: 
 
Dial in: 0800 358 9473 
 
Call passcode: 35582282# 
 
This event will also be simultaneously audio webcast, at https://plcwebcast.uk/sthreeh1july19 [1]. 
Please note that this is a listen only facility. An archive of the presentation will be available 
via the same link following the event. 
 
A video overview of the results from the CEO, Mark Dorman, and CFO, Alex Smith, is available to 
watch here: http://bit.ly/STHRh1interview [2]. 
 
SThree will issue its Q3 trading update on 13 September 2019. 
 
Enquiries: 
 
SThree plc 020 7268 6000 
 
Mark Dorman, Chief Executive Officer 
 
Alex Smith, Chief Financial Officer 
 
Kirsty Mulholland, Company Secretariat 
 
Alma PR 020 3405 0205 
 
Rebecca Sanders-Hewett SThree@almapr.co.uk 
 
Hilary Buchanan 
 
Notes to editors 
 
SThree is a leading international STEM (Science, Technology, Engineering and Mathematics) 
recruitment company. It brings skilled people together to build the future through the provision 
of specialist Contract and Permanent services to a diverse client base of over 9,000 clients. From 
its well-established position as a major player in the Technology sector, the Group has broadened 
the base of its operations to include businesses serving the Banking & Finance, Energy, 
Engineering and Life Sciences sectors. 
 
Since launching its original business, Computer Futures, in 1986, the Group has adopted a 
multi-brand strategy, establishing new operations to address growth opportunities. SThree brands 
include Progressive, Computer Futures, Huxley Associates and Real Staffing Group. The Group has 
circa 3,100 employees in sixteen countries. 
 
SThree plc is quoted on the Official List of the UK Listing Authority under the ticker symbol STHR 
and also has a USA level one ADR facility, symbol SERTY. 
 
Important notice 
 
Certain statements in this announcement are forward looking statements. By their nature, 
forward-looking statements involve a number of risks, uncertainties or assumptions that could 
cause actual results or events to differ materially from those expressed or implied by those 
statements. Forward-looking statements regarding past trends or activities should not be taken as 
representation that such trends or activities will continue in the future. Data from the 
announcement is sourced from unaudited internal management information. Accordingly, undue 
reliance should not be placed on forward looking statements. 
 
INTERIM MANAGEMENT REPORT 
 
Chief Executive Officer's Review 
 
Introduction 
 
At this, my first set of interim results as CEO of SThree, I am pleased to say that my time with 
the business so far has reinforced my confidence in the three core strengths of SThree that 
initially attracted me to the Group; our purpose, the strong structural growth drivers in our 
markets, and the high quality of our people. 
 
The clear benefits of our model and the structural growth drivers in our markets have shaped the 
encouraging results we are reporting today. It is a great demonstration that the Group's focus on 
STEM and Contract is delivering effectively. Particular highlights include Group net fees up 9%* 
year on year, double-digit growth across three of our four regions, and Contract, our strategic 
focus, delivering 12%* growth in the first half and now representing 74% of Group net fees. 
 
Our purpose 
 
Our purpose is central to everything we do as a business and is why we exist, "to bring skilled 
people together to build the future". Our work is aimed at changing people's lives for the better 
and this is something that motivates my colleagues and I on a daily basis. As market trends shift 
and STEM skills become ever more prevalent, we are helping build communities of talent and 
future-proof people's careers while providing our customers with their most valuable asset. 
 
Market drivers 
 
I have spent my time since March immersing myself in the business and it is apparent that we are a 
truly unique recruitment business, working in high growth markets with long-term structural 
drivers of growth. The scale of opportunity in STEM globally is enormous, with the fourth 
industrial revolution fuelling an ever-increasing demand for STEM workers across all verticals. In 
the USA, according to the US Bureau of Labor Statistics, all STEM occupations are projected to 
grow by 10.8% between 2016 and 2026 (compared to projected growth of 7.2% for non-STEM 
occupations). A recent survey of 25,000 businesses in Germany by The Association of German 
Chambers of Commerce and Industry cited the shortage of skilled workers as their greatest risk, 
while a study by Bertelsmann predicts that the demand for STEM experts in Germany will grow by 1.4 
million by 2035. 
 
Alongside this, the way we work is structurally shifting, with the 'gig' economy, flexible ways of 
working, and the changing role of contractors becoming increasingly important. This is closely 
tied into highly skilled roles, which underpin the STEM markets. 
 

(MORE TO FOLLOW) Dow Jones Newswires

July 22, 2019 02:02 ET (06:02 GMT)

DJ SThree: Interim Results -2-

Within our verticals, the thematic trends we all read about - renewable energies, genetic editing, 
Artificial Intelligence ("AI"), cyber security, the Internet of Things ("IoT") - are examples of 
the key societal movements driving growth across our diversified portfolio of sectors. For their 
implementation, these trends all require people that are hard to find, have specialist skills, or 
are brand new roles that were not in existence previously. In times like this, there is even more 
value in our niche market approach and knowledge base. 
 
2019 has seen us continue to focus on the value we provide to our customers in terms of providing 
specialist support, a key competitive advantage and a significant barrier to entry for the Group. 
As an example, in the UK we have actively shared our knowledge on IR35 reform as our stakeholders 
within the private sector gear up for the tax changes in April. Doing nothing is not an option for 
organisations that rely upon flexible workers and as the leading provider of specialist STEM 
talent, we have provided support and material to help our contractors and clients understand how 
to remain both compliant and commercially attractive. Further to this, we have actively fed into 
the ongoing UK Government Consultation. 
 
Our People 
 
We believe people are the most important asset to any business. SThree is no different and 
investing in our teams is critical in delivering our growth plans. We increased average Group 
sales headcount in the period, predominantly in Contract, in line with our strategic focus. Our 
people are high performing and driven, and I would like to take this opportunity to thank them for 
their hard work and passion throughout the period. 
 
For the second year in a row, the German SThree team was awarded the 'Top Employer' certification 
in the overall midsized employers' category by the Top Employers Institute. This marks SThree 
being named amongst Germany's top midsized employers for the sixth consecutive year in a row, 
which shows how well our own people rate our unique offering when it comes to excellent working 
conditions and talent strategy. 
 
Testament to the strength of delivery across the business is our excellent Net Promoter Score 
("NPS"), from both clients and candidates, which since the year-end has increased from 42 to 46, 
and shows our customers' willingness to recommend our services to others. It is clear that both 
clients and candidates value our teams' ability to understand the specialty of the roles we work 
to fill and also the specialist expertise our teams have - how to deliver the right result within 
a given process. 
 
Investing for the future 
 
Building for the future is important to us, and we are investing in the areas that will drive 
growth. 
 
A key strategic focus is our investment in technology to help drive both growth and efficiencies; 
we believe our ability to harness actionable data insights and use of technology will continue to 
be a competitive differentiator going forward. Part of our strategy involves our ongoing 
investment in data to allow us to further analyse not just current but emerging trends, giving us 
unique insights into our markets and helping us to identify the best current and future business 
opportunities. In addition, we are investing in solutions and technologies, which make our offer 
both more compelling and more efficient - for SThree, for our customers and for candidates. We 
will continue to review which investments are likely to deliver the right returns within our 
buy/build/rent structure. 
 
We will also continue to invest in our people and infrastructure, realising benefits for the 
Group. An example of this is our relocation to Glasgow and the creation of a Centre of Excellence, 
which is already delivering the benefits that we were expecting; we will continue to invest in 
this Centre to improve efficiency throughout the business. 
 
Regional performance 
 
Our diversity across geographies and STEM sectors provides growth and resilience for the Group; 
the Group now derives 86% of its revenue from our international business. Our largest region, 
Continental Europe, continued to grow well, alongside USA. Both of these regions have benefitted 
not only from capitalising on the wealth of opportunity available in their markets brought about 
by growing demand, but also from the strong delivery from our teams and strategic initiatives that 
have been put in place. 
 
We have identified and focused on those areas of the business that need refinement. For example, 
in the UK, we are spending time driving and resourcing the specific areas of skills and industry 
sectors where we have the opportunity to get the best returns. We are in the process of 
capitalising on the insight we have into the market dynamics and focusing on allocating resources 
accordingly. Whilst these areas are a work in progress, we are confident in the ability of our 
teams to deliver growth. Ultimately, our focus is on execution across the business, based on 
informed and data-driven detail. We have plans in place to drive growth across all areas of the 
Group. 
 
Outlook 
 
Overall, we are pleased with trading in the first half of the year, driven by our strategy to 
focus on STEM and Contract, our global market exposure and the entrepreneurial spirit of our 
dedicated colleagues. We will be building on this strategy, driving execution through detailed 
operational plans, in the period ahead. Notwithstanding the macro-economic backdrop of certain 
regions, the Group remains well positioned for the second half, and the Board's expectations for 
the full year remain unchanged. 
 
HY 2019 Group trading performance 
 
Overview 
 
We are encouraged by our first half performance with net fees up 9%*, and strong growth achieved 
in Q2, also up 9%* YoY. The growing breadth and scale of our international operations, which now 
account for 86% of net fees, underline how far the Group has grown from its UK roots. Whilst 
broader market conditions are weakening in some parts of Continental Europe, the STEM markets 
remain buoyant and we are confident we can maximise our opportunities with selective headcount 
growth. The USA, our second largest market, continues to be robust. We are actively managing our 
business in the UK, where broader macro pressures remain significant. 
 
Our strategic focus on Contract continues to deliver good growth across our key sectors and 
regions, as well as providing greater resilience in more uncertain economic conditions. Contract 
net fees were up 12%* in H1 YoY and up 13%* in Q2, with Continental Europe, USA and Asia Pacific & 
Middle East ('APAC & ME') delivering double digit growth. Our focus in H2 is to prioritise 
investment in Contract in our fastest growing markets. 
 
Permanent net fees were down 1%* in H1 YoY and down 2%* in Q2, driven by declines in UK&I and USA, 
both reflecting previous strategic decisions which we anticipate will drive positive change going 
forwards. We saw strong growth in DACH and our small, fast-growing business in Japan. 
 
Adjusted Operating Profit was up 18%* YoY and we are well positioned for the second half as our 
investment in headcount continues to mature and we benefit from a strong Contractor book. 
 
The expected benefits are being realised from the successful restructure and relocation of the 
majority of our London-based support functions to Glasgow. 
 
Our investment in headcount, the quality of our management and increasing expertise in our niche 
markets alongside the strategic relocation and restructure of our support functions are all 
driving us forward on our journey to become the number one STEM talent provider in the best STEM 
markets. We are making good progress against the five-year growth strategy outlined at the Capital 
Markets Day in November 2017. 
 
Group 
 
           Net fees                          Average Sales 
                                               Headcount 
         Growth* YoY        HY 2019 Mix        Growth YoY 
      Cont    Perm   Total   Cont   Perm    Cont    Perm  Total 
 Q1   +12%     +1%     +9%                   +8%     -4%    +4% 
 19 
 Q2   +13%     -2%     +9%                  +13%     +5%   +10% 
 19 
 HY   +12%     -1%     +9%    74%    26%    +11%       -    +7% 
 19 
 
* Variances are held in constant currency 
 
Breakdown of net fees  HY 2019 HY 2018 FY 2018 
Geographical Split 
Continental Europe         58%     56%     57% 
USA                        22%     20%     21% 
UK&I                       14%     18%     17% 
Asia Pac & Middle East      6%      6%      5% 
                          100%    100%    100% 
 
Sector Split 
Technology                 45%     45%     44% 
Life Sciences              19%     20%     20% 
Banking & Finance          12%     13%     13% 
Energy                     11%      9%     10% 
Engineering                10%     10%     10% 
Other Sectors               3%      3%      3% 
                          100%    100%    100% 
 
Operating Review 
 
Business Mix 
 
Contract is well suited to our STEM market focus and geographical mix and it remained the key area 
of focus and growth throughout the period. 
 
Our Contract business has continued to go from strength to strength with increasing net fees and 
average headcount up 11% YoY. Q2 was the 22nd consecutive quarter of net fees growth achieved by 
Contract since it was given greater strategic focus. The period ended with contractor numbers of 
10,749, up 4% YoY. 
 
Permanent net fees were marginally lower with UK&I and USA net fees declining, reflecting the 
previously reported UK restructuring and the leadership and strategic changes that we made in the 
USA last year. Average sales headcount in our Permanent business remained flat. We have seen 
strong growth in our largest Permanent region, DACH, up 9%*. Japan, our small but fast growing 
business continues to perform strongly as we look to invest in this business further. 
 
Average Permanent fees were up 1%* YoY as we focus on specialist recruitment. We expect to 

(MORE TO FOLLOW) Dow Jones Newswires

July 22, 2019 02:02 ET (06:02 GMT)

DJ SThree: Interim Results -3-

strategically invest in Permanent in the remainder of 2019, predominantly in USA, DACH and Japan. 
 
Regional Growth 
 
We have seen strong growth in Contract across most regions. 86% of the Group net fees are now 
generated from outside the UK&I with our largest regions growing well. 
 
Continental Europe (58% of Group net fees) 
 
           Net fees                          Average Sales 
                                               Headcount 
         Growth* YoY        HY 2019 Mix        Growth YoY 
      Cont    Perm   Total   Cont   Perm    Cont    Perm  Total 
 Q1   +14%     +6%    +12%                  +12%       -    +8% 
 19 
 Q2   +17%     +5%    +14%                  +13%     +4%   +10% 
 19 
 HY   +16%     +5%    +13%    74%    26%    +13%     +2%    +9% 
 19 
 
* Variances are held in constant currency 
 
Continental Europe is our largest region comprising businesses in Germany, Switzerland, Austria, 
Netherlands, Belgium, France, Luxembourg and Spain. 
 
The region delivered strong growth in the period with increasing net fees across all main country 
markets. DACH, our largest territory in the region was up 15%* YoY and we continued to invest with 
average headcount up 8%. Netherlands also performed strongly, with net fees ahead by 11%* YoY and 
average sales headcount up 15%. Contract growth in Technology, our largest sector, was very 
strong, up 19%*. This was supported by Engineering, which grew 40%*. 
 
The region delivered double digit growth in contractors, up 12% YoY, creating growth opportunities 
for H2, with Net Fees per Day Rate ('NFDR') up by 1%*. Net fees in this region performed 
particularly well against very strong prior year comparatives. 
 
Growth was also delivered in Permanent, driven by DACH up 9%*. This was in part down to an 
increase in average fees for Technology, Banking and Finance alongside Energy. 
 
USA (22% of Group net fees) 
 
           Net fees                          Average Sales 
                                               Headcount 
         Growth* YoY        HY 2019 Mix        Growth YoY 
      Cont    Perm   Total   Cont   Perm    Cont    Perm  Total 
 Q1   +24%     -1%    +17%                   +7%     -3%    +4% 
 19 
 Q2   +21%    -15%    +10%                  +11%    +14%   +12% 
 19 
 HY   +22%    -10%    +13%    78%    22%     +9%     +5%    +8% 
 19 
 
* Variances are held in constant currency 
 
The USA is the world's largest specialist STEM staffing market and is our second largest region. 
We continue to see further opportunities for growth in all our markets as STEM roles in the region 
continue to be highly sought after and are projected to grow by 10.8% between 2016 and 2026. 
 
Growth of 13%* YOY in the region was across our major sectors Technology, Life Sciences and 
Energy. Life Sciences, our largest sector in the region, grew 10%* YoY. Energy continued to 
improve in the region up 68%* with Technology up 10%*. 
 
Contract net fees in USA were very strong up 22%* YoY with double-digit growth across all sectors 
except Banking & Finance which declined in line with global trends. Energy performance was very 
pleasing, with net fees up 73%* YoY as we continue to develop our customer portfolio, build on our 
strong position in renewable energy, power transmission and upstream alongside broadening our 
service offering. We have invested in our Contract business with average sales headcount growing 
9% YoY. Net Fees per Day Rate ('NFDR') increased by 28%* YoY, as we focused on higher margin and 
higher salary roles. 
 
Permanent net fees declined 10%* YoY, largely due to the following previously announced leadership 
and strategic changes made to the division. These changes were implemented to create a platform 
for more consistent and balanced growth and we are confident we have made the right strategic 
decisions for the region. We expect the positive impact of these changes to be seen in performance 
during H2 2019 and beyond. Despite this it is encouraging to note that average fees in the region 
were up 6%* YoY with all sectors experiencing growth. Year to date average headcount also 
increased by 5% YoY. 
 
UK&I (14% of Group net fees) 
 
           Net fees                          Average Sales 
                                               Headcount 
         Growth* YoY        HY 2019 Mix        Growth YoY 
      Cont    Perm   Total   Cont   Perm    Cont    Perm  Total 
 Q1    -5%    -16%     -7%                     -    -29%    -8% 
 19 
 Q2    -7%    -32%    -12%                  +12%    -12%    +5% 
 19 
 HY    -6%    -25%     -9%    84%    16%     +6%    -22%    -2% 
 19 
 
* Variances are held in constant currency 
 
The UK&I is one of our smaller regions, however it remains an important part of our business. 
Following the previously reported restructuring, net fees in the region were down 9%* YoY, with a 
2% YoY reduction in average headcount. We have put significant work into stabilising the region, 
the benefits of which are beginning to show. 
 
In line with the broader Group strategy, the region is increasingly Contract focused as we have 
cautiously invested in specific opportunities within the STEM market. Following a recently 
increased focus, we saw growth in Life Sciences, however this was offset by decline in all other 
sectors. Overall our Contract business saw a decline in performance with net fees down 6%* YoY. 
Demonstrating our continued commitment to UK&I over the first half we made the decision to 
strategically invest in our Contract business with average sales headcount up 6% YoY. We 
anticipate this headcount will become productive in the second half of the year. Contractors for 
the region were down 4% YoY, however we saw our NFDR up 1%*, reflecting the increasingly targeted 
approach of the UK&I business. 
 
Reflecting continued macro-economic and political uncertainty, Permanent net fees declined 25%* 
YoY. As part of the region's recent restructuring, we significantly reduced our headcount in our 
Permanent division towards the end of H1 2018 and as a result our average sales headcount was down 
22% YoY. Our move to a specialist hub and onshore delivery model is now in place and we will 
continue to cautiously build our presence in key sectors to maximise opportunity. 
 
APAC & ME (6% of Group net fees) 
 
           Net fees                          Average Sales 
                                               Headcount 
         Growth* YoY        HY 2019 Mix        Growth YoY 
      Cont    Perm   Total   Cont   Perm    Cont    Perm  Total 
 Q1   +16%     -3%     +5%                  +11%    +21%   +17% 
 19 
 Q2   +14%    +26%    +20%                  +20%    +20%   +20% 
 19 
 HY   +15%    +11%    +13%    43%    57%    +15%    +21%   +18% 
 19 
 
* Variances are held in constant currency 
 
Our APAC & ME business principally includes Japan, Australia, Singapore and Dubai. APAC & ME 
represented 6% of Group net fees, a slight increase from 5% at the end of 2018. 
 
Contract performance was strong in the period, led by our Dubai business, up 42%*, with growth in 
Banking & Finance and Energy sectors. Contractors grew 4% YoY in the region, with NFDR down 2%* 
YoY. 
 
Growth in Permanent net fees in the region was primarily driven by Japan, which was up 49%* YoY, 
with strong growth in Life Sciences and Technology. We invested in Permanent headcount in Japan 
where average sales headcount was up 65%. 
 
Average headcount was up 18% YoY with Contract up 15% YoY and Permanent up 21% YoY. 
 
We will focus on our investment in the Japan Permanent and Dubai Contract businesses in the second 
half with the rest of the region managed to maximise profitability. 
 
Sector Highlights 
 
The Group saw good growth across four of our five sectors in the period. Technology, our largest 
sector, Engineering and Energy experienced strong growth in the period. Our second largest sector, 
Life Sciences, also saw robust growth. 
 
Technology (45% of Group net fees) 
 
           Net fees                          Average Sales 
                                               Headcount 
         Growth* YoY        HY 2019 Mix        Growth YoY 
      Cont    Perm   Total   Cont   Perm    Cont    Perm  Total 
 Q1    +9%    +11%    +10%                   +9%     +3%    +8% 
 19 
 Q2   +13%     +7%    +12%                  +15%    +11%   +14% 
 19 
 HY   +11%     +9%    +11%    75%    25%    +12%     +7%   +11% 
 19 
 
* Variances are held in constant currency 
 
Technology is our largest and most established sector representing, 45% of the Group net fees and 
48% of the Group average sales headcount, with the majority of its business in the more mature 
UK&I and European markets. Net fees for the period were up with growth across both Contract and 
Permanent divisions. The sector has delivered 21 consecutive quarters of growth. The rate of 
growth was impacted by the relatively soft performance of Technology in the UK&I, however all 
other regions were in double digit growth. Contractors for the sector have increased by 10% YoY, 
with particularly strong growth noted across Continental Europe. Average headcount in Technology 
was up 11% YoY, with Contract growing 12% YoY and Permanent up 7% YoY. The mix in headcount is 
weighted towards Contract which accounts for 71% of total Technology headcount. 
 
Life Sciences (19% of Group net fees) 
 
           Net fees                           Average Sales 
                                                Headcount 
         Growth* YoY        HY 2019 Mix         Growth YoY 
       Cont  Perm    Total   Cont    Perm   Cont   Perm    Total 
 Q1  +6%   -3%     +3%                   -1%   -11%      -5% 
 19 
 Q2 +11%   +3%     +8%                   +3%    +2%      +3% 
 19 
 HY  +8%     -     +6%     69%    31%    +1%    -5%      -1% 
 19 
 
* Variances are held in constant currency 
 
Our Life Sciences sector is a market leader across several of our regions and Life Sciences 
represented 19% of Group net fees in the period. Total net fees grew by 6%* YoY with Contract 
growing 8%* YoY and Permanent remaining flat*. Contract performance was pleasing and was up across 

(MORE TO FOLLOW) Dow Jones Newswires

July 22, 2019 02:02 ET (06:02 GMT)

DJ SThree: Interim Results -4-

all regions. Contractors increased 7% YoY with NFDR up 1%* YoY. Average sales headcount was down 
1% YoY, with Contract up 1% and Permanent declining 5%. The emergence of new technology and data 
analytics in this sector is enhancing the ability of our highly skilled people to find the best 
candidates to support the business and capitalise on the market opportunity. 
 
Banking & Finance (12% of Group net fees) 
 
            Net fees                         Average Sales 
                                               Headcount 
           Growth* YoY         HY 2019      Growth YoY 
                                 Mix 
     Cont    Perm   Total  Con    Perm   Cont     Perm   Total 
                            t 
 Q1  -6%    +1%     -3%                  +7%     -1%      +3% 
 19 
 Q2 -12%   -16%    -13%                  +1%       -        - 
 19 
 HY  -9%    -8%     -9%     58%  42%     +4%       -      +2% 
 19 
 
* Variances are held in constant currency 
 
Banking & Finance net fees were down 9%* YoY with Contract down 9%* and Permanent down 8%*. In 
line with broader trends, Banking & Finance was our only sector in decline and we saw mixed 
results across our regions. We saw good growth coming out of our DACH business, which was up 24%*. 
There was growth in our new Japan business, up 30%* along with Dubai, up 29%*. The UK&I business 
performance continues to be impacted by broader political uncertainty. Average headcount for the 
sector was up 2% YoY. 
 
Energy (11% of Group net fees) 
 
           Net fees                          Average Sales 
                                               Headcount 
         Growth* YoY        HY 2019 Mix        Growth YoY 
      Cont    Perm   Total   Cont   Perm    Cont    Perm  Total 
 Q1   +26%     -4%    +25%                   +1%    +28%    +2% 
 19 
 Q2   +30%    +20%    +29%                  +10%    +67%   +13% 
 19 
 HY   +28%    +10%    +27%    95%     5%     +6%    +47%    +8% 
 19 
 
* Variances are held in constant currency 
 
Energy represented 11% of our overall Group net fees and the sector has shown good growth. Net 
fees in the sector were up 27%* YoY. Contract which represents 95% of our Energy net fees grew 
28%* YoY. We continue to support our Contract business with headcount up 6% YoY. Contractors in 
the sector declined 9% YoY, however NFDR showed strong growth, up 18%* YoY driven by the USA which 
successfully repositioned to placing more niche roles within power transmission and renewables. 
Continental Europe and USA account for 85% of our total net fees in the sector - USA saw growth of 
68%* YoY with Continental Europe remaining flat*. Our Dubai business grew by 9%* YoY. Average 
sales headcount was up 8% YoY and we will continue to review the Energy business and selectively 
invest where we can maximise market opportunities. 
 
Engineering (10% of Group net fees) 
 
           Net fees                          Average Sales 
                                               Headcount 
         Growth* YoY        HY 2019 Mix        Growth YoY 
      Cont    Perm   Total   Cont   Perm    Cont    Perm  Total 
 Q1   +39%    -17%    +19%                  +28%     +1%   +19% 
 19 
 Q2   +18%    -17%     +9%                  +40%     +6%   +28% 
 19 
 HY   +27%    -17%    +14%    78%    22%    +34%     +3%   +23% 
 19 
 
* Variances are held in constant currency 
 
Engineering represented 10% of Group net fees and grew strongly, with net fees up by 14%* YoY. The 
sector is heavily weighted towards Contract, which accounted for 78% of net fees. Growth in 
Contract net fees was very pleasing up 27%* YoY. Continental Europe is our largest region in the 
Engineering sector and we saw good overall growth of 25%* YoY. Contractors are up 16% YoY with 
NFDR up 6%*. Average sales headcount was up 23% YoY with Contract up 34% YoY and Permanent up 3% 
YoY. 
 
CHIEF FINANCIAL OFFICER'S REVIEW 
 
Operating profit 
 
 Revenue for the year was up 10% on a constant currency basis to GBP653.3 million (HY 2018: reported 
 GBP585.9 million) and up 12% on a reported basis. On a constant currency basis, net fees increased 
  by 9%, and on a reported basis by 10% to GBP163.0 million (HY 2018 GBP148.4 million). Growth in 
revenue exceeded the growth in net fees as the business continued to shift towards Contract. 
Contract represented 74% of the Group net fees in the period (HY 2018: 72%). This change in mix 
resulted in a modest decrease in the overall net fees margin to 24.9% (HY 2018: 25.3%), as 
Permanent revenue has no cost of sale, whereas the cost of paying the contractor is deducted to 
derive Contract net fees. The Contract margin increased slightly to 19.8% (HY 2018: 19.6%). 
 
 The reported profit before tax was GBP22.7 million, up 27%. The adjusted profit before tax ('PBT') 
   was GBP24.0 million up 18% YoY (HY 2018: reported GBP17.8 million and adjusted GBP20.3 million). The 
 'adjusted' PBT excludes restructuring costs of GBP1.3 million that were incurred in the current 
period in respect of the Senior Management changes and relocation of support functions to Glasgow 
 (HY 2018: GBP2.4 million). The benefits of operational efficiencies delivered by the restructuring 
of our support functions contributed to the increase in the operating profit conversion ratio of 
1.4 percentage points to 15.1% on an adjusted basis and 2.2 percentage points to 14.3% on a 
reported basis (HY 2018: adjusted 13.7% and reported 12.1%). 
 
Restructuring costs ('Adjusting items') 
 
The expected benefits are being realised from the successful restructure and relocation of the 
majority of our London-based support functions to Glasgow. This restructuring is anticipated to 
 realise cost savings in excess of GBP5 million per annum. 
 
 Only immaterial net exceptional costs of GBP0.1 million have been recognised during the period in 
relation to the transition to the Centre of Excellence. The exceptional charge in the period 
included mainly personnel double-running costs of GBP0.2 million and property costs of GBP0.3 million. 
 These costs were subsequently offset by the government grant income of GBP0.4 million recognised as 
an offset to the exceptional costs of an agreed percentage of gross wages for each full time role 
 created in the Centre of Excellence, bringing the total net costs recognised to date to GBP13.2 
 million (HY 2018: GBP9.2 million). 
 
We do not expect to incur any further exceptional costs in the remainder of the year in respect of 
the move to Glasgow whilst the additional government grant is anticipated to be received and 
recognised as exceptional income in the period through to the end of 2021. 
 
On 14 December 2018, the Group communicated to the market that the Chief Executive Officer, Gary 
Elden, would step down from his role and the Board on 18 March 2019. The new Chief Executive 
Officer ('CEO'), Mark Dorman, joined the Group on 18 March 2019. The new CEO was appointed 
following Gary Elden stepping down from the role after leading the Company for six years. Mark was 
appointed after a rigorous process determined he was the best candidate to take the business 
forward to its next stage of growth and development. These Senior Management changes resulted in 
 the exceptional charge of GBP1.2 million in HY 2019. The total charge comprised contractual 
payments, recruitment and other professional fees, double running costs and relocation costs. 
 
The non-recurring nature of these strategic projects continues to be of sufficient magnitude to 
warrant separate disclosure as an exceptional item on the face of the Consolidated Income 
Statement, in line with our accounting policies. Disclosure of items as exceptional highlights 
them and provides a clearer, comparable view of underlying earnings. 
 
A reconciliation of profit before tax on an adjusted basis to reported basis 
 
                                       HY 2019  HY 2018 Variance 
                                            GBPm       GBPm       GBPm 
Reported profit before tax after          22.7     17.9      4.8 
exceptional items 
Net exceptional costs - charged to         1.3      2.4    (1.1) 
operating profit 
(i) Senior Management changes              1.2        -      1.2 
(ii) Support functions relocation          0.1      2.4    (2.3) 
 
Reported profit before tax and            24.0     20.3      3.7 
exceptional items ('Adjusted') 
 
Accounting changes 
 
On 1 December 2018 IFRS 9 Financial Instruments ('IFRS 9') and IFRS 15 Revenue from Contracts with 
Customers ('IFRS 15') became effective for the Group. We changed our accounting policies and made 
retrospective adjustments accordingly. 
 
IFRS 9 introduced new requirements for classification, recognition and impairment of financial 
assets. 
 
Overall, IFRS 9 had an immaterial impact on the Group. On the date of initial application of the 
standard, no adjustments were made to the opening balance of retained earnings or other reserves. 
In line with the transitional provisions in IFRS 9, comparative figures have not been restated. 
From 1 December 2018, the Group presents changes in the fair value of all its equity investments 
in other comprehensive income, as these instruments are held for long-term strategic purposes. 
Certain investments in convertible bonds with the embedded conversion rights were reclassified 
from 'available-for-sale' to 'financial assets held at fair value through profit or loss'. There 
were no changes to the Group's existing impairment methodology for trade receivables. 
 
IFRS 15, a new revenue recognition standard effective for the Group from 1 December 2018, was 
adopted on the modified retrospective basis without restatement of comparatives. IFRS 15 permits 
the recognition of contingent consideration provided that it is highly probable that a significant 
reversal in the amount of cumulative revenue recognised will not occur when the uncertainty 
associated with the contingent consideration is subsequently resolved. Historically, the Group's 
policy of estimating Contract accrued income resulted in certain amount of revenue being reversed. 

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Accordingly, on 1 December 2018 the Group revised the way the Contract accrual income is 
 estimated. This change resulted in a net (post-tax) adjustment of GBP2.4 million that reduced the 
opening balance of retained earnings on the date of initial application of IFRS 15. 
 
Further details are provided in note 1 to the Consolidated Interim Financial Report. 
 
Investments 
 
During the period, we continued to invest in in-house innovation initiatives, expensing a total of 
 GBP1.0 million on our 'build' programme. We have reprioritised our innovation effort towards our 
most promising initiatives, one of which is Hirefirst, which was launched in October 2018 and is 
at the early market testing stage and, generating its first revenues in the half. 
 
We continued to hold non-controlling shareholdings in three innovation start-ups which, since the 
date of initial application of IFRS 9 are fair valued through other comprehensive income. In the 
six months to 31 May 2019, our investments in The Sandpit Limited and separately in Ryalto have 
 been written down by GBP0.8 million and GBP0.2 million respectively. The equity rights in The Sandpit 
Limited, which discontinued its operations earlier this year, were converted into a minority 
shareholding in The Sandpit Ventures Limited at an immaterial nominal book value. The downward 
valuation of Ryalto equity rights was caused by the dilution in the existing shareholders' 
ownership of Ryalto as a result of the company issuing new equity. 
 
Taxation 
 
 The tax charge on pre-exceptional statutory profit before tax for the period was GBP6.5 million (HY 
 2018: GBP5.3 million), representing an effective tax rate ('ETR') of 27% (HY 2018: 26%). The ETR on 
post-exceptional statutory profit before tax was 27% (HY 2018: 27%). 
 
The ETR primarily reflects our geographical mix of profits. Other material items affecting the tax 
charge include the European Union's Anti-Tax Avoidance Directive, and US Tax Reform. The Group is 
also affected by the European Commission's state aid investigation into the UK's controlled 
foreign company legislation. We continue to note this as a contingent liability. 
 
Earnings per share ('EPS') 
 
On an adjusted basis, EPS was up by 1.9 pence at 13.5 pence (HY 2018: adjusted 11.6 pence and 
reported 10.1 pence), due to an increase in the adjusted profit before tax offset by an increase 
of 1.2 million in weighted average number of shares. On a reported basis, EPS increased to 12.7 
pence, up 2.6 pence, attributable mainly to an improved trading performance and decline in 
restructuring costs as explained above. The weighted average number of shares used for basic EPS 
grew to 129.9 million (HY 2018: 128.7 million). Reported diluted EPS was 12.2 pence (HY 2018: 9.6 
pence), up 2.6 pence. Share dilution mainly results from various share options in place and 
expected future settlement of certain tracker shares. The dilutive effect on EPS from tracker 
shares will vary in future periods depending on the profitability of the underlying tracker 
businesses, the volume of new tracker arrangements created and the settlement of vested 
arrangements. 
 
Dividends 
 
The Board proposes to pay an interim dividend of 5.1 pence (HY 2018: 4.7 pence), amounting to 
 approximately GBP6.7 million in total. This will be paid on 6 December 2019 to shareholders on 
record at 1 November 2019. The Board monitors the appropriate level of the dividend, taking into 
account, inter alia, achieved and expected trading of the Group, together with its balance sheet 
position. As previously stated, the Board is targeting a dividend cover of between 2.0x and 2.5x, 
based on underlying EPS, over the short to medium term. 
 
Cash Flow 
 
  On an adjusted basis we generated higher cash from operations at GBP12.0 million (HY 2018: GBP7.5 
million on an adjusted basis). It reflects a combination of the improved underlying trading 
performance in a number of markets and sectors, and the benefits of operational efficiencies 
including cash collection. 
 
  Capital expenditure decreased to GBP1.2 million (HY 2018: GBP3.1 million) with lower spend on office 
moves and IT infrastructure. Within the six months ended 31 May 2019, the bulk of the capital 
 expenditure was in relation to new IT hardware, GBP0.5 million. 
 
Overall, the cash conversion ratio increased to 44% on an adjusted basis and 39% on a reported 
basis (HY 2018: 22% on an adjusted basis or 13% on a reported basis). The net cash outflow from 
  exceptional restructuring items was GBP1.6 million (HY 2018: GBP2.1 million). 
 
  Income tax paid decreased to GBP6.3 million (HY 2018: GBP7.4 million) and dividends remained largely 
   unchanged at GBP6.1 million (HY 2018: GBP6.0 million). During the period, the Group also paid GBP0.9 
 million (HY 2018: GBP1.0 million) for the purchase of its own shares to satisfy employee share 
 schemes in future periods. Foreign exchange had a moderate positive impact of GBP0.5 million (HY 
 2018: positive impact of GBP0.2 million). 
 
  We started the period with net debt of GBP4.1 million and closed the period with net debt of GBP8.0 
 million (HY 2018: net debt GBP6.2 million). 
 
A reconciliation of cash conversion ratio on an adjusted basis to reported basis 
 
                               HY 2019             HY 2018 
                           Adjusted Reported   Adjusted Reported 
Cash flows from                  GBPm       GBPm         GBPm       GBPm 
operating activities 
Operating profit            24.6(1)     23.3    20.4(1)     18.0 
Non-cash items               4.4(2)      4.7        5.1      5.1 
Changes in working        (17.0)(3)   (17.6)  (18.0)(4)   (17.7) 
capital 
 
Cash generated from            12.0     10.4        7.5      5.4 
operations 
Capex                         (1.2)    (1.2)      (3.1)    (3.1) 
Cash conversion ratio           44%      39%        22%      13% 
(%) 
 
  (1) Excludes GBP1.3 million in exceptional costs (HY 2018: GBP2.4 million) 
 
  (2) Excludes GBP0.3 million in IFRS 2 charge classified as exceptional (HY 2018: GBPnil) 
 
 (3) Added back GBP0.6 million in a net decrease in exceptional provision 
 
 (4) Excludes GBP0.3 million in a net increase in exceptional provision 
 
Treasury management 
 
We finance the Group's operations through equity and bank borrowings. The Group's cash management 
policy is to minimise interest payments by closely managing Group cash balances and external 
borrowings. We intend to continue this strategy while maintaining a strong balance sheet position. 
 
 We maintain a committed Revolving Credit Facility ('RCF') of GBP50.0 million, along with an 
 uncommitted GBP20.0 million accordion facility, with HSBC and Citibank, giving the Group an option 
 to increase its total borrowings under the facility to GBP70.0 million. At the half year, the Group 
  had drawn down GBP15.0 million (HY 2018: GBP22.5 million) on these facilities. 
 
The RCF is subject to financial covenants and the funds borrowed under this facility bear interest 
at a minimum annual rate of 1.3% above a three-month Sterling LIBOR, giving an average interest 
rate of 2.0% during the period (HY 2018: 1.8%). The finance costs for the half-year amounted to 
  GBP0.6 million (HY 2018: GBP0.3 million). 
 
 The Group also has an uncommitted GBP5.0 million overdraft facility with HSBC. 
 
Foreign exchange 
 
Foreign exchange volatility continues to be a significant factor in the reporting of the overall 
performance of the business with the main functional currencies of the Group entities being 
Sterling, the Euro and the US Dollar. 
 
For HY 2019, the YoY movements in exchange rates between Sterling and the Euro and the US Dollar 
provided a moderate net tailwind to the reported performance of the Group with the highest impact 
coming from the Euro and US Dollar. The exchange rate movements increased our reported HY 2019 net 
  fees by approximately GBP1.6 million and operating profit by GBP0.4 million. 
 
Exchange rate movements remain a material sensitivity. By way of illustration, each one per cent 
movement in exchange rates of the Euro and the US Dollar against Sterling impacted our HY 2019 net 
fees by GBP0.9 million and GBP0.4 million, respectively, and operating profit by GBP0.3 million and GBP0.1 
million, respectively. 
 
The Board considers it appropriate in certain cases to use derivative financial instruments as 
part of its day-to-day cash management to provide the Group with protection against adverse 
movements in the Euro and US dollar during the settlement period. The Group does not use 
derivatives to hedge translational foreign exchange exposure in its balance sheet and income 
statement. 
 
Principal Risks and Uncertainties 
 
Principal risks and uncertainties affecting the business activities of the Group are detailed 
within the Strategic Report section of the Group's 2018 Annual Report, a copy of which is 
available on the Group's website www.sthree.com [3]. 
 
In terms of macroeconomic environment risks, our strategy is to continue to grow the size of our 
international business and newer sectors, in both financial terms and geographical coverage. This 
will help reduce our exposure or reliance on any one specific economy, although a downturn in a 
particular market could adversely affect the Group's key risk factors. 
 
In the view of the Board, there is no material change expected to the Group's key risk factors in 
the foreseeable future. 
 
DIRECTORS' RESPONSIBILITY STATEMENT 
 
The Directors confirm that to the best of their knowledge: 
 
(a) the Condensed Consolidated Interim Financial Report (unaudited) has been prepared in 
accordance with IAS 34, "Interim Financial Reporting" as adopted by the European Union; and 
 
(b) the Interim Management Report includes a fair review of the information required by the 
Disclosure and Transparency Rules ('DTR') paragraph 4.2.7R (an indication of important events that 
have occurred during the first six months of the financial year and their impact on the condensed 
financial information, and description of principal risks and uncertainties for the remaining six 

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DJ SThree: Interim Results -6-

months of the financial year); and 
 
(c) the Interim Management Report includes a fair review of the information required by DTR 
paragraph 4.2.8R (disclosure of material related parties' transactions and changes therein during 
the first six months of the financial year). 
 
The Directors of SThree Plc are listed in the SThree Plc Annual Report for 30 November 2018. A 
list of the current Directors is maintained on the Group's website www.sthree.com [3]. 
 
Approved by the Board 19 July 2019 and signed on its behalf by: 
 
Mark Dorman Alex Smith 
 
Chief Executive Officer Chief Financial Officer 
 
www.sthree.com/investors [4] 
 
Condensed Consolidated Interim Financial Report 
 
Condensed consolidated income statement - unaudited 
 
for the half year ended 31 May 2019 
 
                                       31 May 2019              31 May 2018 
                          Before Exceptional Total Before Exceptional Total 
                        exceptio       items       except       items 
                             nal                    ional 
                           items                    items 
                  Note     GBP'000       GBP'000 GBP'000  GBP'000       GBP'000 GBP'000 
 
Revenue              2   653,268           - 653,2 585,94           - 585,9 
                                                68      0                40 
Cost of sales              (490,           - (490, (437,5           - (437, 
                            279)              279)    45)              545) 
 
Net fees             2   162,989           - 162,9 148,39           - 148,3 
                                                89      5                95 
 
Administrative       3 (138,383      (1,333) (139, (127,9     (2,434) (130, 
expenses                       )              716)    98)              432) 
 
Operating profit           24,60     (1,333) 23,27 20,397     (2,434) 17,96 
                               6                 3                        3 
 
Finance income                29           -    29     46           -    46 
Finance costs              (628)           - (628)  (313)           - (313) 
Gain on disposal               -           -     -    146           -   146 
of associate 
 
Profit before             24,007     (1,333) 22,67 20,276     (2,434) 17,84 
taxation                                         4                        2 
 
Taxation             4   (6,481)         253 (6,22 (5,320         462 (4,85 
                                                8)      )                8) 
 
Profit for the            17,526     (1,080) 16,44 14,956     (1,972) 12,98 
period                                           6                        4 
attributable 
to owners of the 
Company 
 
Earnings per         6     pence       pence pence  pence       pence pence 
share 
Basic                       13.5       (0.8)  12.7   11.6       (1.5)  10.1 
Diluted                     13.0       (0.8)  12.2   11.1       (1.5)   9.6 
 
The accompanying notes on pages 16-25 form an integral part of this Interim Financial Report. 
 
Condensed consolidated statement of comprehensive income - 
unaudited 
For the half year ended 31 May 2019 
 
                                                  31 May  31 May 
                                                    2019    2018 
                              Note                 GBP'000   GBP'000 
 
Profit for the                                    16,446  12,984 
period 
 
Other 
comprehensive 
income: 
Items that may be 
subsequently reclassified to 
profit or loss: 
Exchange                                             220     680 
differences on 
retranslation 
of foreign 
operations 
 
Items that 
will not be 
subsequently 
reclassified 
to profit or 
loss: 
Net loss on                      1                 (983)       - 
equity 
instruments at 
fair value 
through other 
comprehensive 
income 
 
Other comprehensive income                         (763)     680 
for the period (net of tax) 
 
Total comprehensive income for the period         15,683  13,664 
attributable to owners of the Company 
 
The accompanying notes on pages 16-25 form an integral part of this Interim Financial Report. 
 
Condensed consolidated statement of financial position - 
unaudited 
as at 31 May 2019 
 
                                                        Audited 
                                        31 May      30 November 
                                          2019             2018 
                         Note            GBP'000            GBP'000 
 
ASSETS 
Non-current 
assets 
Property,                                6,136            6,915 
plant and 
equipment 
Intangible                               8,614            9,609 
assets 
Investments                 1            1,017            1,977 
Deferred                                 2,633            2,750 
tax assets 
                                        18,400           21,251 
 
Current 
assets 
Trade and                              270,383          285,618 
other 
receivables 
Current tax                              2,099            2,751 
assets 
Cash and                    7           22,591           50,844 
cash 
equivalents 
                                       295,073          339,213 
 
Total                                  313,473          360,464 
assets 
 
EQUITY AND 
LIABILITIES 
Equity 
attributabl 
e to owners 
of the 
Company 
Share                       9            1,321            1,319 
capital 
Share                                   30,795           30,511 
premium 
Other                                  (5,408)          (5,275) 
reserves 
Retained                                70,544           75,116 
earnings 
Total                                   97,252          101,671 
equity 
 
Non-current 
liabilities 
Provisions                               1,465            1,569 
for 
liabilities 
and charges 
 
Current 
liabilities 
Borrowings                  8           15,000           37,428 
Bank                        7           15,620           17,521 
overdraft 
Provisions                               8,854            9,614 
for 
liabilities 
and charges 
Trade and                              175,282          191,742 
other 
payables 
Current tax                                  -              919 
liabilities 
                                       214,756          257,224 
 
Total                                  216,221          258,793 
liabilities 
 
Total                                  313,473          360,464 
equity and 
liabilities 
 
The accompanying notes on pages 16-25 form an 
integral part of this Interim Financial Report. 
 
Condensed consolidated statement of changes in equity - unaudited 
for the half 
year ended 31 
May 2019 
 
                Share   Share     Capital Capital Treas    Currency        Retained Total 
              capital premium  redemption reserve   ury translation        earnings equit 
                                  reserve         reser     reserve                     y 
                                                     ve                             attri 
                                                                                    butab 
                                                                                    le to 
                                                                                    owner 
                                                                                     s of 
                                                                                      the 
                                                                                    Compa 
                                                                                       ny 
 
                 Fair 
                 valu 
                    e 
                 rese 
                  rve 
                   of 
                 equi 
                   ty 
                 inve 
                 stme 
                  nts 
                GBP'000   GBP'000       GBP'000   GBP'000 GBP'000       GBP'000 GBP'000     GBP'000 GBP'000 
Audited         1,317  28,806         168     878 (8,53     (1,067)     -    59,138 80,70 
balance at                                           5)     (1,083)                     5 
30 
November 
2017 
 
Profit for          -       -           -       -     -           -     -    12,984 12,98 
the half                                                                                4 
year ended 
31 May 
2018 
Other               -       -           -       -     -         680     -         -   680 
comprehens 
ive income 
for the 
period 
 
Total               -       -           -       -     -         680     -    12,984 13,66 
comprehens                                                                              4 
ive income 
for the 
period 
Dividends           -       -           -       -     -           -     -   (6,041) (6,04 
paid to                                                                                1) 
equity 
holders 
(note 5) 
Dividends           -       -           -       -     -           -     -  (11,976) (11,9 
payable to                                                                            76) 
equity 
holders 
(note 5) 
Settlement          -       -           -       -   121           -     -     (212)  (91) 
of vested 
tracker 
shares 
Settlement          2     349           -       -     -           -     -         -   351 
of 
share-base 
d payments 
Purchase            -       -           -       - (989)           -     -         - (989) 
of own 
shares by 
Employee 
Benefit 
Trust 
(note 9) 
Credit to           -       -           -       -     -           -           1,577 1,577 
equity for 
equity-set 
tled 
share-base 
d payments 
Total          2 X222     349           -       - (868)         680     -   (3,668) (3,50 
movements                                                                              5) 
in equity 
 
Unaudited       1,319  29,155         168     878 (9,40         387     -    55,470 77,20 

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DJ SThree: Interim Results -7-

balance at                                           3)                                 0 
31 May 
2018 
Audited         1,319  30,511         172     878 (7,83       1,505     -    75,116 101,6 
balance at                                           0)                                71 
30 
November 
2018 
Effect of           -       -           -       -     -           -     -   (2,392) (2,39 
a change                                                                               2) 
in 
accounting 
policy 
(note 1) 
Restated        1,319  30,511         172     878 (7,83       1,505     -    72,724 99,27 
total                                                0)                                 9 
equity at 
1 December 
2018 
Profit for          -       -           -       -     -           -     -    16,446 16,44 
the half                                                                                6 
year ended 
31 May 
2019 
Other               -       -           -       -     -         220 (983)         - (763) 
comprehens 
ive income 
for the 
period 
(note 1) 
Total               -       -           -       -     -         220 (983)    16,446 15,68 
comprehens                                                                              3 
ive income 
for the 
period 
Dividends           -       -           -       -     -           -     -   (6,069) (6,06 
paid to                                                                                9) 
equity 
holders 
(note 5) 
Dividends           -       -           -       -     -           -     -  (12,722) (12,7 
payable to                                                                            22) 
equity 
holders 
(note 5) 
Settlement          2     284           -       - 1,507           -     -   (1,507)   286 
of 
share-base 
d payments 
Purchase            -       -           -       - (877)           -     -         - (877) 
of own 
shares by 
Employee 
Benefit 
Trust 
(note 9) 
Credit to           -       -           -       -     -           -     -     1,672 1,672 
equity for 
equity-set 
tled 
share-base 
d payments 
Total               2     284           -       -   630         220 (983)   (2,180) (2,02 
movements                                                                              7) 
in equity 
Unaudited       1,321  30,795         172     878 (7,20       1,725 (983)    70,544 97,25 
balance at                                           0)                                 2 
31 May 
2019 
 
The accompanying notes on 
pages 16-25 form an integral 
part of this Interim Financial 
Report. 
 
Condensed consolidated statement of cash flows - unaudited 
for the half year ended 31 May 2019 
                                                31 May    31 May 
 
                                                  2019      2018 
                                         Note    GBP'000     GBP'000 
 
Cash flows from 
operating activities 
Profit before taxation                          22,674    17,842 
after exceptional items 
Adjustments for: 
Depreciation and                                 3,001     2,787 
amortisation charge 
Accelerated amortisation and impairment of           -       724 
intangible assets 
Finance income                                    (29)      (46) 
Finance cost                                       628       313 
Loss on disposal of                                  8         8 
property, plant and 
equipment 
Loss on disposal of                                  -        70 
subsidiaries 
Gain on disposal of                                  -     (146) 
associate 
FX revaluation gain on                             (5)      (29) 
investments 
Non-cash charge for                              1,672     1,577 
share-based payments 
Operating cash flows before changes in 
working capital and provisions 
                                       27,949   23,100 
Decrease/(increase) in                           3,187   (7,960) 
receivables 
Decrease in payables                          (19,905)   (8,916) 
Decrease in provisions                           (916)     (777) 
 
Cash generated from                             10,315     5,447 
operations 
Finance income                                      10        25 
Income tax paid - net                          (6,345)   (7,445) 
 
Net cash generated from/(used in) operating      3,980   (1,973) 
activities 
 
Cash generated from operating activities         5,606       127 
before exceptional items 
Cash outflow from exceptional items            (1,626)   (2,100) 
Net cash generated from/(used in) from           3,980   (1,973) 
operating activities 
 
Cash flows from 
investing activities 
Purchase of property,                            (721)   (1,718) 
plant and equipment 
Purchase of intangible                           (520)   (1,380) 
assets 
 
Net cash used in investing activities          (1,241)   (3,098) 
 
Cash flows from 
financing activities 
(Net repayments                             8 (22,428)    10,453 
of)/proceeds from 
borrowings 
Interest paid                                    (570)     (313) 
Employee subscription                               70         - 
for tracker shares 
Proceeds from exercise                             286       342 
of share options 
Purchase of own shares                           (877)     (989) 
Dividends paid to                           5  (6,069)   (6,041) 
equity holders 
 
Net cash (used                                (29,588)     3,452 
in)/generated from 
financing activities 
 
Net decrease in cash and cash equivalents     (26,849)   (1,619) 
Cash and cash equivalents at beginning of       33,323    17,621 
the year 
Exchange gains relating                            497       225 
to cash and cash 
equivalent 
 
Net cash and cash                           7    6,971    16,227 
equivalents at end of 
the year 
 
The accompanying notes on pages 16-25 form an integral part of this Interim Financial Report. 
 
Notes to the CONDENSED CONSOLIDATED Interim Financial REPORT - unaudited 
 
for the half year ended 31 May 2018 
 
1) Accounting policies 
 
Corporate Information 
 
SThree plc ('the Company') and its subsidiaries (collectively 'the Group') operate predominantly 
in the United Kingdom & Ireland, Continental Europe, USA and Asia Pacific & Middle East. The Group 
consists of different brands and provides both Permanent and Contract specialist recruitment 
services, primarily in the Technology, Banking & Finance, Energy, Engineering and Life Sciences 
sectors. 
 
The Company is a public limited company listed on the London Stock Exchange and incorporated and 
domiciled in the United Kingdom and registered in England and Wales. Its registered office is 1st 
Floor, 75 King William Street, London, EC4N 7BE. 
 
This Condensed Consolidated Interim Financial Report ('Interim Financial Report') of the Group as 
at and for the half year ended 31 May 2019 comprises that of the Company and all its subsidiaries. 
The Interim Financial Report is unaudited and has not been reviewed by external auditors. It does 
not constitute statutory accounts as defined in section 434 of the Companies Act 2006. Statutory 
accounts for the year ended 30 November 2018 were approved by the Board of Directors on 25 January 
2019 and a copy was delivered to the Registrar of Companies. The auditors reported on those 
accounts, their report was unqualified, did not draw attention to any matters by way of emphasis 
and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. 
 
The Interim Financial Report of the Group was approved by the Board for issue on 19 July 2019. 
 
Basis of preparation 
 
This Interim Financial Report for the half-year reporting period ended 31 May 2019 has been 
prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct 
Authority and with IAS 34 Interim Financial Reporting as adopted by the European Union. The 
Interim Financial Report is presented on a condensed basis as permitted by IAS 34 and therefore 
does not include all disclosures that would otherwise be included in an annual financial report 
and should be read in conjunction with the Group's 2018 annual financial statements, which were 
prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted and 
endorsed by the European Union. 
 
The Directors have elected to change all references to "gross profit" in the financial statements 
to "net fees" with effect from the half-year reporting period ended 31 May 2019. 
 
Going concern 
 
The Group's business activities, together with the factors likely to affect its future 
development, performance and position are set out in the accompanying Interim Management Report. 
The financial position of the Group, its cash flows, liquidity position and borrowing facilities 
are shown in other sections of this Interim Financial Information. 
 
Having considered the Group's resources and available banking facilities, the Directors are 
satisfied that the Group has sufficient resources to continue in operational existence for the 
foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing this 
Interim Financial Information. 
 
Significant Accounting Policies 
 
The accounting policies adopted are consistent with those applied in the preparation of the 
Group's 2018 annual financial statements and corresponding interim reporting period, except for 
the adoption of new and amended standards as set out below. 
 
New Standards and Interpretations 
 
A number of new or amended standards became applicable for the current reporting period and the 
Group had to change its accounting policies and make retrospective adjustments as a result of 
adopting the following standards: 
 
· IFRS 9 Financial       · 
instruments 
 
· IFRS 15 Revenue from Contracts with Customers 
 
As at the date of authorisation of this Interim Financial Information, the following key standards 
and amendments to standards were in issue but not yet effective. The amendments listed below do 

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not have any impact on the amounts recognised in prior periods and are not expected to 
significantly affect the current or future periods. 
 
IFRS 2 (amendments) Share Based Payments 
IFRIC 22 Foreign Currency Transactions and Advance Consideration 
IFRIC 23 Uncertainty over Income Tax Treatments 
 
The impact and timing of the adoption of IFRS 16 Leases is disclosed below. The Directors are 
currently evaluating the impact of the adoption of all other standards, amendments and 
interpretations, but do not expect them to have a material impact on Group operations or results 
 
IFRS 16 Leases 
 
IFRS 16 Leases ('IFRS 16') requires lessees to account for all leases under a single on-balance 
sheet model similar to accounting for finance leases under IAS 17 Leases. For every lease brought 
onto the balance sheet, lessees will recognise a right-of-use asset and a lease liability. The 
only exceptions are short-term and low-value leases. 
 
Within the income statement, operating lease rental payment will be replaced by depreciation and 
interest expense. This will result in an increase in operating profit and an increase in finance 
costs. 
 
The standard will affect primarily the accounting for the Group's operating leases. Based on the 
results of a preliminary impact assessment, on the date of initial application of IFRS 16, the 
  Group's net assets are expected to decrease by a range of GBP3 million to GBP4 million (a net result 
  of the recognition of lease assets at approximately GBP35 million to GBP40 million offset by lease 
  liabilities of GBP38 million to GBP44 million). 
 
The new leasing standard is mandatory for first interim period within the annual reporting periods 
beginning on or after 1 January 2019. The Group does not intend to adopt the standard before its 
effective date. The Group will transition to IFRS 16 on a modified retrospective basis in the 
financial reporting period commencing on 1 December 2019. 
 
Changes in accounting policies 
 
This note explains the impact of the adoption of IFRS 9 Financial Instruments ('IFRS 9') and IFRS 
15 Revenue from Contracts with Customers ('IFRS 15') on the Group's financial statements and also 
discloses the new accounting policies that have been applied from 1 December 2018, where they are 
different to those applied in prior periods. 
 
(a) Impact on the financial statements 
 
As a result of the changes in the Group's accounting policies, normally prior year financial 
statements have to be restated. As explained in point (b) below, IFRS 9 was adopted without 
restating comparative information. The reclassifications and the adjustments arising from the new 
fair valuation requirements and impairment are therefore not reflected in the statement of 
financial position as at 30 November 2018. As explained in point (d) below, IFRS 15 was adopted on 
the modified retrospective basis, whereby the adjustment arising from the revised Contract accrued 
income policy was recognised in the opening balance of retained earnings on 1 December 2018. 
 
The following tables show the adjustments recognised for each individual line item. Line items 
that were not affected by the changes have not been included. 
 
                     30 November IFRS 9  IFRS 15 1 December 2018 
                            2018 
Impact on the              GBP'000  GBP'000    GBP'000           GBP'000 
statement of 
financial 
position 
(increase/(decrea 
se)) (extract) 
Current assets 
Trade and other          285,618      - (13,017)         272,601 
receivables 
Current tax                2,751      -      766           3,517 
assets 
                         288,369      - (12,251)         276,118 
 
Current 
liabilities 
Trade and other          191,742      -  (9,859)         181,883 
payables 
 
Equity 
Retained earnings         75,116      -  (2,392)          72,724 
 
(b) IFRS 9 - Impact of adoption 
 
IFRS 9 replaces the provisions of IAS 39 that relate to the recognition, classification and 
measurement of financial assets and financial liabilities, derecognition of financial instruments, 
impairment of financial assets and hedge accounting. 
 
The adoption of IFRS 9 from 1 December 2018 resulted in changes in accounting policies; however 
there were no adjustments to the amounts recognised in the financial statements. In accordance 
with the transitional provisions in IFRS 9 paragraphs 7.2.15 and 7.2.26, comparative figures have 
not been restated. Due to the immaterial impact of IFRS 9 adoption, the adjustment to the opening 
balance of retained earnings or other reserves at 1 December 2018 was not recognised. 
 
(i) Classification and measurement 
 
On the date of initial application of IFRS 9, the Directors assessed which business models were 
applicable to the financial assets held by the Group, and classified its financial instruments 
into the appropriate IFRS 9 categories: financial assets held at fair value through profit or loss 
('FVTPL'), financial assets held at fair value through other comprehensive income ('FVOCI'), and 
financial assets held at amortised cost (the latter comprise primarily 'Trade and other 
receivables'). The main effects resulting from this reclassification were as follows: 
 
                                FVTPL                FVOCI Trade 
                                                             and 
                                                           other 
                                                           recei 
                                      (Available-for-sale) vable 
                                                               s 
Financial assets - 1            GBP'000                GBP'000 GBP'000 
December 2018 
Closing balance 30 November         -                1,977 285,6 
2018 - IAS39*                                                 18 
Reclassify debt investments       435                (435)     - 
from available-for-sale to 
FVTPL (note (i.a)) 
Reclassify equity                   -                    -     - 
investments from 
available-for-sale to FVOCI* 
(note (i.b)) 
Adjustments arising from the        -                    - (13,0 
adoption of IFRS 15 (note                                    17) 
(d)) 
Opening balance 1 December        435                1,542 272,6 
2018 - IFRS 9                                                 01 
 
*The closing balances as at 30 November 2018 show available-for-sale financial assets under FVOCI. 
 
(i.a) Reclassification from available-for-sale to FVTPL 
 
Certain investments in convertible bonds with the embedded conversion rights were reclassified 
from available-for-sale to financial assets at FVTPL (GBP0.4 million at 1 December 2018). Due to the 
embedded call option, they did not meet the IFRS 9 criteria for classification at amortised cost, 
because their cash flows did not represent solely payments of principal and interest. 
 
There were no related fair value gains or losses to transfer from the available-for-sale financial 
assets reserve to retained earnings on 1 December 2018. Under IAS 39, the bonds were held at cost 
less impairment. 
 
On the date of the initial application of IFRS 9, the fair value of the bonds was equivalent to 
the cost for these assets. There was no impact on retained earnings at 1 December 2018. In the six 
months ended to 31 May 2019, an immaterial uplift was determined in the fair value of one bond 
including the embedded option. Hence, no upward fair valuation was performed in the income 
statement. 
 
(i.b) Equity investments previously classified as available-for-sale 
 
The Group elected to present changes in the fair value of all its equity investments in OCI, as 
they are held for long-term strategic purposes. As a result, assets with the carrying value of 
 GBP1.5 million under IAS 39 were reclassified from available-for-sale financial assets to financial 
assets at FVOCI under IFRS 9. There were no fair value gains or losses recognised for these 
investments in other reserves in prior years. On the date of initial application of IFRS 9, the 
Directors estimated fair value of the entire equity portfolio at GBP1.7 million. This represented an 
  immaterial uplift from the carrying value of GBP1.5 million under IAS 39, resulting in GBPnil impact 
on retained earnings at 1 December 2018. 
 
However, in the six months to 31 May 2019, the Directors wrote off GBP0.8 million in relation to the 
 investment in The Sandpit Limited and GBP0.2 million in relation to Ryalto. The write-off amounts 
were recognised in OCI. The equity rights in The Sandpit Limited, which discontinued its 
operations, were converted into a minority shareholding in The Sandpit Ventures Limited at an 
immaterial nominal book value. The downward valuation of Ryalto equity rights was caused by the 
dilution in the existing shareholders' ownership of Ryalto as a result of the company issuing new 
equity. The amount of the write-off was recognised in OCI. 
 
(ii) Impairment of financial assets 
 
The Group has two types of financial assets that are subject to IFRS 9's new expected credit loss 
model: trade receivables and cash and cash equivalents. 
 
The Directors determined that the Group's existing impairment methodology for trade receivables is 
overall compliant with IFRS 9. 
 
Under the existing policy, trade receivables are grouped based on the days past due. For each 
category, the Group applies fixed provision rates based on historical collection experience and 
current economic trends. In addition, the Group performs an individual assessment for a selection 
of exposures, using qualitative factors such as forward-looking expectations about debtor's credit 
standing or macroeconomic conditions. 
 
As such, no adjustment to the loss allowance or opening balance of retained earnings was 
recognised on transition to IFRS 9. 
 
  The loss allowances increased by a further GBP0.9 million to GBP3.6 million for trade receivables 
during the six months to 31 May 2019. The increase would have been same under the incurred loss 
model of IAS 39. 
 

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The expected credit losses on cash and cash equivalents were immaterial owing to the short-term 
nature of the Group's bank deposits and strict treasury policy which stipulates a list of approved 
counterparties, with reference to their high credit standing, resulting in GBPnil impact on retained 
earnings at 1 December 2018. 
 
(c) IFRS 9 - Accounting policies applied from 1 December 2018 
 
(i) Classification of investments and other financial assets 
 
From 1 December 2018, the Group classifies its financial assets in the following measurement 
categories: 
 
· those to be measured subsequently at fair value (either through OCI, or through profit or 
loss), and 
 
· those to be measured at amortised cost. 
 
The classification depends on the Group's business model for managing the financial assets and the 
contractual terms of the cash flows. For assets measured at fair value, gains and losses will 
either be recorded in profit or loss or OCI. For investments in equity instruments that are not 
held for trading, this will depend on whether the Group has made an irrevocable election at the 
time of initial recognition to account for the equity investment at FVOCI. 
 
(ii) Measurement of investments and other financial assets 
 
At initial recognition, the Group measures a financial asset at its fair value plus, in the case 
of a financial asset not at FVTPL, transaction costs that are directly attributable to the 
acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are 
expensed in profit or loss. 
 
Financial assets with embedded derivatives are considered in their entirety when determining 
whether their cash flows are solely payment of principal and interest. 
 
Equity instruments 
 
The Group subsequently measures all equity investments at fair value. Where the Directors have 
elected to present fair value gains and losses on equity investments in OCI, there is no 
subsequent reclassification of fair value gains and losses to the income statement following the 
derecognition of the investment. Dividends from such investments continue to be recognised in the 
income statement as other income when the Group's right to receive payments is established. 
 
Changes in the fair value of equity investments at FVTPL are recognised in other gains/(losses) in 
the income statement. Impairment losses (and reversal of impairment losses) on equity investments 
measured at FVOCI are not reported separately from other changes in fair value. 
 
Debt instruments 
 
Subsequent measurement of debt instruments depends on the Group's business model for managing the 
asset and the cash flow characteristics of the asset. At present, the Group classifies its debt 
instruments into two measurement categories: 
 
· Amortised cost: assets that are held for collection of contractual cash flows where those cash 
flows represent solely payments of principal and interest are measured at amortised cost. Any 
interest income from these financial assets is included in finance income using the effective 
interest rate method. Impairment losses are recognised in the income statement. 
 
· FVTPL: assets that do not meet the criteria for amortised cost or FVOCI are measured at FVTPL. 
A gain or loss on a debt investment that is subsequently measured at FVTPL is recognised in the 
income statement and presented below operating profit in the period in which it arises. 
 
(iii) Impairment 
 
Under IFRS 9, the Group will continue to assess trade receivables for any expected credit losses 
associated with the instrument based on historical collection experience, current and forward 
looking economic trends. 
 
(d) IFRS 15 - Impact of adoption 
 
The adoption of IFRS 15 resulted in changes in accounting policies and adjustments to the amounts 
recognised in the financial statements on 1 December 2018. In line with the transition provisions 
in IFRS 15, the Group adopted the new rules on the modified retrospective basis without 
restatement of comparatives. Under the modified transition method, on 1 December 2018, a net 
 (post-tax) adjustment of GBP2.4 million was made to the opening balance of retained earnings, to 
recognise a new policy of estimating accrued income. 
 
The following adjustments were made to the amounts recognised in the statement of financial 
position at the date of initial application: 
 
                          IAS 18                         IFRS 15 
                     30 November Re-measurements 1 December 2018 
                            2018 
                           GBP'000           GBP'000           GBP'000 
Trade and other           78,741        (13,017)          65,724 
receivables 
(Accrued income 
only) 
Trade and other        (107,105)           9,859        (97,246) 
payables 
(Accruals only) 
Current tax                2,751             766           3,517 
assets 
Post-tax                                 (2,392) 
adjustment at the 
date of initial 
application of 
IFRS 15 
 
The impact on the Group's retained earnings at 1 December 2018 is as follows: 
 
                                                            2018 
                                                           GBP'000 
Retained earnings prior to adjustment                     75,116 
Restatement of accrued income                           (13,017) 
Restatement of accrued cost of sales                       9,859 
Tax adjustment to retained earnings from adoption of         766 
IFRS 15 
Opening retained earnings 1 December from adoption of     72,724 
IFRS 15 
 
(e) IFRS 15 - Accounting policies applied from 1 December 2018 
 
Contract revenue ('accrued income') is recognised when the supply of professional services has 
been rendered. This includes an assessment of professional services received by the client for 
services provided by contractors between the date of the last received timesheet and the reporting 
end date. Accrued income is recognised as revenue for contractors where no timesheet has been 
received, but the individual is 'live' on the Group's systems, or where a client has not yet 
approved a submitted timesheet. 
 
Previously, such accruals were systematically removed after a three-month cut-off date if no 
timesheet was received or no customer approval was obtained. That policy of estimating accrued 
income/cost historically resulted in a portion of revenue/cost being reversed (this is referred to 
as 'shrinkage'). 
 
Under IFRS 15, an amount of estimated Contract accrual can only be recognised if it is highly 
probable that a significant reversal in the amount of recognised revenue will not occur in 
subsequent periods. 
 
In line with this new requirement, to prevent the over-recognition of revenue, from 1 December 
2018 the Group has applied the historical shrinkage rate to the amount of accrued income/cost 
determined for unsubmitted or unapproved timesheets. As a consequence, on 1 December 2018 the 
  accrued income and cost would have been GBP13.0 million and GBP9.9 million lower respectively. This 
 resulted in a net adjustment to the opening balance of retained earnings of GBP3.1 million pre-tax. 
 
Critical accounting judgements and key sources of estimation uncertainty 
 
The preparation of the Interim Financial Report requires the Directors to make judgements, 
estimates and assumptions that affect the application of accounting policies and the reported 
amounts of assets and liabilities at the end of the reporting period, and the reported amounts of 
revenue and expenses during the reporting period. Although these estimates are based on the 
Directors' best knowledge of the amounts, the actual results may ultimately differ from these 
estimates. 
 
In preparing the Interim Financial Report, the significant judgements made by management in 
applying the Group's accounting policies and the key sources of estimation uncertainty were the 
same as those that applied in the Group's 2018 annual financial statements, with the exception of 
changes in estimates that are required in determining the provision for income taxes. 
 
Seasonality of Operations 
 
Due to the seasonal nature of the recruitment business, higher revenues and operating profits are 
usually expected in the second half of the year compared to the first half. In the financial year 
ended 30 November 2018, 46% of net fees were earned in the first half of the year, with 54% earned 
in the second half. 
 
2) Segmental analysis 
 
IFRS 8 'Segmental Reporting' requires operating segments to be identified on the basis of internal 
results about components of the Group that are regularly reviewed by the entity's chief operating 
decision maker to make strategic decisions and assess segment performance. 
 
The Directors have determined the chief operating decision maker to be the Executive Committee 
made up of the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, 
the Chief People Officer and the Chief Sales Officer, with other senior management attending via 
invitation. Operating segments have been identified based on reports reviewed by the Executive 
Committee, which consider the business primarily from a geographical perspective. The Group 
segments the business into four reportable regions: the United Kingdom & Ireland ('UK&I'), USA, 
Asia Pacific & Middle East ('APAC & ME') and Continental Europe. The latter comprises DACH 
(Germany, Switzerland and Austria) and 'Benelux, France & Spain'; both of these sub-regions were 
aggregated into one reportable segment based on the possession of similar economic 
characteristics. 
 
The Group's management reporting and controlling systems use accounting policies that are the same 
as those described in note 1 in the summary of significant accounting policies in the Group's 2018 
annual financial statements. 
 
Revenue and net fees by reportable segment 
 
The Group measures the performance of its operating segments through a measure of segment profit 
or loss which is referred to as 'net fees' in the management reporting and controlling systems. 

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Net fees are the measure of segment profit comprising revenue less cost of sales. 
 
Intersegment revenue is recorded at values which approximate third party selling prices and is not 
significant. 
 
                                Revenue            Net fees 
                             31 May    31 May   31 May    31 May 
 
                               2019      2018     2019      2018 
                              GBP'000     GBP'000    GBP'000     GBP'000 
Continental Europe          383,328   328,804   93,910    83,934 
UK&I                        124,662   131,721   23,779    26,501 
USA                         114,554    98,443   35,468    29,465 
APAC & ME                    30,724    26,972    9,832     8,495 
 
                            653,268   585,940  162,989   148,395 
 
Continental Europe primarily includes Austria, Belgium, France, Germany, Luxembourg, the 
Netherlands, Spain and Switzerland. 
 
APAC & ME mainly includes Australia, Dubai, Hong Kong, Japan, Malaysia and Singapore. 
 
Other information 
 
The Group's revenue from external customers, its net fees and information about its segment assets 
(non-current assets excluding deferred tax assets) by key location are detailed below: 
 
                          Revenue             Net fees 
 
                       31 May   31 May      31 May      31 May 
 
                         2019     2018        2019        2018 
                        GBP'000    GBP'000       GBP'000       GBP'000 
Germany               163,296  142,005      47,673      42,811 
Netherlands           126,512  109,015      24,738      22,371 
UK                    117,754  126,025      21,617      24,414 
USA                   114,554   98,443      35,468      29,465 
Other                 131,152  110,452      33,493      29,334 
 
                      653,268  585,940     162,989     148,395 
 
                                         Non-current assets 
                                            31 May     Audited 
 
                                                   30 November 
                                              2019        2018 
                                             GBP'000       GBP'000 
UK                                          12,054      14,354 
Germany                                        966       1,060 
USA                                            810       1,136 
Netherlands                                    721         803 
Other                                        1,216       1,148 
 
                                            15,767      18,501 
 
The following segmental analysis by brands, recruitment classification and sectors (being the 
profession of candidates placed) have been included as additional disclosure to the requirements 
of IFRS 8. 
 
                                Revenue      Net fees 
                             31 May   31 May   31 May   31 May 
 
                               2019     2018     2019     2018 
                              GBP'000    GBP'000    GBP'000    GBP'000 
Brands 
Progressive                 216,883  182,092   49,244   40,580 
Computer Futures            193,957  168,141   49,511   44,991 
Huxley Associates           121,849  122,942   28,762   29,306 
Real Staffing Group         120,579  112,765   35,472   33,518 
 
                            653,268  585,940  162,989  148,395 
 
Other brands including Global Enterprise Partners, JP Gray, Madison Black, Newington International 
and Orgtel are rolled into the above brands. 
 
                                          Reven     Net fees 
                                          ue 
                                   31 May    31  31 May   31 May 
                                            May 
 
                                     2019          2019     2018 
                                           2018 
                                    GBP'000 GBP'000   GBP'000    GBP'000 
Recruitment classification 
Contract                          610,563 544,0 121,098  106,705 
                                             62 
Permanent                          42,705 41,87  41,891   41,690 
                                              8 
                                  653,268 585,9 162,989  148,395 
                                             40 
 
                              Revenue          Net fees 
                           31 May   31 May   31 May   31 May 
 
                             2019     2018     2019     2018 
                            GBP'000    GBP'000    GBP'000    GBP'000 
Sectors 
Technology                310,501  270,691   73,111   66,488 
Life Sciences              97,536   90,748   31,532   30,594 
Energy                     88,362   75,976   18,379   14,013 
Banking & Finance          79,082   87,597   18,777   20,066 
Engineering                62,475   51,516   16,343   14,292 
Other                      15,312    9,412    4,847    2,942 
 
                          653,268  585,940  162,989  148,395 
 
Other includes Procurement & Supply Chain and Sales & Marketing. 
 
3) Administrative expenses - Exceptional items 
 
The expected benefits are being realised from the successful restructure and relocation of the 
majority of our London-based support functions to Glasgow. This restructuring is anticipated to 
 realise cost savings in excess of GBP5 million per annum. 
 
 Only immaterial net exceptional costs of GBP0.1 million have been recognised during the period in 
relation to the transition to the Centre of Excellence. The exceptional charge in the period 
included mainly personnel double-running costs of GBP0.2 million and property costs of GBP0.3 million. 
 These costs were subsequently offset by the government grant income of GBP0.4 million recognised as 
an offset to the exceptional costs of an agreed percentage of gross wages for each full time role 
 created in the Centre of Excellence, bringing the total net costs recognised to date to GBP13.2 
 million (HY 2018: GBP9.1 million). 
 
We do not expect to incur any further exceptional costs in the remainder of the year in respect of 
the move to Glasgow whilst the additional government grant is anticipated to be received and 
recognised as exceptional income in the period through to the end of 2021. 
 
On 14 December 2018, the Group communicated to the market that the Chief Executive Officer, Gary 
Elden, would step down from his role and the Board on 18 March 2019. The new Chief Executive 
Officer ('CEO'), Mark Dorman, joined the Group on 18 March 2019. The new CEO was appointed 
following Gary Elden stepping down from the role after leading the Company for six years. Mark was 
appointed after a rigorous process determined he was the best candidate to take the business 
forward to its next stage of growth and development. These Senior Management changes resulted in 
 the exceptional charge of GBP1.2 million in HY 2019. The total charge comprised contractual 
payments, recruitment and other professional fees, double running costs and relocation costs. 
 
Due to the material size and non-recurring nature of these strategic projects, the associated 
costs have been separately disclosed as exceptional items in the Consolidated Income Statement in 
line with the treatment in HY 2018. Disclosure of items as exceptional, highlights them and 
provides a clearer, comparable view of underlying earnings. 
 
Items classified as exceptional were as follows: 
 
                                                    31 May    31 
                                                             May 
 
                                                      2019 
                                                            2018 
Exceptional                                          GBP'000 GBP'000 
items - 
charged to 
operating 
profit 
Senior Management 
changes 
Contractual payments                                   731     - 
for CEO departure 
Recruitment and other                                  342     - 
professional fees 
Double running costs                                    56     - 
 
Relocation costs                                        60     - 
Total - Senior                                       1,189     - 
Management changes 
 
Support functions 
relocation 
Staff costs and                                        249 1,494 
redundancy 
Property costs                                         305   147 
Other                                                   29   793 
Grant income                                         (439)     - 
Total - Support functions relocation                   144 2,434 
Total net exceptional costs for the period           1,333 2,434 
 
4) Taxation 
 
Income tax for the half year is accrued based on management's best estimate of the average annual 
 effective tax rate for the financial year. The tax charge for the half year amounted to GBP6.2 
million (HY 2018: GBP4.9 million) at an effective rate of 27% (HY 2018: 27%). The effective tax rate 
on the pre-exceptional trading profits arising in the period is 27% (HY 2018: 26%). 
 
5) Dividends 
 
                                                   31 May 31 May 
 
                                                     2019   2018 
Amounts recognised as distributions to equity       GBP'000  GBP'000 
holders in the period 
 
Interim dividend of 4.7p (2017: 4.7p) per share     6,069  6,041 
Final dividend of 9.8p (2017: 9.3p)                12,722 11,976 
per share 
                                                   18,791 18,017 
 
2018 interim dividend of 4.7 pence (2017: 4.7 pence) per share was paid on 7 December 2018. 
 
2018 final dividend of 9.8 pence (2017: 9.3 pence) per share was approved by shareholders at the 
AGM on 24 April 2019 and has been included as a liability in this Interim Financial Report. The 
dividend was paid on 7 June 2019 to shareholders on record at 26 April 2019. 
 
2019 interim dividend of 5.1 pence per share was proposed and approved by the Board on 19 July 
2019 and has not been included as a liability as at 31 May 2019. It will be paid on 6 December 
2019 to shareholders on record at 1 November 2019. 
 

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6) Earnings per share 
 
The calculation of the basic and diluted earnings per share ('EPS') is set out below: 
 
Basic EPS is calculated by dividing the earnings attributable to owners of the Company by the 
weighted average number of shares in issue during the period excluding shares held as treasury 
shares and those held in the Employee Benefit Trust which are treated as cancelled. 
 
For diluted EPS, the weighted average number of shares in issue is adjusted to assume conversion 
of dilutive potential shares. Potential dilution resulting from tracker shares takes into account 
profitability of the underlying tracker businesses and SThree plc's earnings per share. Therefore, 
the dilutive effect on EPS will vary in future periods depending on any changes in these factors. 
 
                                                  31 May  31 May 
 
                                                    2019    2018 
                                                   GBP'000   GBP'000 
Earnings 
Profit for the period after tax                   17,526  14,956 
before exceptional items 
Exceptional items net of tax                     (1,080) (1,972) 
Profit for the period attributable                16,446  12,984 
to owners of the Company 
 
                                                 Million million 
 
Number of 
shares 
Weighted average number of shares                  129.9   128.7 
used for basic EPS 
Dilutive effect of share                             5.3     5.9 
plans 
Diluted weighted average number of shares          135.2   134.6 
used for diluted EPS 
 
                                                  31 May  31 May 
                                                    2019    2018 
                                                   pence   pence 
Basic 
Basic EPS before exceptional items                  13.5    11.6 
Impact of exceptional items                        (0.8)   (1.5) 
Basic EPS after exceptional items                   12.7    10.1 
 
Diluted 
Diluted EPS before exceptional                      13.0    11.1 
items 
Impact of exceptional items                        (0.8)   (1.5) 
Diluted EPS after exceptional items                 12.2     9.6 
 
7) Cash and cash equivalents 
 
                                                 31 May Audited 
 
                                                             30 
                                                        Novembe 
                                                              r 
                                                   2019    2018 
                                                  GBP'000   GBP'000 
Cash at bank                                     22,591  50,844 
Bank overdraft                                   (15,62 (17,521 
                                                     0)       ) 
 
Net cash and cash equivalents per the             6,791  33,323 
statement of cash flow 
 
Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of 
three months or less, net of outstanding bank overdrafts. The carrying amount of these assets is 
approximately equal to their fair values. 
 
The Group has cash pooling arrangements in place which allow any one account to be overdrawn up to 
 GBP50.0 million, so long as the overall pool of accounts do not exceed a net overdrawn position of 
 GBP5.0 million. 
 
8) Borrowings 
 
  The Group has access to a committed RCF of GBP50.0 million along with an uncommitted GBP20.0 million 
accordion facility in place with HSBC and Citibank, giving the Group an option to increase its 
 total borrowings under the facility to GBP70.0 million. The funds borrowed under the facility bear 
interest at a minimum annual rate of 1.3% (HY 2018: 1.3%) above the appropriate Sterling LIBOR. 
The average interest rate paid on the RCF during the year was 2.0% (HY 2018: 1.8%). The Group also 
 has an uncommitted GBP5 million overdraft facility with HSBC. 
 
  At the half year end, GBP15.0 million (H1 2018: GBP22.5 million) was drawn down on these facilities. 
 
The RCF is subject to certain covenants requiring the Group to maintain financial ratios over 
interest cover, leverage and guarantor cover. The covenants ratios are disclosed in the Group's 
2018 annual financial statements. The Group has been in compliance with these covenants throughout 
the current period. The RCF facility is available under these terms and conditions until 2023. 
 
The Group's exposure to interest rate, liquidity, foreign currency and capital management risks is 
disclosed in the Group's 2018 annual financial statements. 
 
Movements in borrowings are analysed as follows: 
 
                                                         GBP'000 
Opening amount as at 1 December 2017                    12,000 
Net drawings during the period                          11,089 
Changes to carrying amount due to RCF refinancing (1)    (636) 
Unaudited closing amount as at 31 May 2018              22,453 
Audited closing amount as at 30 November 2018           37,428 
Net repayments during the period                      (22,336) 
Changes to carrying amount due to RCF refinancing (1)     (92) 
                     Closing amount as at 31 May 2019   15,000 
 
 (1) GBP0.1 million (HY 2018: 0.6 million) million represents the unamortised amount of transaction 
costs including those incurred on renegotiating the facility. 
 
9) SHARE CAPITAL 
 
During the period 139,665 (H1 2018: 123,633) new ordinary shares were issued, resulting in a share 
premium of GBP0.3 million (H1 2018: GBP0.3 million). These shares were issued pursuant to the exercise 
of share awards under the Save As You Earn scheme. 
 
Treasury Reserve 
 
Treasury shares represent SThree plc shares repurchased and available for specific and limited 
purposes. 
 
In the six months ended 31 May 2019, none of its own shares were purchased by SThree plc treasury 
and no shares were utilised from treasury on settlement of Long Term Incentive Plan ('LTIP'), Save 
As You Earn ('SAYE') or Share Incentive Plan ('SIP') awards. At the period end, 1,045,334 (HY 
2018: 1,724,673) shares were held in treasury. 
 
Employee Benefit Trust 
 
The Group holds shares in the Employee Benefit Trust ('EBT'). The EBT is funded entirely by the 
Company and acquires shares in SThree Plc to satisfy future requirements of the employee 
share-based payment schemes. For accounting purposes shares held in the EBT are treated in the 
same manner as shares held in the treasury reserve by the Company and are, therefore, included in 
the financial statements as part of the treasury reserve for the Group. 
 
In the six months ended 31 May 2019, the EBT purchased 290,000 (HY 2018: 923,000) of SThree plc 
shares. The average price paid per share was 302 pence (HY 2018: 314). The total acquisition cost 
  of these shares was GBP0.9 million (HY 2018: GBP1.0 million), for which the treasury reserve was 
reduced. During the period, the EBT utilised 466,554 (HY 2018: nil) shares on settlement of LTIP 
awards. At the period end, the EBT held 1,146,783 (HY 2018: 1,419,407) shares. 
 
10) Contingent liabilities 
 
State Aid 
 
In June 2019, the UK government filed an annulment application with the European Union General 
Court, against the European Commission's decision of April 2019, that certain parts of the UK's 
Controlled Foreign Company regime gave rise to State Aid. The Group has historically relied on 
 this regime in certain jurisdictions. Our maximum potential liability is estimated at GBP3.2 
million. Given the UK government's annulment application, our assessment is that no provision is 
required in respect of this issue. Despite the annulment application, under EU law the UK 
government is still required to recover aid in line with the Commission's findings. In this event, 
we expect any agreed amount to be held in escrow, pending resolution of the legal process. 
 
Legal 
 
The Group has contingent liabilities in respect of legal claims arising in the ordinary course of 
business. Legal advice obtained indicates that it is unlikely that any significant liability will 
arise. The Directors are of the view that no material losses will arise in respect of legal claims 
that have not been provided against at the date of these interim financial statements. 
 
11) RELATED PARTY DISCLOSURES 
 
The Group's significant related parties are as disclosed in the Group's 2018 annual financial 
statements. There were no other material differences in related parties or related party 
transactions in the period compared to the prior period. 
 
12) Shareholder communications 
 
SThree plc has taken advantage of regulations which provide an exemption from sending copies of 
its interim report to shareholders. Accordingly, the 2019 interim report will not be sent to 
shareholders but will be available on the Company's website www.sthree.com [3] or can be inspected 
at the registered office of the Company. 
 
Financial Calendar 
 
        2019 
13 September                                  Q3 Trading update 
  1 November         Ex-dividend date for 2019 interim dividend 
 21 November                                Capital Markets Day 
 
 30 November                            2019 Financial Year end 
  6 December                         2019 Interim dividend paid 
 13 December Trading update for the year ended 30 November 2019 
 
        2020 
  27 January Annual results for the year ended 30 November 2019 
 
ISIN:           GB00B0KM9T71 
Category Code:  IR 
TIDM:           STHR 
LEI Code:       2138003NEBX5VRP3EX50 
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited 
                reviews 
Sequence No.:   14099 
EQS News ID:    844289 
 
End of Announcement EQS News Service 
 
 
1: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=f29150afce9c56f06eabb729e32aed06&application_id=844289&site_id=vwd&application_name=news 
2: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=eb7b14009f98936faf7731e1d1418cd7&application_id=844289&site_id=vwd&application_name=news 

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