SThree (STHR)

22-Jul-2019 / 07:00 GMT/BST

Dissemination of a RegulatoryAnnouncement 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

	HY2019		HY2018		Variance
	Adjusted (1)	Reported	Adjusted ( 2)	Reported	Movement (3)	Constant Currency Movement (4)
	£m	£m	£m	£m	%	%
Revenue	653.3	653.3	585.9	585.9	+12%	+10%
Contract net fees (5)	121.1	121.1	106.7	106.7	+13%	+12%
Permanent net fees	41.9	41.9	41.7	41.7	-	-1%
Net fees	163.0	163.0	148.4	148.4	+10%	+9%
Operatingprofit	24.6	23.3	20.4	18.0	+21%	+18%
OPConversion ratio (%)	15.1%	14.3%	13.7%	12.1%	+1.4%pts	+1.2%pts
Profit before taxation	24.0	22.7	20.3	17.8	+18%	+16%
Basic earnings per share	13.5p	12.7p	11.6p	10.1p	+16%	+14%
Interim dividend per share	5.1p	5.1p	4.7p	4.7p	+0.4p	-
(6) Net debt	(8.0)	(8.0)	(6.2)	(6.2)	-	-

(1) HY 2019 figures exclude the impact of £1.3 million in net exceptional str ategic restructuring costs and Senior Management change costs (2) HY 2018 figures exclude the impact of £2.4 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 theGroup's four regions, driving profitability Adjusted profit before taxup 18%YoYto £24.0 million (HY2018: £20.3 million)
- Reported profit before taxup 27%YoYto £22.7 million (HY2018: £17.8 million)
- 86%of net fees generated from our international business (HY2018: 82%)
- Strategic focus on Contract continuing to drive growth Contract represented 74%ofGroup net fees (HY2018: 72%)
- Contract ahead by12%* 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 bydeclines in UK&I and USA
- Investment in theGroup 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 majorityof our London-based support functions to Glasgow Interim dividend of 5.1p up 0.4p (HY2018: 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 USAand Continental Europe, as well as an increased Contractweighting.

"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 rapidlygrowing Permanent business in Japan, the strong performance for Energy in the US driven by trends to renewable energyand power transmission, and the strengthening of our market leading position in Life Sciences,where we continue to benefit from the emergence of new sector technologyand data analytics.

"To build on this growth, we are continuing to strategicallyinvest in the areas of the business which present the greatest opportunity, consistent with our vision to be the number one STEMtalent provider in the best STEMmarkets. 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 0930GMTtoday. 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. Please note that this is a listen only facility. An archive of the presentation will be available via the same link following the event.

Avideo overviewof the results from the CEO, MarkDorman, and CFO,AlexSmith, is available to watch here: http:/ bit.ly/STHRh1interview.

SThree will issue its Q3 trading update on 13 September 2019.

Enquiries:

SThree plc ⁰²⁰ ⁷²⁶⁸ ⁶⁰⁰⁰ MarkDorman,Chief ExecutiveOfficer AlexSmith,Chief Financial Officer KirstyMulholland,CompanySecretariat

Alma PR ⁰²⁰ ³⁴⁰⁵ ⁰²⁰⁵ Rebecca Sanders-Hewett [email protected] HilaryBuchanan

Notes toeditors

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, HuxleyAssociates and Real Staffing Group. The Group has circa 3,100 employees in sixteen countries.

SThree plc is quoted on theOfficial List of the UKListingAuthorityunder the ticker symbol STHRand also has a USAlevel oneADRfacility, 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 fromthose 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 fromthe announcement is sourced fromunaudited 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 CEOof 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 initiallyattracted me to theGroup; our purpose, the strong structural growth drivers in our markets, and the high qualityof 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 theGroup's focus on STEMand 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 nowrepresenting 74%ofGroup net fees.

Our purpose

Our purpose is central to everything we do as a business and is whywe 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 mycolleagues and I on a daily basis. As market trends shift and STEMskills 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 everincreasing demand for STEMworkers across all verticals. In the USA, according to the US Bureau of Labor Statistics, all STEMoccupations are projected to grow by 10.8% between ²⁰¹⁶ and ²⁰²⁶ (compared to projected growth of 7.2% for non-STEM occupations). Arecent survey of 25,000 businesses in Germany by The Association ofGerman Chambers of Commerce and Industrycited the shortage of skilled workers as their greatest risk, while ^a studybyBertelsmann predicts that the demand for STEMexperts inGermanywill growby1.4 million by2035.

Alongside this, the waywe work is structurally shifting, with the 'gig' economy, flexible ways of working, and the changing role of contractors becoming increasingly important. This is closelytied into highlyskilled roles,which underpin the STEMmarkets.

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 keycompetitive advantage and a significant barrier to entryfor 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 inApril. Doing nothing is not an option for organisations that relyupon flexible workers and as the leading provider of specialist STEMtalent, 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 activelyfed into the ongoing UKGovernmentConsultation.

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, predominantlyin Contract, in line with our strategic focus.Our people are high performing and driven, and ^I would like to take this opportunityto 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 amongstGermany's top midsized employers for the sixth consecutive year in ^a row,which shows howwell our own people rate our unique offering when it comes to excellentworking 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 thatwill drive growth.

Akey 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 technologywill continue to be a competitive differentiator going forward. Part of our strategyinvolves 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 identifythe 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 reviewwhich investments are likelyto 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 diversityacross geographies and STEMsectors 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 opportunityavailable in their markets brought about bygrowing 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 theGroup.

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 2019GROUP 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 activelymanaging our business in the UK, where broader macro pressures remain significant.

Our strategic focus on Contract continues to deliver good growth across our keysectors and regions, as well as providing greater resilience in more uncertain economic conditions. Contract net fees were up 12%* in H1 YoYand up 13%* in Q2,with Continental Europe,USAand 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 sawstrong growth in DACHand our small, fast-growing business in Japan. Adjusted Operating Profit was up 18%* YoYand 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 majorityof our London-based support functions toGlasgow.

Our investment in headcount, the qualityof 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 strategyoutlined at the Capital Markets Dayin November 2017.

Group

				HY2019 Mix	Average Sales Headcount GrowthYoY
	Cont Perm	Total	Cont	Perm	Cont	Perm	Total
Q1 19 +12%	+1%	+9%			+8%	-4%	+4%
Q2 19 +13%	-2%	+9%			+13%	+5%	+10%
HY19 +12%	-1%	+9%	74%	26%	+11%	-	+7%


Breakdownof net fees HY2019 HY2018 FY2018
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 STEMmarket focus and geographical mixand it remained the keyarea 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 22 nd consecutive quarter of net fees growth achieved byContract since itwas given greater strategic focus. The period ended with contractor numbers of 10,749, up 4%YoY. Permanent net fees were marginallylower with UK&I and USAnet fees declining, reflecting the previouslyreported UKrestructuring 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 stronglyas we look to invest in this business further. Average Permanent fees were up 1%* YoY as we focus on specialist recruitment. We expect to strategicallyinvest in Permanent in the remainder of 2019, predominantlyin USA,DACHand Japan.

We have seen strong growth in Contract across most regions. 86%of theGroup net fees are nowgenerated from outside the UK&I with our largest regions growing well.

Continental Europe (58%ofGroupnet fees)

				HY2019 Mix	Average Sales Headcount GrowthYoY
	Cont Perm	Total	Cont	Perm	Cont	Perm	Total
Q1 19 +14%	+6%	+12%			+12%	-	+8%
Q2 19 +17%	+5%	+14%			+13%	+4%	+10%
HY19 +16%	+5%	+13%	74%	26%	+13%	+2%	+9%
* Variances are held in constant currency

Continental Europe is our largest region comprising businesses inGermany, Switzerland,Austria,Netherlands, Belgium, France, Luxembourg and Spain.

The region delivered strong growth in the period with increasing net fees across all main countrymarkets. DACH, our largest territoryin the region was up 15%* YoY and we continued to invest with average headcount up 8%.Netherlands also performed strongly, with net fees ahead by11%* YoYand average sales headcount up 15%.Contract growth in Technology, our largest sector,was verystrong, up 19%*. This was supported byEngineering,which grew40%*.

The region delivered double digit growth in contractors, up 12%YoY, creating growth opportunities for H2,with Net Fees per DayRate ('NFDR') up by1%*.Net fees in this region performed particularlywell against verystrong prior year comparatives.

Growth was also delivered in Permanent, driven by DACHup 9%*. This was in part down to an increase in average fees for Technology, Banking and Finance alongside Energy.

USA(22%ofGroupnet fees)

				HY2019 Mix	Average Sales Headcount GrowthYoY
	Cont Perm	Total	Cont	Perm	Cont	Perm	Total
Q1 19 +24%	-1%	+17%			+7%	-3%	+4%
Q2 19 +21%	-15%	+10%			+11%	+14%	+12%
HY19 +22%	-10%	+13%	78%	22%	+9%	+5%	+8%
* Variances are held in constant currency

The USAis 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 STEMroles in the region continue to be highlysought after and are projected to growby10.8%between ²⁰¹⁶ and 2026.

Growth of 13%* YOYin the region was across our major sectors Technology, Life Sciences and Energy. Life Sciences, our largest sector in the region, grew 10%* YoY. Energycontinued to improve in the region up 68%* with Technologyup 10%*.

Contract net fees in USAwere 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 DayRate ('NFDR') increased by28%* YoY, as we focused on higher margin and higher salaryroles.

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%* YoYwith all sectors experiencing growth. Year to date average headcount also increased by5%YoY.

UK&I (14%ofGroupnet fees)

		Net fees Growth* YoY			HY2019 Mix	Average Sales Headcount GrowthYoY
	Cont Perm Total			Cont	Perm	Cont	Perm	Total
Q1 19 -5%		-16%	-7%			-	-29%	-8%
Q2 19 -7%		-32%	-12%			+12%	-12%	+5%
HY19 -6%		-25%	-9%	84%	16%	+6%	-22%	-2%
* 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 previouslyreported restructuring, net fees in the region were down 9%* YoY,with ^a 2% YoYreduction 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 increasinglyContract focused as we have cautiouslyinvested in specific opportunities within the STEMmarket. 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 halfwe made the decision to strategically invest in our Contract business with average sales headcount up 6%YoY. We anticipate this headcountwill become productive in the second half of the year. Contractors for the region were down 4%YoY, however we sawour NFDRup 1%*, reflecting the increasinglytargeted 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 headcountwas down 22% YoY. Our move to a specialist hub and onshore deliverymodel is nowin place and we will continue to cautiouslybuild our presence in keysectors to maximise opportunity.

APAC& ME(6%ofGroupnet fees)

	Net fees Growth* YoY			HY2019 Mix	Average Sales Headcount GrowthYoY
	Cont Perm	Total	Cont	Perm	Cont	Perm	Total
Q1 19 +16%	-3%	+5%			+11%	+21%	+17%
Q2 19 +14%	+26%	+20%			+20%	+20%	+20%
HY19 +15%	+11%	+13%	43%	57%	+15%	+21%	+18%
* Variances are held in constant currency

net fees, a Japasnli,ght increase Our from 5%Australia, at APAC the Singapore

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% YoYin the region,with NFDRdown 2%* YoY.

Growth in Permanent net fees in the region was primarilydriven byJapan, which was up 49%* YoY,with strong growth in Life Sciences and Technology. We invested in Permanent headcount in Japan where average sales headcountwas up 65%.

Average headcountwas up 18%YoYwith Contract up 15%YoYand 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

end of 2018.

The Group sawgood 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 sawrobust growth.

Technology(45%ofGroupnet fees)

		Net fees Growth* YoY			HY2019 Mix	Average Sales Headcount GrowthYoY
	Cont Perm Total			Cont	Perm	Cont	Perm	Total
Q1 19 +9%		+11%	+10%			+9%	+3%	+8%
Q2 19 +13%		+7%	+12%			+15%	+11%	+14%
HY19 +11%		+9%	+11%	75%	25%	+12%	+7%	+11%
* Variances are held in constant currency

Technologyis our largest and most established sector representing, 45%of theGroup net fees and 48%of the Group average sales headcount, with the majorityof 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 Technologywas up 11% YoY, with Contract growing 12% YoYand Permanent up 7% YoY. The mix in headcount is weighted towards Contract which accounts for 71%of total Technologyheadcount.

Life Sciences (19%ofGroupnet fees)

Q2 19	+11%	+3%	+8%			+3%	+2%	+3%
HY19	+8%	-	+6%	69%	31%	+1%	-5%	-1%

* Variances are held in constant currency

Our Life Sciences sector is a market leader across several of our regions and Life Sciences represented 19%ofGroup net fees in the period. Total net fees grew by 6%* YoYwith Contract growing 8%* YoYand Permanent remaining flat*. Contract performance was pleasing and was up across all regions.Contractors increased 7%YoYwith 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 abilityof our highlyskilled people to find the best candidates to support the business and capitalise on the market opportunity.

Banking&Finance (12%ofGroupnet fees)

			Net fees		Average Sales Headcount
	Growth* YoY					HY2019 Mix	GrowthYoY
	Cont	Perm		Total	Cont	Perm	Cont	Perm	Total
Q1 19	-6%	+1%	-3%				+7%	-1%	+3%
Q2 19	-12%	-16%	-13%				+1%	-	-
HY19	-9%	-8%	-9%		58%	42%	+4%	-	+2%

* Variances are held in constant currency

Banking & Finance net fees were down 9%* YoYwith 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 bybroader political uncertainty. Average headcount for the sector was up 2%YoY.

Energy(11%ofGroupnet fees)

		Net fees Growth* YoY			HY2019 Mix	Average Sales Headcount GrowthYoY
	Cont Perm Total			Cont	Perm	Cont	Perm	Total
Q1 19 +26%		-4%	+25%			+1%	+28%	+2%
Q2 19 +30%		+20%	+29%			+10%	+67%	+13%
HY19 +28%		+10%	+27%	95%	5%	+6%	+47%	+8%
* Variances are held in constant currency

Energyrepresented 11% ofour overall Group net fees and the sector has shown good growth. Net fees in the sector were up 27%* YoY. Contract which represents 95% ofour Energy net fees grew28%* 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%* YoYdriven by the USAwhich successfully repositioned to placing more niche roles within power transmission and renewables. Continental Europe and USAaccount for 85%of our total net fees in the sector - USAsaw growth of 68%* YoYwith Continental Europe remaining flat*. Our Dubai business grew by9%* YoY. Average sales headcountwas up 8%YoYand we will continue to review the Energybusiness and selectivelyinvest where we can maximise market opportunities.

Engineering(10%ofGroupnet fees)

	Net fees Growth* YoY			HY2019 Mix	Average Sales Headcount GrowthYoY
	Cont Perm	Total	Cont	Perm	Cont	Perm	Total
Q1 19 +39%	-17%	+19%			+28%	+1%	+19%
Q2 19 +18%	-17%	+9%			+40%	+6%	+28%
HY19 +27%	-17%	+14%	78%	22%	+34%	+3%	+23%

* Variances are held in constant currency

Engineering represented 10%ofGroup net fees and grew strongly, with net fees up by14%* YoY. The sector is heavilyweighted 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 currencybasis to £653.3 million (HY2018: reported £585.9 million) and up 12% on a reported basis. On a constant currencybasis, net fees increased by9%, and on a reported basis by10%to £163.0 million (HY2018 £148.4 million).Growth in revenue exceeded the growth in net fees as the business continued to shift towards Contract.Contract represented 74%of theGroup net fees in the period (HY2018: 72%). This change in mixresulted 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 slightlyto 19.8%(HY2018: 19.6%).

The reported profit before taxwas £22.7 million, up 27%. The adjusted profit before tax ('PBT') was £24.0 million up 18% YoY(HY2018: reported £17.8 million and adjusted £20.3 million). The 'adjusted' PBT excludes restructuring costs of £1.3 million that were incurred in the current period in respect of the Senior Management changes and relocation of support functions to Glasgow (HY2018: £2.4 million). The benefits of operational efficiencies delivered bythe 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 (HY2018: 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 £5 million per annum.

Onlyimmaterial net exceptional costs of £0.1 million have been recognised during the period in relation to the transition to the Centre of Excellence. The exceptional charge in the period included mainlypersonnel double-running costs of £0.2 million and propertycosts of £0.3 million. These costs were subsequentlyoffset bythe government grant income of £0.4 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 £13.2 million (HY2018: £9.2 million).

We do not expect to incur anyfurther 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'), MarkDorman, joined the Group on ¹⁸ March 2019. The new CEOwas appointed following GaryElden stepping down from the role after leading the Companyfor sixyears. Markwas 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 £1.2 million in HY2019. 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.

Areconciliation of profit before taxon an adjusted basis to reported basis

	HY2019	HY2018	Variance
	£m	£m	£m
Reported profit before taxafter exceptional items	22.7	17.9	4.8
Net exceptional costs - charged to operating profit	1.3	2.4	(1.1)
(i) Senior Management changes	1.2	-	1.2
(ii) Support functions relocation	0.1	2.4	(2.3)
Reported profit before taxand exceptional items ('Adjusted')	24.0	20.3	3.7

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.

IFRS9 introduced newrequirements 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 IFRS9, 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 theGroup's existing impairment methodologyfor trade receivables.

IFRS15, a newrevenue recognition standard effective for theGroup 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. Accordingly, on 1 December 2018 the Group revised the waythe Contract accrual income is estimated. This change resulted in a net (post-tax) adjustment of £2.4 million that reduced the opening balance of retained earnings on the date of initial application of IFRS15.

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 £1.0 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 earlymarket 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 sixmonths to 31 May2019, our investments in The Sandpit Limited and separately in Ryalto have been written down by£0.8 million and £0.2 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 equityrights was caused bythe dilution in the existing shareholders' ownership ofRyalto as a result of the companyissuing newequity.

Taxation

The tax charge on pre-exceptional statutory profit before tax for the period was £6.5 million (HY2018: £5.3 million), representing an effective tax rate ('ETR') of 27% (HY2018: 26%). The ETRon post-exceptional statutoryprofit before taxwas 27%(HY2018: 27%).

The ETR primarily reflects our geographical mix of profits. Other material items affecting the tax charge include the European Union's Anti-TaxAvoidance Directive, and US Tax Reform. TheGroup 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 (HY2018: adjusted 11.6 pence and reported 10.1 pence), due to an increase in the adjusted profit before taxoffset byan increase of 1.2 million in weighted average number of shares. On ^a reported basis, EPSincreased 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 grewto 129.9 million (HY2018: 128.7 million). Reported diluted EPSwas 12.2 pence (HY2018: 9.6 pence), up 2.6 pence. Share dilution mainlyresults 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 profitabilityof the underlying tracker businesses, the volume of newtracker arrangements created and the settlement of vested arrangements.

Dividends

The Board proposes to payan interim dividend of 5.1 pence (HY2018: 4.7 pence), amounting to approximately£6.7 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 £12.0 million (HY 2018: £7.5 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 £1.2 million (HY2018: £3.1 million) with lower spend on office moves and IT infrastructure. Within the sixmonths ended 31 May 2019, the bulk of the capital expenditure was in relation to newIThardware, £0.5 million.

Overall, the cash conversion ratio increased to 44% on an adjusted basis and 39% on a reported basis (HY2018: 22% on an adjusted basis or 13% on a reported basis). The net cash outflowfrom exceptional restructuring items was £1.6 million (HY2018: £2.1 million).

Income tax paid decreased to £6.3 million (HY2018: £7.4 million) and dividends remained largely unchanged at £6.1 million (HY 2018: £6.0 million). During the period, the Group also paid £0.9 million (HY2018: £1.0 million) for the purchase of its own shares to satisfy employee share schemes in future periods. Foreign exchange had a moderate positive impact of £0.5 million (HY2018: positive impact of £0.2 million).

We started the period with net debt of £4.1 million and closed the period with net debt of £8.0 million (HY2018: net debt £6.2 million).

Areconciliation of cash conversion ratio on an adjusted basis to reported basis

		HY2019	HY2018
	Adjusted	Reported	Adjusted	Reported
Cash flows from operating activities	£m	£m	£m	£m
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 inworking capital	(17.0) ( 3)	(17.6)	(18.0) (4)	(17.7)
Cash generated from operations	12.0	10.4	7.5	5.4
Capex	(1.2)	(1.2)	(3.1)	(3.1)
Cash conversion ratio (%)	44%	39%	22%	13%

(1) Excludes £1.3 million in exceptional costs (HY 2018: £2.4 million)

(4) Excludes £0.3 million in a net increase in exceptional provision

(2) Excludes £0.3 million in IFRS 2 charge classified as exceptional (HY 2018: £nil) (3) Added back £0.6 million in a net decrease in exceptional provision

Treasurymanagement We finance the Group's operations through equity and bank borrowings. The Group's cash management policy is to minimise interest payments by closely managingGroup cash balances and external borrowings. We intend to continue this strategywhile maintaining ^a strong balance sheet position. We maintain ^a committed Revolving Credit Facility ('RCF') of £50.0 million, along with an uncommitted £20.0 million accordion facility, with HSBC and Citibank, giving the Group an option to increase its total borrowings under the facility to £70.0 million. At the half year, the Group had drawn down £15.0 million (HY 2018: £22.5 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 £0.6 million (HY 2018: £0.3 million).

TheGroup also has an uncommitted £5.0 million overdraft facilitywith 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 USDollar. For HY2019, the YoYmovements 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 USDollar. The exchange rate movements increased our reported HY2019 net fees by approximately £1.6 million and operating profit by£0.4 million. Exchange rate movements remain ^a material sensitivity. Bywayof illustration, each one per cent movement in exchange rates of the Euro and the USDollar against Sterling impacted our HY2019 net fees by£0.9 million and £0.4 million, respectively, and operating profit by£0.3 million and £0.1 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 2018Annual Report, a copyofwhich is available on theGroup's website www.sthree.com. 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 anyone specific economy, although ^a downturn in ^a particular market could adversely affect theGroup's keyrisk factors.

In the viewof the Board, there is no material change expected to theGroup's keyrisk 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 bythe European Union; and

(b) the Interim ManagementReport includes a fair review of the information required by the Disclosure and TransparencyRules ('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 sixmonths 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 sixmonths of the financial year).

The Directors of SThree Plc are listed in the SThree PlcAnnual Report for ³⁰ November 2018. Alist of the current Directors is maintained on the Group's website www.sthree.com.

Approved bythe Board 19 July2019 and signed on its behalf by:

MarkDorman AlexSmith Chief ExecutiveOfficer Chief Financial Officer

CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT

CONDENSED CONSOLIDATED INCOME STATEMENT - UNAUDITED for the half year ended 31 May2019

				31 May2019			31 May2018
	Note	Before exceptional items £'000	Exceptional items £'000	Total £'000	Before exceptional items £'000	Exceptional items £'000	Total £'000

Revenue	2	653,268	-	653,268	585,940	-	585,940
Cost of sales		(490,279)	-	(490,279)	(437,545)	-	(437,545)
Net fees	2	162,989	-	162,989	148,395	-	148,395
Administrative expenses	3	(138,383)	(1,333)	(139,716)	(127,998)	(2,434)	(130,432)
Operatingprofit		24,606	(1,333)	23,273	20,397	(2,434)	17,963
Finance income		29	-	29	46	-	46
Finance costs		(628)	-	(628)	(313)	-	(313)
Gain on disposal of associate		-	-	-	146	-	146
Profit before taxation		24,007	(1,333)	22,674	20,276	(2,434)	17,842
Taxation	4	(6,481)	253	(6,228)	(5,320)	462	(4,858)
Profit for the periodattributable toowners of the Company		17,526	(1,080)	16,446	14,956	(1,972)	12,984
Earnings per share	6	pence	pence	pence	pence	pence	pence
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 May2019

	Note	31 May 2019 £'000	31 May 2018 £'000
Profit for the period		16,446	12,984
Other comprehensive income: Items that may be subsequently reclassified to profit or loss: Exchange differences on retranslation of foreign operations		220	680
Items thatwill not be subsequently reclassified to profit or loss: Net loss on equityinstruments at fair value through other comprehensive income	1	(983)	-
Other comprehensive income for the period (net of tax)		(763)	680

Total comprehensive income for the periodattributable toowners of the Company 15,683 13,664

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 May2019

		31 May	Audited 30 November
		2019	2018
	Note	£'000	£'000
ASSETS
Non-current assets Property, plant and equipment		6,136	6,915

Investments	1	1,017	1,977
Deferred taxassets		2,633	2,750
		18,400	21,251

Current assets
Trade and other receivables		270,383	285,618
Current taxassets		2,099	2,751
Cash and cash equivalents	7	22,591	50,844
		295,073	339,213
Total assets		313,473	360,464

EQUITYANDLIABILITIES
Equityattributable toowners of the Company
Share capital	9	1,321	1,319
Share premium		30,795	30,511
Other reserves		(5,408)	(5,275)
Retained earnings		70,544	75,116
Total equity		97,252	101,671

Non-current liabilities
Provisions for liabilities and charges		1,465	1,569
Current liabilities
Borrowings	8	15,000	37,428
Bank overdraft	7	15,620	17,521
Provisions for liabilities and charges		8,854	9,614
Trade and other payables		175,282	191,742
Current taxliabilities		-	919
		214,756	257,224
Total liabilities		216,221	258,793

Total equityandliabilities		313,473	360,464

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

Auditedbalance at 30	Share capital £'000	Share premium £'000	Capital redemption reserve £'000	Capital reserve £'000	Treasury reserve £'000	Currency translation reserve £'000 (1,067)	Fair value reserve of equity investments £'000	Retained earnings £'000	Total equity attributable to owners of the Company £'000
November 2017	1,317	28,806	168	878	(8,535)	(1,083)	-	59,138	80,705
Profit for the half year ended 31 May2018 Other comprehensive income for the period	- -	- -	- -	- -	- -	- 680	- -	12,984 -	12,984 680
Total comprehensive income for
the period Dividends paid to equityholders (note 5)	- -	- -	- -	- -	- -	680 -	- -	12,984 (6,041)	13,664 (6,041)
Dividends payable to equity
holders (note 5) Settlement of vested tracker	-	-	-	-	-	-	-	(11,976)	(11,976)
shares	-	-	-	-	121	-	-	(212)	(91)
Settlement of share-based
payments Purchase of own shares by	2	349	-	-	-	-	-	-	351
Employee Benefit Trust (note 9) Credit to equityfor equity-settled	-	-	-	-	(989)	-	-	-	(989)
share-based payments	-	-	-	-	-	-		1,577	1,577
Totalmovements inequity	2 X222	349	-	-	(868)	680	-	(3,668)	(3,505)

Unauditedbalance at 31 May 2018	1,319	29,155	168	878	(9,403)	387	-	55,470	77,200
Auditedbalance at 30
November 2018	1,319	30,511	172	878	(7,830)	1,505	-	75,116	101,671
Effect of a change in accounting
policy(note 1) Restatedtotal equityat 1	-	-	-	-	-	-	-	(2,392)	(2,392)
December 2018	1,319	30,511	172	878	(7,830)	1,505	-	72,724	99,279
Profit for the half year ended 31 May2019	-	-	-	-	-	-	-	16,446	16,446
Other comprehensive income
for the period (note 1)	-	-	-	-	-	220	(983)	-	(763)
Total comprehensive income for
the period Dividends paid to equityholders	-	-	-	-	-	220	(983)	16,446	15,683
(note 5)	-	-	-	-	-	-	-	(6,069)	(6,069)
Dividends payable to equity
holders (note 5) Settlement of share-based	-	-	-	-	-	-	-	(12,722)	(12,722)
payments	2	284	-	-	1,507	-	-	(1,507)	286
Purchase of own shares by
Employee Benefit Trust (note 9) Credit to equityfor equity-settled	-	-	-	-	(877)	-	-	-	(877)
share-based payments	-	-	-	-	-	-	-	1,672	1,672
Totalmovements inequity	2	284	-	-	630	220	(983)	(2,180)	(2,027)
Unauditedbalance at 31 May 2019	1,321	30,795	172	878	(7,200)	1,725	(983)	70,544	97,252

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 May2019
	31 May		31 May
		2019	2018
	Note	£'000	£'000
Cashflows fromoperatingactivities
Profit before taxation after exceptional items		22,674	17,842
Adjustments for:
Depreciation and amortisation charge		3,001	2,787
Accelerated amortisation and impairment of intangible assets		-	724
Finance income		(29)	(46)
Finance cost		628	313
Loss on disposal of property, plant and equipment		8	8

	-	70
		(146)
		(29)
	1,672	1,577
		23,100
		(7,960)
		(8,916)
	(916)	(777)

		5,447
		25
		(7,445)
	3,980	(1,973)
		127
		(2,100)
		(1,973)


		(1,718)
		(1,380)
	(1,241)	(3,098)

		10,453
		(313)
		-
		342
		(989)
5	(6,069)	(6,041)
		3,452

		(1,619)
		17,621
		225
7	6,971	16,227
	8	- (5) 27,949 3,187 (19,905) 10,315 10 (6,345) 5,606 (1,626) 3,980 (721) (520) (22,428) (570) 70 286 (877) (29,588) (26,849) 33,323 497

The accompanying notes on pages 16-25 form an integral part of this Interim Financial Report.

NOTES TO THECONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT - UNAUDITED for the half year ended 31 May2018

1. ACCOUNTING POLICIES

Corporate Information SThree plc ('the Company') and its subsidiaries (collectively 'the Group') operate predominantly in the United Kingdom & Ireland, Continental Europe,USAand Asia Pacific & Middle East. The Group consists of different brands and provides both Permanent and Contract specialist recruitment services, primarilyin 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, EC4N7BE.

This Condensed Consolidated Interim Financial Report ('Interim Financial Report') of the Group as at and for the half year ended ³¹ May2019 comprises that of the Companyand all its subsidiaries. The Interim Financial Report is unaudited and has not been reviewed byexternal auditors. It does not constitute statutoryaccounts 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 January2019 and a copywas delivered to the Registrar of Companies. The auditors reported on those accounts, their report was unqualified, did not draw attention to anymatters bywayof emphasis and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The Interim Financial Report of theGroup was approved bythe Board for issue on 19 July2019.

Basisof preparation

This Interim Financial Report for the half-year reporting period ended 31 May2019 has been prepared in accordance with the Disclosure and TransparencyRules 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 bythe 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 May2019.

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, theycontinue 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 newand 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:

IFRS9 Financial instruments

IFRS15 Revenue from Contractswith 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 not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

IFRS2 (amendments) Share Based Payments

IFRIC22 Foreign Currency Transactions and Advance Consideration

IFRIC23 Uncertainty over Income Tax Treatments

The impact and timing of the adoption of IFRS16 Leases is disclosed below. The Directors are currentlyevaluating the impact of the adoption of all other standards, amendments and interpretations, but do not expect them to have a material impact onGroup operations or results

IFRS16 Leases

IFRS16 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 everylease brought onto the balance sheet, lessees will recognise a right-of-use asset and a lease liability. The onlyexceptions are short-term and lowvalue leases.

Within the income statement, operating lease rental payment will be replaced bydepreciation 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 bya range of £3 million to £4 million (a net result of the recognition of lease assets at approximately£35 million to £40 million offset bylease liabilities of £38 million to £44 million).

The new leasing standard is mandatory for first interim period within the annual reporting periods beginning on or after 1 January2019. The Group does not intend to adopt the standard before its effective date. TheGroup will transition to IFRS16 on a modified retrospective basis in the financial reporting period commencing on 1 December 2019.

Changes inaccountingpolicies 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.

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 policywas recognised in the opening balance of retained earnings on 1 December 2018.

The following tables showthe adjustments recognised for each individual line item. Line items thatwere not affected bythe changes have not been included.

				30 November 2018 IFRS9 IFRS15 1 December 2018
Impact onthe statement of financial position(increase/(decrease)) (extract)		£'000 £'000	£'000	£'000
Current assets
Trade and other receivables	285,618		- (13,017)	272,601
Current taxassets	2,751	-	766	3,517
	288,369		- (12,251)	276,118
Current liabilities
Trade and other payables	191,742		- (9,859)	181,883
Equity
Retained earnings	75,116		- (2,392)	72,724

(b) IFRS9 - 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 IFRS9 adoption, the adjustment to the opening balance of retained earnings or other reserves at 1 December 2018 was not recognised.

(i) Classificationandmeasurement

On the date of initial application of IFRS 9, the Directors assessed which business models were applicable to the financial assets held bythe 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 (Available-for-sale)	Trade andother receivables
Financial assets - 1 December 2018	£'000	£'000	£'000
Closingbalance 30 November 2018 - IAS39*	-	1,977	285,618
Reclassify debt investments fromavailable-for-sale to FVTPL (note (i.a))	435	(435)	-
Reclassify equity investments fromavailable-for-sale to FVOCI*(note (i.b))	-	-	-
Adjustments arising fromthe adoption of IFRS15 (note (d))	-	-	(13,017)
Openingbalance 1 December 2018 - IFRS9	435	1,542	272,601

*The closing balances as at 30November 2018 show available-for-sale financial assets under FVOCI.

(i.a) Reclassificationfromavailable-for-sale toFVTPL Certain investments in convertible bonds with the embedded conversion rights were reclassified from available-for-sale to financial assets at FVTPL (£0.4 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 solelypayments 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 sixmonths ended to ³¹ May2019, 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 classifiedas available-for-sale

The Group elected to present changes in the fair value of all its equityinvestments in OCI, as theyare held for long-term strategic purposes.As a result, assets with the carrying value of £1.5 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 equityportfolio at £1.7 million. This represented an immaterial uplift from the carrying value of £1.5 million under IAS39, resulting in £nil impact on retained earnings at 1 December 2018.

However, in the six months to 31 May 2019, the Directors wrote off £0.8 million in relation to the investment in The Sandpit Limited and £0.2 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 equityrights was caused bythe dilution in the existing shareholders' ownership ofRyalto as a result of the companyissuing newequity. The amount of the write-offwas recognised inOCI.

(ii) Impairment of financial assets

TheGroup has two types of financial assets that are subject to IFRS9's newexpected credit loss model: trade receivables and cash and cash equivalents.

The Directors determined that theGroup's existing impairment methodologyfor trade receivables is overall compliantwith IFRS9.

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 IFRS9.

The loss allowances increased by a further £0.9 million to £3.6 million for trade receivables during the sixmonths to 31 May 2019. The increase would have been same under the incurred loss model of IAS39.

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 £nil impact on retained earnings at 1 December 2018.

(c) IFRS9 - Accountingpolicies appliedfrom1 December 2018

(i) Classificationof investments andother financial assets

From 1 December 2018, theGroup classifies its financial assets in the following measurement categories:

those to be measured subsequentlyat fair value (either throughOCI, 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 theGroup has made an irrevocable election at the time of initial recognition to account for the equityinvestment at FVOCI.

(ii) Measurement of investments andother 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 entiretywhen determining whether their cash flows are solelypayment 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 theGroup'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 equityinvestments measured at FVOCI are not reported separatelyfrom 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, theGroup 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.Anyinterest 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. Again or loss on a debt investment that is subsequently measured at FVTPL is recognised in the income statement and presented belowoperating 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) IFRS15 - 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 IFRS15, 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 £2.4 million was made to the opening balance of retained earnings, to recognise a newpolicyof estimating accrued income.

The following adjustments were made to the amounts recognised in the statement of financial position at the date of initial application:

	IAS18		IFRS15
		30 November 2018 Re-measurements 1 December 2018
	£'000	£'000	£'000
Trade and other receivables (Accrued income only)	78,741	(13,017)	65,724
Trade and other payables (Accruals only)	(107,105)	9,859	(97,246)
Current taxassets	2,751	766	3,517
Post-tax adjustment at the date of initial application of IFRS15		(2,392)

The impact on theGroup's retained earnings at 1 December 2018 is as follows:

	2018
	£'000
Retainedearnings prior toadjustment	75,116
Restatement of accrued income	(13,017)
Restatement of accrued cost of sales	9,859
Taxadjustment to retained earnings from adoption of IFRS15	766
Openingretainedearnings 1 December fromadoptionof IFRS15

(e) IFRS15 - Accountingpolicies appliedfrom1 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 policyof estimating accrued income/cost historicallyresulted 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 £13.0 million and £9.9 million lower respectively. This resulted in a net adjustment to the opening balance of retained earnings of £3.1 million pretax.

Critical accounting judgements and key sourcesof 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 mayultimatelydiffer 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 uncertaintywere 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 bythe 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 theGroup's 2018 annual financial statements.

Revenue and net feesby 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.Net fees are the measure of segment profit comprising revenue less cost of sales. Intersegment revenue is recorded at values which approximate third partyselling prices and is not significant.

	Revenue		Net fees
	31 May 2019	31 May 2018 £'000 £'000	31 May 2019 £'000	31 May 2018 £'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 primarilyincludes Austria, Belgium, France,Germany, Luxembourg, the Netherlands, Spain and Switzerland.

APAC&MEmainlyincludes 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 2019	31 May 2018	31 May 2019	31 May 2018
	£'000	£'000	£'000	£'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 2019 £'000	Audited 30 November 2018 £'000
UK	12,054	14,354
Germany	966	1,060
USA	810	1,136
Netherlands	721	803
Other	1,216	1,148

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 IFRS8.

	Revenue		Net fees
	31 May 2019 £'000	31 May 2018 £'000	31 May 2019 £'000	31 May 2018 £'000
Brands
Progressive	216,883	182,092	49,244	40,580
Computer Futures	193,957	168,141	49,511	44,991
HuxleyAssociates	121,849	122,942	28,762	29,306
Real StaffingGroup	120,579	112,765	35,472	33,518
	653,268	585,940	162,989	148,395

Other brands includingGlobal Enterprise Partners, JPGray, Madison Black,Newington International andOrgtel are rolled into the above brands.

	Revenue		Net fees
	31 May 2019 £'000	31 May 2018 £'000	31 May 2019 £'000	31 May 2018 £'000
Recruitment classification
Contract	610,563	544,062	121,098	106,705
Permanent	42,705	41,878	41,891	41,690
	653,268	585,940	162,989	148,395

	Revenue		Net fees
	31 May 2019 £'000	31 May 2018 £'000	31 May 2019 £'000	31 May 2018 £'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 &SupplyChain and Sales &Marketing.

3. ADMINISTRATIVE EXPENSES -EXCEPTIONAL ITEMS

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.

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 HY2018. 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 2019	31 May 2018
Exceptional items - chargedtooperatingprofit	£'000	£'000
Senior Management changes
Contractual payments for CEOdeparture	731	-
Recruitment and other professional fees	342	-
Double running costs	56	-
Relocation costs	60	-
Total - Senior Management changes	1,189	-
Support functions relocation
Staff costs and redundancy	249	1,494
Propertycosts	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 taxfor the half year is accrued based on management's best estimate of the average annual effective taxrate for the financial year. The taxcharge for the half year amounted to £6.2 million (HY2018: £4.9 million) at an effective rate of 27%(HY2018: 27%). The effective taxrate on the pre-exceptional trading profits arising in the period is 27%(HY2018: 26%).

5. DIVIDENDS

Amounts recognisedas distributions toequityholders inthe period	31 May 2019	31 May 2018
	£'000	£'000
Interim dividend of 4.7p (2017: 4.7p) per share	6,069	6,041
Final dividend of 9.8p (2017: 9.3p) per share	12,722	11,976
	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 theAGMon 24April 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 26April 2019.

2019 interim dividend of 5.1 pence per share was proposed and approved bythe Board on 19 July2019 and has not been included as a liabilityas at 31 May2019. Itwill be paid on 6 December 2019 to shareholders on record at 1 November 2019.

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 treasuryshares and those held in the Employee Benefit Trustwhich 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 profitabilityof the underlying tracker businesses and SThree plc's earnings per share. Therefore, the dilutive effect on EPSwill vary in future periods depending on anychanges in these factors.

	31 May	31 May
	2019	2018
	£'000	£'000
Earnings
Profit for the period after taxbefore exceptional items	17,526	14,956
Exceptional items net of tax	(1,080)	(1,972)
Profit for the periodattributable toowners of the Company	16,446	12,984
	Million	million
Number of shares
Weighted average number of shares used for basic EPS	129.9	128.7
Dilutive effect of share plans	5.3	5.9
Dilutedweightedaverage number of shares usedfor dilutedEPS	135.2

	31 May	31 May
	2019	2018
	pence	pence
Basic
Basic EPSbefore exceptional items	13.5	11.6
Impact of exceptional items	(0.8)	(1.5)
Basic EPSafter exceptional items	12.7	10.1
Diluted
Diluted EPSbefore exceptional items	13.0	11.1
Impact of exceptional items	(0.8)	(1.5)
DilutedEPSafter exceptional items	12.2	9.6

7. CASH AND CASH EQUIVALENTS

	31 May 2019	Audited 30 November 2018

	£'000	£'000
Cash at bank	22,591	50,844
Bank overdraft	(15,620)	(17,521)
Net cashandcashequivalents per the statement of cashflow	6,791	33,323

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 approximatelyequal to their fair values.

TheGroup has cash pooling arrangements in place which allow anyone account to be overdrawn up to £50.0 million, so long as the overall pool of accounts do not exceed a net overdrawn position of £5.0 million.

8. BORROWINGS

The Group has access to a committed RCF of £50.0 million along with an uncommitted £20.0 million accordion facility in place with HSBC and Citibank, giving the Group an option to increase its total borrowings under the facility to £70.0 million. The funds borrowed under the facility bear interest at a minimum annual rate of 1.3% (HY2018: 1.3%) above the appropriate Sterling LIBOR. The average interest rate paid on the RCF during the year was 2.0% (HY2018: 1.8%). The Group also has an uncommitted £5 million overdraft facilitywith HSBC.

At the half year end, £15.0 million (H1 2018: £22.5 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.

TheGroup's exposure to interest rate, liquidity, foreign currencyand capital management risks is disclosed in theGroup's 2018 annual financial statements. Movements in borrowings are analysed as follows:

	£'000
Opening amount as at 1 December 2017	12,000
Net drawings during the period	11,089
(1) Changes to carrying amount due to RCFrefinancing	(636)
Unauditedclosingamount as at 31 May2018	22,453
Auditedclosingamount as at 30 November 2018	37,428
Net repayments during the period	(22,336)
(1) Changes to carrying amount due to RCFrefinancing	(92)
Closingamount as at 31 May2019	15,000

(1) £0.1 million (HY 2018: 0.6 million) million represents the unamortised amount of transaction costs including those incurred on renegotiating the facility.

9. SHARECAPITAL

During the period 139,665 (H1 2018: 123,633) new ordinary shares were issued, resulting in a share premium of £0.3 million (H1 2018: £0.3 million). These shares were issued pursuant to the exercise of share awards under the SaveAs You Earn scheme.

Treasury Reserve Treasuryshares represent SThree plc shares repurchased and available for specific and limited purposes.

In the sixmonths ended 31 May 2019, none of its own shares were purchased bySThree 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 (HY2018: 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 treasuryreserve bythe Companyand are, therefore, included in the financial statements as part of the treasuryreserve for theGroup.

In the sixmonths ended 31 May2019, the EBT purchased 290,000 (HY2018: 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 £0.9 million (HY2018: £1.0 million), for which the treasury reserve was reduced. During the period, the EBTutilised 466,554 (HY2018: nil) shares on settlement of LTIPawards.At the period end, the EBTheld 1,146,783 (HY2018: 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. TheGroup has historically relied on this regime in certain jurisdictions.Our maximum potential liabilityis estimated at £3.2 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 anyagreed 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 liabilitywill 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 PARTYDISCLOSURES

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 partytransactions 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 201 9 interim reportwill not be sent to shareholders butwill be available on the Company's website www.sthree.com or can be inspected at the registered office of the Company.

FINANCIAL CALENDAR

2019 21 November 30 November

September Q3 Trading update November Ex-dividend date for 2019 interim dividend Capital Markets Day Financial Year end December 2019 Interim dividend paid 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
LEICode:	2138003NEBX5VRP3EX50
OAM Categories:1.2. Half yearly financial reports and audit reports/limited reviews
Sequence No.: 14099
EQS News ID:	844289

End ofAnnouncementEQS News Service

AI assistant

SThree PLC — Earnings Release 2019

4842_rns_2019-07-23_9b057f0d-1584-44c1-9243-497676c6fff4.pdf

SThree (STHR)

SThree plc ("SThree" or the "Group")

INTERIM RESULTS FOR THE HALF YEAR ENDED 31 MAY 2019

Encouraging first half performance

FINANCIAL HIGHLIGHTS

OPERATIONAL HIGHLIGHTS

Strategic focus on Contract continuing to drive growth Contract represented 74%ofGroup net fees (HY2018: 72%)

Contract ahead by12%* 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 bydeclines in UK&I and USA

* Variances are held in constant currency

Notes toeditors

Important notice

INTERIM MANAGEMENT REPORT

CHIEF EXECUTIVE OFFICER'S REVIEW

Introduction

Our purpose

Market drivers

Our People

Investing for the future

Regional performance

Outlook

HY 2019GROUP TRADING PERFORMANCE

Operating Review

Continental Europe (58%ofGroupnet fees)

USA(22%ofGroupnet fees)

UK&I (14%ofGroupnet fees)

APAC& ME(6%ofGroupnet fees)

Sector Highlights

Technology(45%ofGroupnet fees)

Life Sciences (19%ofGroupnet fees)

Banking&Finance (12%ofGroupnet fees)

Energy(11%ofGroupnet fees)

Engineering(10%ofGroupnet fees)

CHIEF FINANCIAL OFFICER'S REVIEW

Operating profit

Restructuring costs ('Adjusting items')

Accounting changes

Investments

Taxation

Earnings per share ('EPS')

Dividends

Cash Flow

Foreign exchange

Principal Risks and Uncertainties

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that to the best of their knowledge:

CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT

CONDENSED CONSOLIDATED INCOME STATEMENT - UNAUDITED for the half year ended 31 May2019

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - UNAUDITED For the half year ended 31 May2019

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY -UNAUDITED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS -UNAUDITED

1. ACCOUNTING POLICIES

Basisof preparation

Going concern

IFRS16 Leases

(b) IFRS9 - Impact of adoption

(i) Classificationandmeasurement

(i.b) Equity investments previously classifiedas available-for-sale

(ii) Impairment of financial assets

(c) IFRS9 - Accountingpolicies appliedfrom1 December 2018

those to be measured subsequentlyat fair value (either throughOCI, or through profit or loss), and those to be measured at amortised cost.

(ii) Measurement of investments andother financial assets

Equity instruments

Debt instruments

(iii) Impairment

(d) IFRS15 - Impact of adoption

(e) IFRS15 - Accountingpolicies appliedfrom1 December 2018

2. SEGMENTAL ANALYSIS

Other information

3. ADMINISTRATIVE EXPENSES -EXCEPTIONAL ITEMS

4. TAXATION

5. DIVIDENDS

6. EARNINGS PER SHARE

7. CASH AND CASH EQUIVALENTS

8. BORROWINGS

9. SHARECAPITAL

Employee Benefit Trust

10. CONTINGENT LIABILITIES

SThree PLC Earnings Release 2019