SThree

SThree Dividend Analysis and Summary

• Declared interim dividend: 5.1p per share (unchanged vs H1 FY24).
• Ex-dividend date: 13/11/2025 (derived from record date).
• Record date: 14/11/2025.
• Payment date: 12/12/2025.
• Estimated cash cost: ~£6.6m.
• Share count context: 7.8m shares bought back and cancelled in H1 FY25 (c.£20m), reducing future dividend outflow.
• Dividend policy: target through-the-cycle cover of 2.5x–3.0x EPS.
• Interim cover snapshot: H1 basic EPS 5.6p implies c.1.1x cover for the interim alone (below target, but policy is through-cycle).

• Earnings support: H1 net fees down 14% (cc), PBT £10.1m (-72% YoY), operating profit conversion 6.3%. Interim is maintained, but current period earnings offer only thin cover.
• Cash and balance sheet: net cash £47.8m with undrawn £50m RCF; operating cash generation positive. This underpins the maintained interim despite softer profits.
• Visibility: contractor order book £163.8m (~5 months of net fees), providing reasonable near-term cash flow visibility, albeit down 8% YoY.
• Outlook/efficiencies: FY25 PBT guidance reaffirmed at ~£25m; £6m in-year net savings on track; TIP rollout should aid margins over time. If delivered, this improves dividend sustainability into FY26.
• Per-share support: buyback and cancellation lower the share count, modestly enhancing per-share dividend capacity and reducing cash cost of distributions.
• Growth trajectory: interim held flat; absent profit recovery, scope for near-term dividend growth looks limited. A cyclical upturn and TIP benefits would be needed to re-align cover with the 2.5x–3.0x policy.