SThree Limited Announces Initial Public Offering and Listing on the London Stock Exchange

SThree, one of the UKís information, communication and technology (ìICTî) staffing businesses, announces its intention to proceed with an initial public offering of ordinary shares by certain shareholders in SThree to institutional investors in the United Kingdom and elsewhere outside the United States (the ìGlobal Offerî) and for the ordinary shares to be admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange (ìAdmissionî). UBS Investment Bank is acting as Sponsor, Financial Adviser, Bookrunner and Global Co-ordinator of the Global Offer. Investec Bank (UK) Limited and Oriel Securities Limited are acting as Co-Lead Managers.

Summary of SThree
SThree, founded in 1986, is one of the leading ICT staffing businesses in the UK based on turnover. SThree provides both permanent and contract specialist staffing services in the UK and Europe primarily in the ICT sector and, to an increasing extent in the UK, the banking and finance, accountancy, human resources and engineering sectors.

The Group currently operates under 12 brands, the three largest by turnover being Computer Futures, Progressive and Huxley, and has 30 offices in the UK and 8 offices in Europe, in Belgium, The Netherlands, France, Germany and Ireland.

For the year ended 30 November 2004 and the six months ended 31 May 2005, the Group had turnover of 242.4 million and 143.5 million, respectively, and gross profit of 75.9 million and 46.0 million, respectively.

For the year ended 30 November 2004 and the six months ended 31 May 2005, 25.5 per cent. and 23.8 per cent., respectively, of the Groupís gross profit resulted from contract and permanent placements in Europe and the rest of the world.

SThree has a selective approach to clients and focuses on high margin opportunities, predominantly within the small to medium-sized enterprises (ìSMEî) market, which SThree defines as including autonomous divisions of large corporates. SThree does not pursue a high volume/low margin model. SThree has a diverse, international client list of over 4,000 clients, comprising primarily SMEs.



In the financial year ended 30 November 2004, no single client accounted for more than 2.4 per cent. of the Groupís turnover derived from permanent placements and no single client accounted for more than 2.1 per cent. of the Groupís turnover derived from contract staffing.

Following the establishment of its first brand, Computer Futures, in 1986, SThree adopted a multi-brand strategy, establishing new operations to address growth opportunities. These new brands have typically been created out of one of SThreeís existing businesses and are an important means of retaining high performing key employees who are often given the opportunity to acquire a minority equity stake in the new business.

SThree has an experienced, home-grown management team, and the majority of the Groupís senior management have been with the Group for more than 10 years each, with the current CEO and COO having been with the Group since 1986 and 1988, respectively.

Trading in the period since 31 May 2005 has been in-line with historical seasonal trends, with contract and permanent placements growing in line with expectations and turnover from the Groupís European and non-ICT operations continuing to increase. The programme of European expansion has continued with the opening of Progressiveís office in Amsterdam in July 2005.

Strategy for growth
SThree aims to be the most profitable specialist staffing services business in the United Kingdom

and Europe. The Groupís growth strategy is as follows:

Continue to pursue a multi-brand strategy with continued establishment of new brands;

Pursue organic growth through continued development of the Groupís core ICT staffing business

while increasing the Groupís turnover from other sectors;

Pursue geographic expansion; and

Explore selective acquisitions.

The Global Offer
Shares being sold under the Global Offer will be made available to institutional investors in the United Kingdom and elsewhere outside the United States by the selling shareholders, which are expected to include the co-founders of SThree, certain members of the SThree management team and other SThree employees, and private equity investors, Barclays Private Equity, Gresham, 3i and Parallel Ventures Nominees.

The Global Offer will, among other things, provide SThree with an opportunity to recognise the contribution of key management and employees by providing them with a quantifiable asset, the value of which may increase as a result of those employeesí future efforts and commitment. The Directors of SThree believe the flotation will also enhance the reputation of the individual SThree brands with clients and prospective employees. A public listing will also provide SThree with an alternative currency which can, if appropriate, be used to fund future acquisitions should the Group wish to pursue these on a selective basis.

Commenting on the proposed IPO, Russell Clements, Chief Executive Officer, said: ìOur plans for a public listing are a milestone in SThreeís development and the next logical step towards our ultimate goal of becoming the most profitable specialist staffing business in the UK and Europe.

ìSThree has a strong track record in its core ICT recruitment market in the UK, an established base from which to expand further in Europe and has already begun a successful expansion into new market segments. Our clear focus on servicing those clients that place a high value on our offering has meant our growth has been achieved without sacrificing margins or compromising profitability. Widespread share ownership among management and staff has been a key contributor to our entrepreneurial culture.

ìA public listing will further enhance our ability to attract, retain and incentivise key personnel. This is crucial to the Group capitalising on growth opportunities in the liberalising markets of Continental Europe and, in parallel, accelerating the roll-out of our proven business model into other high growth sectors of the specialist staffing market.î