Good morning, everyone. I'm here today in Glasgow, where we have our Centre of Excellence, and I'm working with you to SThree's Q1 trading update for FY2025. I'm joined by our CFO, Andrew Beach, who's in London, and as usual, we will give you an overview of the performance before answering your questions. Let's start. At a macro level, it's no surprise that the world continues to be extremely uncertain. However, we are seeing signs of stability with our Q1 performance, consistent with Q4 FY2024. New business continues to be soft, but sequentially improved, while its extensions remain robust. Our ECM business, which represents 47% of our contract fees, continues to perform better than Independent Contractors, and we continue to see good opportunities in the space to leverage our global scale, skills focus, and first-mover advantage to deliver flexible solutions to our customers.
Within permanent, we have seen an improvement, particularly in the U.S., while uncertainty persists and it's too early to call a trend. We have seen some positive signs in the country, including growth in new placement activity this quarter. As a reminder, we made some internal structure changes in the region in the previous year to ensure we are well placed to capitalise in this market, as it is a region we expect to rebound faster than our other markets supported by a local skill focus. Turning to our Technology Improvement Programme, a key focus in the period has been further embedding our technology infrastructure across the 80% of our global operations where it has been rolled out.
By really focusing on our live regions, we have been able to further address and refine back-end processes, work through client integrations, including payment system connectors, and deliver significant enhancements to the platform, including the launch of a range of new AI-driven tools to help drive further efficiencies and the productivity of our teams. We're really pleased with the progress we have made on the program. Of course, with any major technology change, a period of adjustment is expected as customers and employees adapt to our new ways of working. From a client perspective, we have a specialist team allocated to support them through this transition. We are taking these learnings across all of our regions as we continue to progress our plan.
With the foundation infrastructure now in place in our four largest markets, it is really exciting to see the speed and efficiency at which we can deliver upgrades and new functionality to our live markets simultaneously. For instance, in the period, we have delivered 31 releases, including new AI-powered tools such as Summary AI, which helps our consultants to rapidly create highly tailored prospect lists and SThree's own proprietary client timesheet AI solution, which will significantly reduce the amount of time spent validating the timesheet evidence submitted by our contractors. The new platform is now enabling us to release new tools, features, and system improvements every week, and we are excited to progress through our remaining smaller markets in the year ahead with a robust roadmap planned of future improvements. With that, I will hand over to Andy, who will take us through the numbers.
Thank you very much, Timo, and good morning, everyone. Net fees for the quarter were down 15% year-on-year on a constant currency basis against the persistent challenging backdrop for the sector. This is the same rate of decline as Q4 FY2024, reflecting a stable performance. Our Contract business, which represents 84% of group net fees, declined by 15% year-on-year, with ongoing softness in new placement activity partially offset by continuing robust extensions. Permanent net fees, down 13% year-on-year, continue to be impacted by tough market conditions across most of our regions, but pleasingly, permanent achieved a strong sequential improvement versus Q4, primarily driven by a reduced rate of decline in Germany and growth in the U.S. Let's take a closer look at what's driven the performance in the year, starting with the skills mix. Life Sciences declined 11% year-on-year, reflecting the continued global market conditions in the sector.
However, this performance also represents a solid sequential improvement versus Q4, reflecting a lower rate of decline in demand for roles, particularly in the U.S., our largest life science market. Engineering declined by 15% year-on-year against a record prior year performance, and Technology, our largest discipline, declined by 17% year-on-year, reflecting the ongoing challenging trading environment. As a reminder, when we talk about technology, we're referring to placing people with skills in technology across multiple industries. I'll now go through our top five countries in turn and call out some of the key trends we are seeing. In Germany, we saw contracts down 10% year-on-year, consistent with the Q4 performance, reflecting lower demand across the main skill verticals. Overall, Germany delivered a sequential improvement versus Q4, which was attributable to the reduced rate of decline in demand for permanent roles seen across the main skill verticals, but particularly in engineering.
In the Netherlands, contract declined 17% year-on-year, reflecting reduced levels of demand for engineering and technology skills versus record levels in the prior year. In the U.K., contract, which represents nearly all of the net fees, was down 30% year-on-year, primarily reflecting lower demand for technology roles. In the U.S., contract net fees, which account for 85% of the total, were down 16% year-on-year, impacted by declines across our main skill verticals. This performance was partially offset by exceptional growth in permanent, driven by demand for roles across life sciences and engineering, as well as finance skills, which underpinned the U.S.'s sequential improvement versus Q4. Finally, in Japan, net fees declined by 7% year-on-year, reflecting lower demand across the three skill verticals. Moving on to headcount, period-end group headcount was down 5% compared to the end of FY2024.
This was attributable to the careful management of natural churn, whilst being highly selective about where we choose to hire. As you may recall, in December, we announced our plan to accelerate the realisation of further operational efficiencies to drive GBP 6 million of in-year net savings. This quarter, we have been formulating and finalising our plans, and we remain confident of delivering the savings target and will provide you with an update at the half-year results. The contract order book of GBP 168 million is down 7% year-on-year, reflecting the prolonged soft new placement activity, partially offset by our consistently strong contract extensions. However, this is an improved rate of decline since FY2024 year-end, which was down 10% year-on-year, and it continues to offer sector-leading visibility. Finally, we have a robust balance sheet with net cash of GBP 45 million.
There are two key drivers of the sequentially lower net cash position compared to the end of FY2024. The first is the share buyback that was launched in December and, as at the end of Q1, was over 40% complete at a cost of around GBP 8.5 million. The second, as we previously disclosed, relates to a temporary impact from clients' payment processes transitioning to our new billing system. For most of the U.S. clients, these transitional issues are now behind us, and what we have seen incrementally this quarter is some impact from the Netherlands, our most recently deployed TIP market. However, as a reminder, 80% of our business is now live on the platform, and we expect to return to a more normalised cash flow profile over the coming months. With that, I'll hand back to Timo.
Thank you, Andy. To summarize, our stable performance has been underpinned by robust contract extensions and our STEM specialism through a protracted period of market uncertainty, the longest cycle I've ever seen in my career. Our business model remains a source of strength, aligned to the strategic priorities of our clients and providing sizable growth opportunities across all our key markets. As a reminder, our unique Contract business model provides resilience. In practice, this means that when markets turn and new contract placement activity increases, the recovery in net fees tends to be smoother and from a higher overall level, resulting in a more even through the cycle net fees profile. In our smaller permanent business, we would expect to see this recovery more sharply, given fees are recognized immediately and will be rebounding from a lower base.
As we look ahead, business leaders are continuing to navigate an evolving macroeconomic backdrop, which is weighing on clients' investment decisions. Through this, we are highly confident that the future economy is based on STEM skills. This is a viewpoint shared by leading independent researchers and analysts, and everything we're doing right now, from our TIP to our market investment model, is putting us in the best place to deliver on this structural opportunity. Thank you all once again for joining us this morning. Going forward, and that's important, we will be hosting briefing calls alongside our Q1 and Q3 trading updates and with half- and full-year results. Our half-year trading update will be issued on the 24th of June, and we will look forward to speaking with you again at the time of our half-year results on the 29th of July.
With that, thank you all, and have a good week, and nice regards from Glasgow.