TIDMGATC
RNS Number : 2119E
Gattaca PLC
07 February 2018
Gattaca plc
("Gattaca" or, "the Group")
Trading Update for 6 months ended 31 January 2018
Gattaca plc ("Gattaca" or the "Group"), the specialist
Engineering and Technology (IT & Telecoms) recruitment
solutions business, today provides the following pre-close Trading
Update for the six months to 31 January 2018.
Overview
The Group delivered an improvement in NFI over the period. UK
Engineering performed positively, returning to growth in H1,
although this was tempered by continued challenges seen in UK
Technology, particularly in telecoms.
Our International business continues to grow strongly, with the
US delivering double digit growth in H1 following our investment
there.
2018 2017 Change
================== ========================== ========================== ==========================
Statutory Underlying(2) Statutory Underlying(2) Statutory Underlying(2)
================== ========== ============== ========== ============== ========== ==============
GBPm GBPm GBPm GBPm % %
================== ========== ============== ========== ============== ========== ==============
Net Fee
Income (NFI)(1) 39.8 39.8 35.4 39.1 +12% +2%
================== ========== ============== ========== ============== ========== ==============
Engineering 24.1 23.5 +3%
================== ========== ============== ========== ============== ========== ==============
Technology 8.4 8.8 -5%
================== ========== ============== ========== ============== ========== ==============
UK 32.5 32.3 +1%
================== ========== ============== ========== ============== ========== ==============
International 7.3 6.8 +7%
================== ========== ============== ========== ============== ========== ==============
Total 39.8 39.1 +2%
================== ========== ============== ========== ============== ========== ==============
Contract 28.7 29.6 -3%
================== ========== ============== ========== ============== ========== ==============
Permanent 11.1 9.5 +17%
================== ========== ============== ========== ============== ========== ==============
Total 39.8 39.1 +2%
================== ========== ============== ========== ============== ========== ==============
(1) NFI is calculated as revenue less contractor payroll
costs
(2) Underlying results includes RSL as if it had been a fully
owned subsidiary throughout 2017 and is presented on a constant
currency basis.
Performance
-- Group underlying NFI up 2% year-on-year
at GBP39.8m
-- UK Engineering has returned to modest growth,
up 3% on H117
-- UK Technology continues to be a challenge,
with H1 down 5% on H117, primarily driven
by Telco. Excluding Telco, UK Technology
NFI was 4% higher than H117
-- International performed strongly, with
NFI up 7% on H117, driven by continued
strong performance in the Americas where
NFI has grown 31% year-on-year
-- We have seen a shift towards perm in our
NFI mix, with perm representing 28% of
H1 NFI compared to 24% in H117
NFI has grown both in UK Engineering and International, tempered
by continued challenges in UK Technology. PBT however, as expected,
will be lower than in H1 of last year as a result of our
investments in staff and support costs to deliver the increased NFI
and to allow for further growth in H218.
Taking a more prudent assessment of the economic outlook, we
have tempered our expectations for growth in H2 and consequently we
are undertaking a review of our cost base, so as to identify
savings, some of which will be achieved in H2. Notwithstanding
these savings, profits before tax excluding non-recurring costs are
now expected to be in the order of 15% below the Board's previous
expectations.
Net debt
We estimate our net debt position at the end of January at
GBP37m (end July 2017 GBP40.3m).
Dividend
In light of the revised full year expectations the Board has
decided to reset the rate of dividend in order to restore a more
sustainable dividend cover ratio, to enable the pay down of debt,
and to reflect a more normalised yield. The Board intends to set
the dividend cover at approximately 2x (2017 1x).
Interim Results
The Group will announce its interim results for the 6 months to
31 January 2018 on Thursday 19 April 2018.
Patrick Shanley, Chairman, said:
"We delivered an improvement in NFI in the first half of the
year, with our core UK Engineering business returning to growth,
albeit somewhat tempered by continued challenges seen in UK
Technology. Our International business is growing strongly, and it
is pleasing to see our investments in the US delivering double
digit growth. However, our cost base and expenditures for the full
year now need to be reconsidered.
"The Board is also taking the pre-emptive step of addressing the
dividend which has become burdensome and which prudence dictates
should be brought into alignment with the financial position and
future prospects of the business.
"Notwithstanding, we are clear that we have a robust core
business with a good strategy. Together with a strong and deep
management team and excellent staff we are well positioned to reset
the business for profitable growth."
Salar Farzad, Chief Financial Officer, said:
"Given our assessment of the economic outlook, we are not
complacent and are working hard to strengthen the Group. We will be
identifying significant savings in our cost base, some of which
will be realised in H2. We will update the market on progress when
we announce our interims in April."
For further information please contact:
Gattaca plc +44 (0) 1489 898989
Patrick Shanley, Chairman
Salar Farzad, Chief Financial
Officer
Citigate Dewe Rogerson +44 (0) 20 7638 9571
Louise Mason-Rutherford
/ Nick Hayns / Ellen Wilton
Numis Securities Limited +44 (0) 20 7260 1000
Michael Meade / Kevin Cruickshank
/ Tom Ballard
About Gattaca
Gattaca plc (LSE-AIM: GATC), is the UK's leading specialist
Engineering and Technology, (IT & Telecoms) recruitment agency,
providing contract, temporary and permanent staff. Established in
1984 and AIM-listed in 2006, the Group is one of the fastest
growing staffing organisations listed in the UK, with a
well-balanced business model; approximately 75% contract and 25%
permanent.
Recruiting in over 100 countries across the world from 14
offices in 11 countries, the Group has over 500 sales staff, with
over 9,500 contractors on assignment and places 4,000 candidates
into permanent positions each year.
The combined group is well-placed to take advantage of the
convergence between Engineering, Technology and Telecoms skill sets
and is now a specialist recruiter, of scale, in the UK and
internationally.
The information communicated in this announcement contains
inside information for the purposes of Article. 7 of the Market
Abuse Regulation (EU) No. 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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