2 February 2017 – trading update and acquisition
In the six months to 31 January 2017 net fee income was £35.1m (2016: £35.9m). Both Contract NFI and Permanent Fees declined by 2%. In constant currency terms, NFI was down 5%, with Contract down 4% and Permanent down 6%. Engineering’s NFI was down 4% to £21.1m (2016: £21.7m). Growth in the Engineering Technology and Aerospace sectors was offset by weakness in most other sectors as the time to hire lengthened following the outcome of the EU referendum. Vacancy flow continues to be strong though. Technology’s NFI was down 6% to £14.0m (2016: £14.2m). Within Technology, IT saw a return to growth, up 1% following a year of decline. Telecoms declined 14%, with a flat year-on-year performance in the UK offset by delays in a number of client projects internationally. Overall performance was relatively steady.
The acquisition of Resourcing Solutions Limited (RSL) has also been announced. RSL operates from three UK offices in Reading, Uxbridge and Derby, providing specialist contract and permanent candidates to clients operating in the Rail, Power and Built Environment sectors. RSL is expected to generate NFI of £7.5m and underlying EBITA of £2.0m in the 12 months to 31 January 2017. The acquisition is expected to be immediately earnings enhancing for Gattaca. Gattaca’s wholly-owned subsidiary Matchtech Group (Holdings) Limited will initially acquire 70% of RSL’s issued share capital for £6.9m. The remaining 30% is subject to put and call options and the maximum total consideration payable is £15.0m. Interim results are due out on 20 April and the shares are a BUY.