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Hope so, it should be doing much better in this recruitment environment. K
Gattaca is the UK's largest specialist engineering/tech recruitment agency. Its shares have fallen >70% (vs c. -25% sector) from their 52 week high of 285p - principally due to January’s profit warning. There is work to be done, but even so we believe the scale of the sell-off looks totally disproportionate to the issues involved (Re temporary disruption from a major IT system implementation, staff turnover/culture, etc).
Following the recent appointment of Matthew Wragg as CEO - a highly capable & experienced industry professional with ‘sales’ running through his veins - the early signs of a successful turnaround are tentatively taking shape, with productivity levels inching up anecdotally MoM since January. Furthermore the company is “seeing encouraging trends across many of its sectors”.
We have pencilled in FY23 PBT of £2.5m on NFI of £49.1m with a 145p/share fair value, albeit these estimates are prudent, and we would ultimately hope to upgrade as key milestones are met. Similarly, we assume the FY22 dividend will be temporarily suspended, leaving net funds (pre IFRS16) of £5.0m as at Jul’22 (excluding £10.4m of non-recourse finance).
https://www.equitydevelopment.co.uk/research/the-shares-appear-oversold
Investing today for a steady recovery.
Who knows, we said that about the previous two.
I'd have hoped they would have been bought by now being so cheap. They have a good business in some engineering sectors. K
Give the guy a chance. The cards are in his favour. Can't do any worse than the incumbent. Can he? :/
New CEO is an Insider who has been doing "Special Projects" and is a bit wet by all accounts.
CEO & CFO exiting Gattaca!
The company has gone rapidly backwards under their stewardship so no tears here. K
Back in 2015 it was over £6 then changed CEO who messed it up then changed CEO who further messed it up and seems unable to get on top of the issues. Only hope is that some bigger fish makes a play for it .
They have a strong position in Defence , Aerospace, Marine Automotive engineering so should be doing much better in current market.
must be a large background buyer bought some of these yesterday and just now just below 100p Recent drop was well overdone GLA
Recruitment market doing well. Coming out of covid globally. Things can only improve right?
Naked Trader sold it for a loss of 1200 quid.
Had hoped to see the rebound by now. Has the issue in the US been resolved ? K
GATC shares have fallen sharply on a warning of delay in contract business recovery, but its STEM focus still looks well placed long term.
On reduced forecasts ED's fair value/share falls from 285p to 165p, as shown in new research note here:
https://www.equitydevelopment.co.uk/research/fy22-nfi-set-to-climb-7-as-investment-kicks-in
Naked Trader likes the company. The drop in price is overdone.
It's been rubbish since name change to Gattaca.
Shocking trading update in current market environment! If they can just break even in the strongest recruitment surge in over a generation they are fooked when things revert back to normal demand levels! How can management get this so wrong??
Not so sure with this BOD, other recruiters doing much better.
Just bought back in, expecting it to bounce right back. Any thoughts?
"...anticipates the Company's continuing underlying profit before tax will be significantly below market expectations. This is driven by delayed recovery in our contract business where the improvement in our customer's demand has been slower than expected"
Weak management.
Thanks for your answers. Personally I see Gattaca as so cheap that IMO as long as the fine is not big enough to threaten the existence of the company the share price must rise. They also have a lot of net cash to handle it. It would be useful to have a worst case scenario in mind though... For this purpose, do you know if by any chance the fine must be proportional to the revenue Networkers received from Skycom (7,6 million)? Or potentially it could be even higher than that? I know it’s all theoretical, cause if we stick to the facts we don’t even know for sure if there will be a fine (I noticed that in 2020 and 2021 AR they added the wording “if any” after the usual disclaimer about the potential financial impact, which in 2019 was not there and maybe this could mean something...)... But I don’t see how one can value the company without any rough idea on at least a worst case scenario re the fine... Thanks.
They mention it at the very bottom of every half a full year release. Basically saying how much they’ve spent in the period related to it and that they don’t know when or what the outcome will be.
Personally I don’t believe that, because if you’ve been cooperating for nearly 2 years with the DoJ you know something, they just won’t say what and maybe can’t, legally.
It tough to call because it will be a bit harsh to wack a huge fine on them for things that mostly happened before they owned it. But there’s no way Uncle Sam won’t punish Gatc because of the counties and companies involved.
The company has not mentioned this since the preliminaries a year ago. There is a fine coming, but how much is anyone's guess, as is when it will be dished out. They themselves have effectively said this! It will not come cheap. I think this is a major factor in keeping the price down.
Hi everyone. Does anyone have a view on the contingent liability related to the DOJ collaboration and if this could be a serious trouble going forward? I’m trying to assess the risk with the little information available and it seems this matter is very little discussed... To me it seems pretty relevant - they spent more than 4 million in legal advisory to cope with it - it doesn’t seem a minor issue and yet is seldom mentioned as a risk. I wonder why, am I missing something? Hope that some enlightened poster can share some insight/opinion on that...
Nothing like Staffline. My thoughts are that this is a specialist head-hunter recruiter, pretty sure they don't fill warehouse operative vacancies.
This has had a torrid time recently along with its rivals like Staffline. Amazing really when one would believe the recruitment market should be booming. All the articles you read talk about staff shortages. I personally think these shares are close to the bottom but the problem is the markets are waiting to see if margins have been effected. The markets are also concerned about a lockdown which I personally don’t think will happen. If it did recruitment would still continue as it did before in essential areas. The whole market has suffered but in time these will come good once again