Matchtech's public sector concerns

Technical staff provider Matchtech is trading in line with expectations but there are concerns that 50% of the business is exposed to the public sector. Revenues fell 14% to £26m in the year to July 2010. Most of that decline came in the first half. There was a sharp fall in permanent revenues in the year to July 2010 while the core contract side of the business was 10% lower. The number of contractors rose 8% to 5,100.The engineering and professional services sectors were steady in the second half with continued decline coming from the built environment sector. Net debt was £4.5m at the end of July 2010. Debtors increased by £6m because of a change in payment terms by a large customer. AIM-quoted Matchtech has renewed and expanded contracts with Transport for London and BAE Systems. KBC Peel Hunt forecasts a fall in underlying profit from £11.3m to £8.7m in the year to July 2010. The dividend is expected to be cut from 15.6p to 14p a share. The broker believes that profit could recover to £9.4m in 2010-11. There are signs of recovery in the private sector but public sector demand is uncertain. Full year figures will be published on 7 October 2010. Made Tech