Last checked at 6 Feb 2014 07:00
6 February 2014
Matchtech Group plc
Pre-close Trading Update
Matchtech Group plc (the "Group"), one of the UK's leading specialist engineering and professional services recruitment companies, today provides the following Pre-close Trading Update for the six months ending 31 January 2014.
Since our last update on 15 November 2013, the Group has continued to trade well and expects its results for the full year to be slightly ahead of current expectations.
Net Fee Income ("NFI")
There was a strong first half performance generating total NFI of £22.0 million, representing a 15% increase from Continuing Operations compared with the same period last year. We are seeing growth in both Contract NFI and Permanent Fees across all sectors in the business.
NFI performance is analysed as follows:
| H1 2014 | H2 2013 | H1 2013 | H1 v H1 | |
£m | £m | £m | % | ||
Engineering | 13.1 | 12.5 | 11.5 | +14% | |
Professional Services | 8.1 | 7.4 | 7.0 | +16% | |
Continuing Operations | 21.2 | 19.9 | 18.5 | +15% | |
Provanis (acquired 6 September 2013) | 0.8 | - | - | ||
Total Group | 22.0 | 19.9 | 18.5 | +19% | |
Number of weeks in period | 24.2 | 25.0 | 24.2 | ||
Average weekly NFI | 0.91 | 0.80 | 0.76 | +20% |
The business mix remained the same as the previous year, with Contract NFI accounting for 71% and Permanent Fees 29% of total NFI in the period.
Since its acquisition for a net consideration* of £3.6 million on 6 September 2013, Provanis, a technology recruitment business, has traded in line with the Board's expectations. The integration is going well as we look to cross sell its services into the Group's wider client base.
*Being a total cash consideration of £4.3 million including net assets of £0.7m.
Contract NFI
The demand for contract labour continues to be strong across the engineering and technology sectors.
Contract NFI from Continuing Operations of £14.9m was 13% up on the same period last year.
After accounting for the planned reduction of some 300 contractors at our largest client, which was already factored into our forecasts, we have maintained the number of contractors on assignment at the same level since 31 July 2013 at 7,000.
Contract NFI performance is analysed as follows:
| H1 2014 | H2 2013 | H1 2013 | H1 v H1 | |
£m | £m | £m | % | ||
Engineering | 10.8 | 10.1 | 9.5 | +14% | |
Professional Services | 4.1 | 3.9 | 3.7 | +11% | |
Continuing Operations | 14.9 | 14.0 | 13.2 | +13% | |
Provanis | 0.8 | - | - | ||
Total Group | 15.7 | 14.0 | 13.2 | +19% | |
Number of weeks in period | 24.2 | 25.0 | 24.2 | ||
Average weekly fees from Continuing Operations | 0.65 | 0.56 | 0.55 | +18% | |
Contractors on assignment at end of period | 7,000 | 7,000 | 6,700 | +4% |
Permanent Fees
Demand for permanent staff from our customers continues to improve, with Permanent Fees of £6.3m up 19% compared with the same period last year.
Permanent fee performance is analysed as follows:
| H1 2014 | H2 2013 | H1 2013 | H1 v H1 | |
£m | £m | £m | % | ||
Engineering | 2.3 | 2.4 | 2.0 | +15% | |
Professional Services | 4.0 | 3.5 | 3.3 | +21% | |
Total - Continuing Operations | 6.3 | 5.9 | 5.3 | +19% | |
Number of weeks in period | 24.2 | 25.0 | 24.2 | ||
Average weekly fees | 0.26 | 0.24 | 0.22 | +18% |
Net Debt
Net debt may be analysed as follows:
31 January 2014 | 31 July 2013 | 31 January 2013 | |
£m | £m | £m | |
Net Debt | 8.7 | 10.6 | 8.0 |
As the economy recovers we will continue to invest appropriately in our sales teams and it is pleasing that we are seeing an increase in our contract percentage margin and the number of permanent placements.
Our balanced business model and strong niche sector expertise give the Board confidence that the Group will continue to grow and take market share.
The Group intends to release its Interim Results for the period ending 31 January 2014 on 8 April 2014.
- ENDS -
For further information please contact:
Matchtech Group plc 01489 898989
Brian Wilkinson, Executive Chairman
Adrian Gunn, Chief Executive Officer
Tony Dyer, Chief Financial Officer
MHP Communications 020 3128 8100
John Olsen / Giles Robinson
Numis Securities Limited 0207 260 1000
Michael Meade / James Serjeant