Last checked at 4 Feb 2010 07:00
4 February 2010
Matchtech Group plc
Trading Update
Matchtech Group plc ("Matchtech" or the "Group"), one of the UK's leaders in specialist technical recruitment, provides the following trading update ahead of the publication of its interim results for the six months ended 31 January 2010.
Since updating shareholders at the Annual General Meeting on 20 November 2009, trading has continued in line with the Board's expectations.
In the six months ended 31 January 2010 total Net Fee Income (NFI) was £12.4 million, down 9% on the prior six months to 31 July 2009. However, taking into account the seasonally fewer billing days in the period the NFI run rate is down only 4%.
Performance during period may be summarised as follows:
|
| FY2008/09 | FY 2009/10 | |
|
| H1 | H2 | H1 |
|
| £m | £m | £m |
| Net Fee Income |
|
|
|
| Contract | 11.4 | 10.6 | 9.4 |
| Permanent | 5.2 | 3.1 | 3.0 |
| Total | 16.6 | 13.7 | 12.4 |
|
|
|
|
|
| Business Mix |
|
|
|
| Contract | 69% | 77% | 76% |
| Permanent | 31% | 23% | 24% |
|
|
|
|
|
| Contract Margin % | 8.6% | 8.2% | 7.1% |
| Contract Numbers at end of period | 4,520 | 4,460 | 4,780 |
Contractor numbers have increased by 7% in H1, with most of this growth coming from the Engineering sector. However the Group continues to experience pressure on margins and reductions to contractor pay rates across all sectors, reducing the Group's average timesheet value by 9% in January 2010 compared with July 2009.
Income from Permanent recruitment has shown resilience, remaining stable throughout the six months at around the level achieved in the prior six months to 31 July 2009.
Net Fee Income performance by sector may be summarised as follows:
| Sector | FY2008/09 | FY 2009/10 | |
|
| H1 | H2 | H1 |
|
| £m | £m | £m |
| Engineering | 8.6 | 7.3 | 6.9 |
| Built Environment | 4.2 | 3.3 | 2.8 |
| Professional Services | 3.8 | 3.1 | 2.7 |
| Total | 16.6 | 13.7 | 12.4 |
The Group's new Stuttgart operation, Matchtech GmbH, which focuses on the German engineering markets, commenced trading in August 2009. It has made a sound start with NFI in line with the Board's expectations. Its NFI has been included under Engineering in the table above.
The new "elemense" Recruitment Process Outsourcing (RPO) brand, launched in July 2009, has shown early signs of success in delivering broader RPO services.
The Board has continued to take steps to ensure that the Group's cost base is appropriately aligned with prevailing market conditions, whilst still focusing on selected opportunities to strengthen the business for the future. The Group's strategic investment in key personnel to enhance its new business development capacity is starting to deliver increased exclusivity with clients. Overall headcount as at 31 January 2010 was 271 (31 January 2009: 286, 31 July 2009: 263).
The Group has moved into a net cash position of £0.8m at 31 January 2010 (Net debt: 31 January 2009: £3.7m; 31 July 2009: £1.2m).
The Board's outlook for the current financial year to 31 July 2010 is unchanged from that set out at the time of our AGM Statement on 20 November 2009.
Matchtech intends to release its Interim Results for the six months ended 31 January 2010 on 8 April 2010, at which point it will provide a further update on trading.
| For further information please contact: |
|
| Matchtech Group plc | 01489 898989 |
| Adrian Gunn, CEO / Tony Dyer CFO |
|
| Hogarth | 020 7357 9477 |
| John Olsen / Ian Payne |
|
| Arbuthnot Securities | 020 7012 2000 |
| James Steel / Ben Wells |
|
Background on Matchtech (AIM: MTEC.L)
Established in 1984, Matchtech specialises in the provision of contract and permanent staff and has grown organically to become one of the UK's leading technical and professional recruitment specialists.
Operating from a single site near Southampton, Matchtech provides predominantly professionally-qualified candidates to a broad range of clients across the UK in the Engineering, Built Environment and Professional Services sectors.
In August 2009 Matchtech commenced trading in Germany.
Website: www.matchtech.com
Cautionary Statement
This announcement is prepared for and addressed only to the Group's shareholders as a whole and to no other person. The Group, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this announcement is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. Statements contained in this announcement are based on the knowledge and information available to the Group's Directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. By their nature, any statements concerning the risks and uncertainties facing the Group involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this announcement contains any statement dealing with any time after the date of its preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur. The Group undertakes no obligation to update these forward-looking statements.