Last checked at 6 Aug 2009 07:00
6 August 2009
Matchtech Group plc
Trading Update
Matchtech Group plc ("Matchtech" or the "Group"), one of the UK's leaders in specialist technical and professional recruitment, provides the following trading update ahead of the publication of its preliminary results for the year ended 31 July 2009 on Thursday 8 October 2009.
Trading in the twelve months ended 31 July 2009 has been in line with the Board's expectations set at the time of issuing the Interim Results on 2 April 2009.
In the twelve months ended 31 July 2009 the Group has seen a 9% fall in Net Fee Income ("NFI") on the previous year to £30.2m, with H1 up 8% and H2 down 24%. The annual fall was predominantly due to a drop in demand for permanent recruitment services in H2.
Permanent fees for the year were down 24% to £8.3m, with fees each quarter of £3.0m, £2.2m, £1.7m and £1.4m. The Built Environment sector saw the largest annual fall of 52% with Professional Services falling by 23% and Engineering by 9%.
The resultant annual business mix was 73% (2008: 67%) of NFI generated from contract placements.
The Group took early action on its cost base and staff numbers have reduced 20% from their peak of 330 in December 2008 to 263 at 31 July 2009 with no exceptional charges arising.
The Group continued to benefit from low net debt which at 31 July 2009 was £1.3m (31 July 2008: £3.1m, 31 January 2009: £3.7m).
Short-term trading conditions remain challenging with no sign yet of any pick up in the level of permanent recruitment and continued pressure on contract margins. As a result the Board remains cautious with regard to the outlook for 2010 and its expectations have been re-set to reflect this trading environment.
The flexibility and cost benefits from the Group's single site model allow the Board to continually review the Group's cost base, whilst maintaining the underlying strength of the business ready for when the market improves. The diversity of our industry sectors and our focus on clients with long term infrastructure projects should continue to support our larger contract placement activities, giving the business a level of resilience.
Matchtech continues to invest for the future and to pursue new organic growth opportunities, extending the reach of our services which the Board is confident will increase growth in the longer term.
Accordingly the Board believes that the Group is well positioned to trade profitably and generate cash through the downturn and remains committed to its existing dividend policy.
For further information please contact:
| Matchtech Group plc | 01489 898989 |
| George Materna, Chairman Adrian Gunn, Chief Executive Officer Tony Dyer, Chief Financial Officer | |
| Hogarth Partnership | 020 7357 9477 |
| John Olsen / Ian Payne | |
| Arbuthnot Securities | 020 7012 2000 |
| James Steel |
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.