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Matchtech Group plc Trading Update

Matchtech Group plc Trading Update

Matchtech Group plc 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 month ended 31 January 2009.

In the six months ended 31 January 2009 the Group has seen 8% growth in Net Fee Income ("NFI") to 16.5m, comprising of 13% growth in Quarter 1 and 3% growth in Quarter 2. NFI from contract placements was up 13% to 11.5m and permanent fees were essentially unchanged from the same period last year at 5.0m. This has resulted in a business mix of 70% (2008 H1: 67%) of NFI generated from contract placements.

Support Services and Engineering saw the largest changes in NFI from the previous year with increases at the half year of 17% and 10% respectively, whilst Built Environment saw a decline of 2%.

The economic climate is increasingly challenging as evidenced by the significant reduction in growth in the second quarter, noted above, which has left the Group with much reduced visibility for the remainder of this financial year. Notable falls in demand were seen particularly in the automotive sector, privately funded projects in the Built Environment and permanent recruitment in Support Services. This has resulted in a 5% decline in contractor numbers at 31 January 2009 as compared with 31 July 2008. Fees from permanent placements decreased c.20% to 1.4m in December and January compared with the same two months last year.

The Group continues to focus on those clients that operate in the publicly funded defence, transport and infrastructure sectors, where demand has been most resilient. In addition, the Board continues to take steps to ensure that the Group's cost base is appropriately aligned with prevailing market conditions. These measures, along with the flexibility and cost benefits from the Group's single site model, should provide a measure of resilience.

The Group continues to benefit from low net debt which at 31 January 2009 was 3.9m (31 January 2008: 5.8m).

Matchtech also announced that Paul Raine, Resources Director, has resigned from the Board and has left the company by mutual agreement with effect from 6 February 2009. His responsibilities for IT, operations, marketing and legal will be assumed by Adrian Gunn, Group Managing Director and Tony Dyer, Group Finance Director.

George Materna, Chairman of Matchtech, commented:

"On behalf of the Board, I would like to thank Paul for his contribution to the development of Matchtech over the past 19 years. Matchtech is a much bigger and stronger business than the one he joined and he leaves with our thanks and our best wishes for the future. These are challenging economic times and it is incumbent on the Board to take the difficult decisions necessary to ensure that we keep our business as flexible and cost efficient as possible. We will continue to do so as required."


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