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Matchtech Group plc Preliminary Results

Matchtech Group plc Preliminary Results for the year ended 31 July 2009

Matchtech Group plc one of the UK's leading specialist technical recruitment companies, today announces its Preliminary Results for the year ended 31 July 2009.

Financial Headlines
Revenue up 4% to 269.6m (2008: 258.8m)
Net Fee Income (NFI) down 9% to 30.3m (2008: 33.2m), with H1 up 8%, H2 down 23%
Operating profit of 11.6m (2008: 13.8m)
Gross profit margin of 11.2% (2008: 12.8%)
Profit before tax of 11.3m (2008: 12.8m)
Basic EPS of 34.4p (2008: 39.3p)
Final dividend maintained at 10.6p per share, giving an unchanged total dividend of 15.6p per share
Net debt reduced to 1.2m (2008: 3.1m)
Group continues to generate positive cash flow at an operating level

Operational Headlines
Pressure on contractor pay rates and margins across all sectors, particularly in H2.
Business mix has shifted towards contract recruitment which now represents 73% of the Group's NFI (2008: 67%).
Cost base proactively managed staff headcount reduced by 20% and annualised savings of approximately 1.7m expected to be realised in the year ending July 2010.
Recent launch of long-term growth projects:
Launch in July of "elemense", a new brand that will enable us to deliver Recruitment Process Outsourcing (RPO) services to a broader client base.
Matchtech GmbH set up in Stuttgart in June to focus on developing business within the German engineering markets.

Commenting on the results, George Materna, Chairman of Matchtech said:
"Current trading is in line with the Board's expectations with average weekly permanent placement fees in August and September the same as the average throughout 2009 Q4, although there is still little visibility. The contract business has, as expected, been more resilient and is showing signs of growth with contractor numbers at the end of September 4,630 compared with 4,500 at the end of July, although we continue to experience margin pressure.

"The early actions we have taken to reduce costs have demonstrated our ability to endure the demanding economic conditions and still deliver good levels of profitability and cash flow performance.

"It is difficult to predict how and when demand for recruitment services will progress from the current subdued level. However, our balance sheet remains strong, with low levels of net debt, the cost base remains tightly managed and our mix of Contract and Permanent business provides resilience and the necessary scope for accelerated growth in any economic upturn. Add to this the selected growth initiatives we are planning to undertake in the current financial year, and I believe that Matchtech is well placed to deal with short term market conditions and to capitalise on opportunities in the medium term."
for the year ended 31 July 2009

Matchtech Group plc one of the UK's leading specialist technical recruitment companies, today announces its Preliminary Results for the year ended 31 July 2009.

Financial Headlines
Revenue up 4% to 269.6m (2008: 258.8m)
Net Fee Income (NFI) down 9% to 30.3m (2008: 33.2m), with H1 up 8%, H2 down 23%
Operating profit of 11.6m (2008: 13.8m)
Gross profit margin of 11.2% (2008: 12.8%)
Profit before tax of 11.3m (2008: 12.8m)
Basic EPS of 34.4p (2008: 39.3p)
Final dividend maintained at 10.6p per share, giving an unchanged total dividend of 15.6p per share
Net debt reduced to 1.2m (2008: 3.1m)
Group continues to generate positive cash flow at an operating level

Operational Headlines
Pressure on contractor pay rates and margins across all sectors, particularly in H2.
Business mix has shifted towards contract recruitment which now represents 73% of the Group's NFI (2008: 67%).
Cost base proactively managed staff headcount reduced by 20% and annualised savings of approximately 1.7m expected to be realised in the year ending July 2010.
Recent launch of long-term growth projects:
Launch in July of "elemense", a new brand that will enable us to deliver Recruitment Process Outsourcing (RPO) services to a broader client base.
Matchtech GmbH set up in Stuttgart in June to focus on developing business within the German engineering markets.

Commenting on the results, George Materna, Chairman of Matchtech said:
"Current trading is in line with the Board's expectations with average weekly permanent placement fees in August and September the same as the average throughout 2009 Q4, although there is still little visibility. The contract business has, as expected, been more resilient and is showing signs of growth with contractor numbers at the end of September 4,630 compared with 4,500 at the end of July, although we continue to experience margin pressure.

"The early actions we have taken to reduce costs have demonstrated our ability to endure the demanding economic conditions and still deliver good levels of profitability and cash flow performance.

"It is difficult to predict how and when demand for recruitment services will progress from the current subdued level. However, our balance sheet remains strong, with low levels of net debt, the cost base remains tightly managed and our mix of Contract and Permanent business provides resilience and the necessary scope for accelerated growth in any economic upturn. Add to this the selected growth initiatives we are planning to undertake in the current financial year, and I believe that Matchtech is well placed to deal with short term market conditions and to capitalise on opportunities in the medium term."

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