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Matchtech Group plc Preliminary Results for the year ended 31 July 2010

Matchtech Group plc Preliminary Results for the year ended 31 July 2010

Matchtech Group plc (Matchtech or the Group), one of the UKs leading specialist technical recruitment companies, today announces its Preliminary Results for the year ended 31 July 2010.

Financial Headlines

Revenue 264.4m down 2% (2009: 269.6m), with H2 up 11% on H1
Net Fee Income (NFI) 26.2m, down 14% (2009: 30.3m), with H2 up 10% on H1
Permanent recruitment fees in Quarter 4 of 1.6m, up 14% on Quarter 4 2009
Record number of contractors on assignment at year end at 5,100 (July 2009: 4,500)
Operating profit of 8.8m (2009: 11.7m)
Profit before tax of 8.6m (2009: 11.3m)
Basic EPS of 26.4p (2009: 34.37p)

Final dividend maintained at 10.6p per share, giving an unchanged total dividend of 15.6p per share

Operational cost savings of 2.1m compared with 2009
Investment in new growth initiatives of 0.9m, with anticipated 2.0m in 2011
Low net debt of 4.5m at year end (2009: 1.2m)
Continuing to generate positive cashflow, with net cashflow from operating activities of 0.8m (2009: 5.9m)

Operational Headlines

Business restructured to better reflect the sectors we serve and to take advantage of opportunities as the economy recovers

Core focus remains on UK technical market, servicing four key sectors Engineering, Science & Medical, Built Environment and Information Systems & Technology

New Recruitment Process Outsourcing (RPO) brand, elemense, focused on winning new business in the technical sector

International expansion into Germany progressing recently moved into new larger premises in Stuttgart
Launch of two new Professional Services brands: Barclay Meade and Alderwood Education

Offices opened in London, Aberdeen and St Albans to support growth of new Professional Services brands, with further strategic locations planned

Executive team strengthened through appointments of Nigel Lynn and Peter Collis as Managing Directors of Professional Services and elemense businesses respectively

Commenting on the results, George Materna, Chairman of Matchtech said:
The year has been characterised by uncertainty in the UK economy, the General Election and anticipation of the Government's Comprehensive Spending Review (to be announced on 20 October 2010).

Finding candidates and contractors with the right skills at the right time can sometimes be difficult, and in the UK there are concerns of a talent shortage. Even now employers are actively looking for motivated and skilled candidates to join their workforces and help drive future growth. Momentum is increasing, with improving traction in permanent recruitment, and contractor numbers are at a record level.

We have a healthy balance of business mix, clients and relationships, and although we have exposure to the Public Sector, both directly and indirectly, much is on long-term contracts, and protected, to an extent, by the specialist nature of the vacancies that we have to fill.

The management have used the economic slowdown to strategically review the business. We have restructured the Group to make it more understandable to both clients and investors, we have made some key appointments, and have commenced a number of additional growth initiatives to add to the Matchtech UK organic growth model.

The Group has begun the year well, with trading in the first two months to the end of September in line with our expectations.

Notwithstanding the uncertain economic times, our robust business model, the ambitious plans we have for our sector diversification and the start of our international network all give the Board confidence in the medium term prospects for the Group.


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