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Strong Progress at Matchtech Group plc

Strong Progress at Matchtech Group plc

Half year financial report for the six months ended 31 January 2013

Matchtech Group plc (the “Group”), one of the UK’s leading specialist engineering and professional services recruitment companies, today announces its unaudited results for the six months ended 31 January 2013.

Financial Headlines             H1 2013               H1 2012               % Change

Revenue                                             &pound197.3m                             &pound176.7m                             12%

Net Fee Income (NFI)1       &pound18.5m                &pound17.2m                8%

Contract NFI                       &pound13.2m                &pound11.6m                14%

Perm recruitment fees2     &pound5.3m                   &pound5.2m                   2%

Profit from operations       &pound4.4m                   &pound3.4m                   29%

Profit before tax                &pound4.0m                   &pound3.2m                   25%

Basic earnings per share   12.65p                 9.53p                   33%

Interim dividend                5.15p                   5.00p                   3%

Net debt4                           &pound8.0m                   &pound11.0m                -27%

1             NFI is calculated as revenue less contractor payroll costs

2             Permanent recruitment fees  excludes the discontinued operations of Executive Search and Financial Services of &poundnil (2012 H1 &pound0.4m)

3       Underlying profit from operations is calculated before deducting non-recurring restructuring costs of &pound0.4m (2012 H1: &poundnil)

4       As at end of period: 31 January

Operational Highlights

•             Increase in underlying H1 NFI conversion to 25.9% from 19.8% in 2012 H1 reflects the benefit of the developing brands and efficiencies within our cost base

•             Strong demand for contractors across most of our specialist sectors, with contractors on placement at 31 January 2013 up 5% to 6,700 (31 January 2012: 6,400 31 July 2012: 6,700)

•             Underlying permanent fee income remained stable

•             Major contract extension with BAE Systems (via Xchanging) and contract win with UK Power Networks announced on 14 March

•             Major contract extensions with Transport for London and Babcock Marine & Technology announced today

•             Simplified Group reporting structure with two distinct business units, Engineering and Professional Services, creating a clearer defined product offering and an enhanced platform for marketing and niche candidate attraction

•             Launch of our new technology brand Connectus in April 2013

Commenting on the results, Adrian Gunn, Chief Executive of the Group said: “The Group delivered a strong performance in the first half of the year with a 41% increase in underlying profit from operations. Our simplified Group structure and clearly defined niche product offering is enabling us to grow and take market share. 

In Engineering, the extension of three major contracts with BAE Systems (via Xchanging), Transport for London and Babcock Marine & Technology and a new contract win with UK Power Networks have helped the Matchtech brand reinforce its position as the UK’s leading engineering recruitment business as we continue to support our clients in their long term infrastructure projects.

In Professional Services, Barclay Meade has built on its success within London and the Home Counties, Alderwood traded strongly and the recent launch of our new technology brand Connectus will help to broaden its scope and client base.

Trading has continued to progress solidly since our last update on 7 February 2013 and the Board currently anticipates that the results for the year to 31 July 2013 will be in line with its previous expectations.

In recognition of the Board’s confidence in the Group’s underlying and future prospects the Directors are proposing a 3% increase to the interim dividend to 5.15 pence per share. The Board intends to return to a progressive dividend policy after having maintained the dividend throughout the downturn.  This dividend will be paid on 21 June 2013 to shareholders on the register as at 31 May 2013.”


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