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Matchtech Group plc Pre-close Trading Update

Matchtech Group plc Pre-close Trading Update

Matchtech Group plc one of the UK’s leading specialist engineering and professional services recruitment companies, today provides the following Pre-close Trading Update for the year ended 31 July 2013.

The Group intends to release its Preliminary Results for the year ended 31 July 2013 on 15 October 2013.

Underlying Profit

Since our last update on 11 April 2013, trading in the final 4 months of FY2013 has been encouraging, such that the Board now anticipates that the underlying profit for the year to 31 July 2013 will be slightly ahead of its previous expectations.

Net Fee Income (“NFI”)

Performance against previous periods may be summarised as follows:

                                                                                               Underlying Change v comparable period

               FY2012  FY2013  FY2013  FY2013                  FY2013  FY2013  FY2013

               Year       H1           H2           Year                       H1           H2          

               &poundm          &poundm          &poundm          &poundm                          %            %            %

Contract               24.5        13.2        14.2        27.4                        14%     10%     12%

Permanent         10.7          5.3        5.8          11.1                        2%       5%       4%

Underlying1       35.2        18.5        20.0        38.5                        10%     9%       9%

Discontinued Operations1           0.9          -              -              -                                                             

Total      36.1        18.5        20.0        38.5                      8%       6%       7%

                                                                                                                              

Business Mix                                                                                                                     

Contract               70%        71%        71%        71%                                                       

Permanent

               30%        29%        29%        29%                                                       

Contractors on assignment2      6,700     6,700     7,100     7,100                     0%       5%       6%

                                                                                                                              

Segmental Split                                                                                                                

Engineering        22.8        11.5        12.6        24.1                        6%       5%       6%

Professional Services     12.4        7.0          7.4          14.4                        16%     16%     16%

Underlying          35.2        18.5        20.0        38.5                        10%     9%       9%

                                                                                                                              

1   Underlying Permanent recruitment fees, which excludes the Discontinued Operations of Executive Search and Financial Services, remained stable, tracking at similar  levels as in H1 2012: &pound5.2m & H1 2012: &pound5.5m.

2   At end of period (H2/Year: 31 July H1:  31 January).

Underlying NFI for the year of &pound38.5m was up 9% on FY2012. 

The demand for contract staff within Engineering and Connectus, our Technology business within Professional Services, remains strong, fuelled by the global demand for the products and services that our clients offer, along with the continued investment in UK infrastructure programmes.

Contract NFI for the year of &pound27.4m was up 12% on FY2012.  Contractor numbers have continued to increase and at 31 July 2013 were over 7,100, up 6% on 31 July 2012. 

Permanent recruitment fees have improved by 4% over the course of the year, with H1 FY2013 2% higher than the same period in FY2012 and H2 5% higher.  Whilst demand for highly skilled candidates across all the Group’s brands is still very high, the time to hire period has been elongated as candidate confidence remains fragile.

Engineering has delivered a 6% increase in NFI, with continued demand for skilled professional contractors.

With a 47%:53% mix of Permanent to Contract business compared to Engineering’s 18%:82%, Professional Services has delivered a 16% increase in NFI.

Net Debt

Debt may be analysed as follows:

31 July 2012        31 January 2013                31 July 2013

&poundm          &poundm          &poundm

14.5        7.9          10.3

Adrian Gunn, CEO, commented:“2012/13 has been a significant year for Matchtech with major contract extensions, new contract wins and the re-branding of our technology business Connectus.

We will continue to invest appropriately in the infrastructure to support the Group's ambitious growth plans. Our balanced business model and strong niche sector expertise give the Board confidence that the Group will continue to grow and take market share.”

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