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Matchtech Group 2016 NFI up 34% on 2015

Matchtech Group plc has issued a pre-close trading update for the 12 months ended 31st July 2016. The board of the engineering and technology (IT & Telecoms) recruitment agency, which announced in July it will change its name to Gattaca, expects profits to be in-line with its previous expectations.


Group NFI of £73.2m, including the full year effect of the Networkers acquisition which was completed on 2 April 2015, was up 34% on the prior year (+1% on a LFL basis). On a LFL basis engineering’s NFI was up 6% on prior year with similar levels of growth in both halves of the year, up 7% and 5% respectively. Contract NFI increased by 5% (H1: 5%, H2: 5%) and permanent fees increased by 9% (H1: 12%, H2: 5%).  There Group announced there was particularly strong annual growth in infrastructure, professional staffing, and engineering technology, offset by weaker performance in oil & gas and maritime.


On a LFL basis technology’s NFI was down 6% year on year (H1: -11%, H2: 0%). Telecoms performed strongly with NFI up 9% (H1: +3%, H2: +15%), but the Group said, as previously reported, due to a challenging first half, the IT division’s NFI was down 16% year on year (H1: -21%, H2: -12%). 


The Group said its IT market segmentation and sales restructure, announced with April’s interim results and carried out in Q4 2016, is already starting to see returns, while it confirmed NFI stabilised in H2 and was broadly in line with H1. It added further benefits are expected to be seen in the new financial year.


Investment in appropriate areas is continuing, reported the Group, announcing sales headcount is up 9% on 31st July 2015 to 544. During the financial year the Group also appointed regional managing directors to run its Asia and Americas operations. It said in order to accelerate the development of its engineering business in the US, a number of staff are transferring to its Dallas office.


Net debt at 31st July 2016 was £27.5m, down £6.1m on 31st July 2015.


The Group confirmed the integration of Networkers (acquired in 2015) continues to go well and is expected to be fully completed by the end of 2016 and that, as announced on 18th July 2016, Matchtech Group intends to rename the Group Gattaca plc, subject to shareholder approval.


The Group reiterated that research it conducted amongst its employees, candidates, and current and potential clients showed the Matchtech name shared by the Group brand (Matchtech Group plc) and the operating engineering brand (Matchtech), could be a source of confusion.


The Group expects to announce its full year results for the 12 months to 31st July 2016 on Thursday 3rd November 2016.


Brian Wilkinson, chief executive officer, said. “As I reported at the time of the Interim Results in April, demand for skilled engineers remains strong in the UK and, notably, we have yet to see any impact on vacancy flow in the six weeks since the EU Referendum.


“We have seen strong growth in our Engineering division and, in Technology, the market segmentation and sales restructuring we have undertaken in the IT business has given us confidence for the new financial year.


“We remain committed to our strategy of being the leading specialist Engineering and Technology recruitment group. The proposed change of plc name is the next step in the Group's development, following the acquisition of Networkers International plc in April 2015. The acquisition brought Telecoms and Technology expertise to Matchtech's existing strength in Engineering and Technology. It has enabled the Group to capitalise on the convergence of the skill sets demanded by these markets and allowed Matchtech to internationalise its existing service offering by leveraging Networkers' global infrastructure.


“Our proposed new name, Gattaca, is a sign of our ambition and I remain confident that we will convert the exciting opportunities available to the Group into growth.”


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