Admission to AIM

Matchtech Group PLC
27 October 2006



27 October 2006


                              MATCHTECH GROUP PLC

                          ADMISSION TO TRADING ON AIM


Matchtech Group plc ('Matchtech' the 'Group' or the 'Company'), the fast-growing
technical recruitment group, announces that following a successful placing, its
shares have today been admitted to trading on AIM under the ticker symbol MTEC.


Highlights

   • Based on the Placing Price of 310p per Ordinary Share and on 22,420,406
     Ordinary Shares in issue, Matchtech has a market capitalisation of £69.5
     million on Admission (£72.4 million including outstanding EMI options*);

   • The Placing raised £22.0 million before expenses for the selling
     shareholders; no new money was raised for the Group;

   • On Admission, 31.7% of the Group's issued share capital is held by
     institutional investors and 53.2% by the Group's Directors;


Arbuthnot Securities Limited is Nominated Adviser and Broker to Matchtech.


* On Admission, EMI options over 946,026 Ordinary Shares will remain unexercised
under the Existing Share Scheme


Background on Matchtech

Matchtech specialises in the provision of contract and permanent staff in the
Engineering, Built Environment and Support Services sectors across the UK.

It was established in 1984 and has grown organically to become the UK's 4th
largest technical and engineering recruitment specialist and one of the UK's 20
largest recruitment companies (Source: Recruitment International Top 100 Report
- August 2006).

The candidates placed by Matchtech are supplied to clients through a variety of
client relationships, from contingency-based placements through to master vendor
contracts. The Engineering and Built Environment recruitment markets are being
driven and are underpinned by the demand for qualified project and contract
staff needed for the design, construction, management and maintenance of
long-term capital assets and infrastructure projects funded by both the private
and public sectors.

Operating from a single site near Southampton, Matchtech provides predominantly
professionally-qualified candidates to clients in a broad range of industries
including oil and petrochemicals, marine, aerospace, water, electronics, civil
engineering, building structures and transport infrastructure. It structures its
business across three main sectors: Engineering, Built Environment and Support
Services.


Summary financial information

Set out below is a summary of the Group's financial information for the three
years ended 31 July 2006:

                           Year ended          Year ended          Year ended
                         31 July 2004        31 July 2005        31 July 2006
                               £000's              £000's              £000's

Turnover                       94,828             124,149             158,128
Gross profit (NFI)             13,172              16,953              21,039
Operating profit                4,470               5,971               8,392
Profit before tax               4,078               5,465               7,843
Profit after tax                2,760               3,665               5,745


The Group's financial information for the three years ended 31 July 2006 has
been prepared under UK GAAP and has been adjusted to take account of FRS 20
'Share-based Payment'.

Net Fee Income ('NFI') in the year ended 31 July 2006 of £21.0 million was 24.1
per cent. up on the previous year, and represented a gross margin of 13.3 per
cent. Operating profit in the year ended 31 July 2006 was 40.5 per cent. up on
the previous year, and represented a conversion rate on NFI of 39.9 per cent.


Current trading and prospects

Trading since the end of the last financial year has been in line with the
Directors' expectations, with the Group continuing to see strong demand for its
services from clients as well as the presence of a number of new business
opportunities. Consequently, the Directors view the Group's future with
confidence.


Placing statistics

Placing Price                                                               310p

Number of Sale Shares placed on behalf of the Selling
Shareholders                                                           7,103,602

Number of Ordinary Shares in issue immediately following
Admission*                                                            22,420,406

Percentage of the Company's issued share capital placed pursuant  
to the Placing                                                    31.7 per cent.

Market capitalisation of the Company at the Placing Price on       
Admission                                                          £69.5 million

AIM symbol                                                                  MTEC


* On Admission, EMI options over 946,026 Ordinary Shares will remain unexercised
under the Existing Share Scheme



For further information please contact:

Matchtech Group plc                                                 01489 898989
George Materna, Chairman
Paul Raine, Managing Director
Tony Dyer, Finance Director

Arbuthnot Securities Limited                                       020 7012 2000
Andrew Fullerton / Ian Williams

Hogarth Partnership (for Matchtech)                                020 7357 9477
John Olsen / James Longfield / Fiona Noblet


Further information on Matchtech attached.



FURTHER INFORMATION ON MATCHTECH

(The following is a summary of information contained in the Admission Document,
copies of which are available from Arbuthnot Securities Limited, Arbuthnot
House, 20 Ropemaker Street, London EC2Y 9AR)


1. The technical recruitment sector

The UK recruitment sector is a large, diverse market which is highly fragmented
and competitive. According to Recruitment and Employers Confederation's Annual
Recruitment Industry Survey 2004/5 ('REC Survey 2004/5'), the UK recruitment
market was worth £23.5 billion in 2004/5 in terms of sales (including temporary
workers' and contractors' salaries).

Within the UK recruitment market, the technical and engineering recruitment
market is estimated to be worth approximately £3.2 billion1, representing some
13.7 per cent. of the overall market. According to the REC Report on Jobs (the
'REC Report')2, over the past eighteen months demand for temporary/contract
staff within the Engineering/Construction sector (the sector within the REC
Report most closely aligned with the Group's activities) has grown each month
and, each month, has registered the highest increase of all of the eight sectors
which the REC Report covers.

The Group is predominantly exposed to technical and engineering recruitment
markets. A key underlying driver of the performance and growth of the technical
market relates to long-term capital asset and infrastructure projects within
both the private and public sectors. The Directors believe that the Group is
well-placed to benefit from these long-term projects, and is able to address the
changing nature of staffing requirements across specific projects' life cycles
(including planning, design, build, commissioning, operation and maintenance).


1 Source: REC Survey 2004/5

2 Source: Based on REC Report on Jobs monthly reports between October 2005 and
September 2006. The sectors covered by the REC Report on Jobs are: Secretarial &
Clerical; Accounting & Finance; Executive & Professional; Computing & IT; Blue
Collar; Engineering/Construction; Hotel & Catering; and Nursing/Medical/Care.


2. Business Overview

Matchtech operates through three main sectors: Engineering, Built Environment,
and Support Services.


Engineering

The Engineering sector is the largest of the three sectors within the Group and
in the year ended 31 July 2006 generated 56 per cent. of the Group's NFI. The
Engineering sector addresses the demand for qualified and skilled engineers to
work on projects across six divisions: Offshore and Marine, Aerospace &
Automotive, Process & Scientific, Electronics & Software Systems, Water, and
Production & Skilled Trades.

Clients include Devonport Royal Dockyard, VT Group, GKN, Meggitt, suppliers to
the Formula One industry, a number of luxury car manufacturers, JCB, ExxonMobil,
Cardinal Health and Severn Trent Water.

The Engineering sector has demonstrated strong growth, having increased its NFI
from £7.6 million in the year ended 31 July 2004 to £11.9 million in the year
ended 31 July 2006 and operating profit from £2.9 million to £5.2 million in the
same period. The growth has been largely driven by the demand for engineers in
long-term capital asset and infrastructure projects in both the private and
public sectors. The Directors believe that Matchtech has gained market share as
a result of being able to meet the recruitment requirements of its clients,
providing good candidates ahead of its competitors, broadening client
relationships and successful marketing to new clients.

The requirements for engineers from Matchtech's clients often stretch across a
specific project's life cycle (including planning, design, build, commissioning,
operation and maintenance), with the type of placements required changing
throughout the project's life. As a result, the majority of placements within
the sector are contract based, with 78 per cent. of the sector's NFI in the year
ended 31 July 2006 being generated through the placement of contract personnel.


Built Environment

The Built Environment sector specialises in the provision of white collar
engineers to the construction, civil engineering and building design industries.
Clients include Transport for London, Atkins, Buro Happold, Mouchel Parkman and
Bovis Lend Lease.

The sector's NFI has grown from £3.2 million in the year ended 31 July 2004 to
£4.5 million for the year ended 31 July 2006 and operating profit has increased
from £1.1 million to £2.1 million in the same period. This growth has been the
result of close relationships with leading engineering consultancies in the
design arena, the number of construction projects being undertaken throughout
the UK and Matchtech's access to skilled candidates in a sector with
acknowledged skills shortages.

Demand for engineers within the building and construction sectors has been
driven by growth in the commercial market and the expansion of public sector
investment in large infrastructure projects. The Group has benefited from this
growth through a broad range of relationships with a number of key participants,
contractors and sub-contractors in the sector.


Support Services

The Support Services sector provides complementary recruitment services to the
Group's technical client base and is developing new markets for the Group in
various related specialisms.

The services provided by the Support Services sector include the provision of
recruitment services across five divisions: Information Technology, Procurement
& Supply Chain, Sales & Marketing, Human Resources & Training and a Managed
Services Division focused on the outsourcing of vacancies not covered by
Matchtech to second tier agencies under master vendor contracts.

The Support Services sector has experienced rapid growth, having increased NFI
from £2.5 million in the year ended 31 July 2004 to £4.6 million in the year
ended 31 July 2006 and more than doubling its operating profit from £0.5 million
to £1.2 million in the same period. The growth has been driven by increased
penetration in cross selling complementary services to clients in the
Engineering and Built Environment sectors and through the development of a new
client base outside the Group's traditional technical areas.

The Support Services sector has also managed to win significant new business
outside the traditional technical recruitment market, including with Friends
Provident, Skandia Life Assurance, Bovis Lend Lease and BAT.

In contrast to the other two sectors within the Group, the split between
contract and permanent placements within the Support Services sector is broadly
even. This is largely as a result of the nature of candidate roles being filled,
and also reflects the Group's strategy of fulfilling permanent placements as a
means of establishing and developing contract client relationships.


Client relationships

Matchtech provides contract and/or permanent recruitment services to its clients
through three main types of relationships: contingency; preferred supplier; and
master vendor contracts. The Directors view the balance between the three types
of relationships achieved in the year ended 31 July 2006 as attractive and plan
to maintain an appropriate balance in future years.

Matchtech has a broad and balanced mix of clients from SMEs to large
multinational companies across its three operating sectors and the Directors
believe it is not overly dependent on any one client. In the year ended 31 July
2006, the Group's two largest clients each represented approximately 6 per cent.
of the Group's NFI and have been clients of the Group since 1996 and 2000
respectively.


Candidates

Matchtech has an extensive candidate database of over 370,000 candidates, which
principally comprises white collar engineers with specific skills and
qualifications. Candidates are typically sourced through the internet, alongside
other more traditional routes, including the press, sector journals and
publications and referrals. The Company also places an importance on graduate
recruitment of candidates and has a graduate recruitment team which attracts
engineering and built environment graduates direct from universities on behalf
of clients.


Group infrastructure

Single site

Matchtech operates from a single site between Southampton and Portsmouth. This
comprises an 18,500 square foot office building together with immediately
adjacent 11,500 square foot office space that the Group has recently secured to
accommodate the increasing scale of the business. In addition, the Group also
has on-site representation at certain client locations as part of its master
vendor contracts.

The Directors believe that the single-site model is a key differentiator of the
Group's business model, providing it with a number of significant advantages
over many of its multi-site competitors in the technical recruitment market,
including:


   • an increased opportunity for cross-selling additional services to
     clients;

   • improved speed of decision making, enabling staff to provide an improved
     service to clients and candidates;

   • enhanced management of staff, training and career development;

   • greater control of processes, resulting in productivity benefits; and

   • operational efficiencies in support and infrastructure functions.


The Directors believe that, as a result of the contract-based nature of the
technical recruitment market in the UK and the increasing role of information
technology in delivering services to both candidates and clients, Matchtech is
able to provide effective recruitment services throughout the UK from its
single-site location.


IT systems and support

As part of Matchtech's continuing focus on delivering effective and efficient
services, the Group has developed, in-house, an IT system to address the
specific requirements of its business, integrated to payroll and accounts
software. The systems allow staff quickly and effectively to search the Group's
candidate database, enabling them to respond promptly and accurately to a
client's requirements.

Matchtech's single-site location allows the business to operate with a
relatively small IT support and maintenance team and the Directors believe that
the Group's IT strategy gives Matchtech an ongoing competitive advantage over a
number of competitors, as well as a secure and efficient platform from which the
business can operate.


Staff

Alongside the Group's significant focus on its recruitment processes, a further
key element of Matchtech's success has been its ability to retain key staff
members. In the year ended 31 July 2006, total staff turnover was under 20 per
cent. Furthermore, among Executive Directors and the Senior Management, there
have been no departures in the last three years, and their average length of
service with the Group (and its predecessor businesses, Matchmaker Personnel and
Matchtech Engineering) is 11 years.

The Directors believe that the high staff retention rate arises from a clearly
laid out career path, which the Directors believe is improved by the single-site
location and the broader promotion opportunities this affords staff. The Group
also has in place an incentivisation programme utilising both bonus schemes and
share-awards to align employees' remuneration to their contribution to the
overall performance of the Group.

Following Admission, the employees (excluding Directors) will own 9.7 per cent.
of the issued share capital of the Company, will have EMI options over a further
856,020 Ordinary Shares and LTIP awards over 203,386 Ordinary Shares.


3. Board of Directors

The Board of Matchtech has extensive knowledge of the recruitment market with
over 115 years' experience of the industry. The Board comprises a Chairman,
three Executive Directors and three non-executive Directors as follows:

George Materna, aged 53, Chairman, has 30 years' experience of the recruitment
industry, and is the founder of Matchtech, having founded Matchmaker Personnel
in 1984 and Matchtech Engineering in 1990 before combining the two businesses in
2002 to form Matchtech. He is a fellow of the Chartered Institute of Personnel
and Development.

Paul Raine, aged 46, Managing Director, joined Matchtech in 1990 and was
instrumental in establishing Matchtech Engineering, having had eight years'
sales experience in the construction industry after graduating from Southampton
University. Paul was appointed Managing Director of Matchtech Engineering in
1998, and played a key role in helping to combine the two businesses. He was
subsequently appointed Managing Director of the Group in 2002 to oversee the
day-to-day management of the business and the implementation of new initiatives
and strategies across the Group.

Adrian Gunn, aged 41, Sales Director and Deputy Managing Director, joined
Matchtech in 1988 as a recruitment consultant and was appointed a divisional
director in 1998. He was appointed to the Board in 2004 as Business Development
Director and took on his current role as Group Sales Director in 2005. Adrian
oversees the major client relationships of the Group and plays a key role in
ensuring the divisional heads develop and win new clients.

Tony Dyer, aged 37, Finance Director, is a Fellow of the Chartered Institute of
Management Accountants. Tony qualified as a Chartered Management Accountant in
1995 before joining Matchtech in 1996 as a management accountant. Following a
period as financial controller, he was appointed to the Board as Finance
Director in 2004.

Andy White, aged 50, Non-executive Deputy Chairman, is a chartered engineer, a
fellow of the Royal Institute of Naval Architects and a member of the Royal
Aeronautical Society. Andy formed Matchtech Engineering with George Materna in
1990, having previously had a number of years experience in the marine sector.

Ric Piper, aged 54, Non-executive Director, qualified as a Chartered Accountant
in 1977 and has held a number of senior finance roles within leading UK
companies including ICI, Citicorp and Logica, becoming Finance Director of
Logica (UK) in 1990. He was Group Finance Director of WS Atkins plc from 1993 to
2002, being closely involved in its successful London Stock Exchange flotation.
He was Senior Independent Director of Synstar from 1999 to 2004. Since 2003 he
has been involved at board level advising on the growth and development of
several companies, including various listings on AIM. He is currently Chairman
of Granby Oil & Gas plc and HLBBshaw Group plc.

Stephen Burke, aged 46, Non-executive Director, has over 25 years' experience in
the recruitment industry having joined Michael Page in 1981 after graduating
from Durham University. He was appointed as a Director of Michael Page
International in 1988 with responsibility for development of overseas businesses
in the Netherlands and Germany. He returned to the UK in 1996 and held two
divisional Managing Director roles before being appointed Managing Director of
Michael Page in the UK and a Director of Michael Page International plc in 2001
until 2005.


4. Summary: Key strengths

Matchtech has developed into a leading UK technical recruitment company. The
Directors believe the key strengths of the Group are:

  • strong track record of organic growth - the Group has achieved organic
    growth in NFI of 21.6 per cent. compound between the years ended 31 July
    1997 and 31 July 2006. NFI and operating profit compound annual growth of
    26.1 per cent. and 37.0 per cent. respectively have been achieved during the
    period between the years ended 31 July 2004 and 31 July 2006;

  • experienced management team and high staff retention - key to the
    success of the business and its organic growth record has been the
    experience of the management and an ability to attract and retain high
    quality staff. The Group has developed and implemented incentive schemes for
    its employees which will continue to align their interests with those of
    shareholders;

  • resilient, contractor-driven business with effective permanent
    recruitment strategy targeting sectors with long-term investment horizons -
    the Group is focused on the technical recruitment market, with growth being
    driven and underpinned by investment in long-term capital asset and
    infrastructure projects funded by both the private and public sectors;

  • broad spread of clients and sectors, with many long-standing
    relationships - the Group has developed long-term relationships with a broad
    mix of large and small clients involved in private and public sector work
    through a variety of contracts. The Directors further believe that the Group
    has no over-reliance on any single client, with the Group's top two and top
    20 clients generating only 12 per cent. and 35 per cent. of NFI in the year
    ended 31 July 2006 respectively;

  • effective systems and processes, covering the UK from a single site with
    considerable growth potential - the Group addresses the UK technical
    recruitment market from a single site enabling it to offer the full range of
    client services from an efficient base and better career opportunities and
    environment for its employees; and

  • business balance providing stability, growth and cash generation for
    shareholders - the Group has delivered considerable organic growth and cash
    generation for its shareholders.



                                 DEFINITIONS

'Admission'               the admission of the Ordinary Shares to trading on 
                          AIM becoming effective in accordance with the AIM 
                          Rules

'AIM'                     the market of that name operated by London Stock 
                          Exchange

'AIM Rules'               the rules of AIM governing admission to and the 
                          operation of  AIM for AIM companies and their 
                          nominated advisers as published  by London Stock 
                          Exchange from time to time in relation to AIM 
                          traded securities

'Board' or 'Directors'    directors of the Company

'Company' or 'Matchtech'  Matchtech Group plc and where the context requires, 
                          all or any of its subsidiaries

'EMI'                     Enterprise Management Incentive

'EMI options'             options granted by the Company to employees under 
                          the Existing Share Scheme, with applicable tax and 
                          national insurance benefits

'Existing Share Scheme'   the share incentive arrangements adopted by the 
                          Company on 2 December 2002, including the EMI option 
                          scheme

'Group'                   the Company and all or any subsidiaries

'Ordinary Shares'         the ordinary shares of £0.01 each in the capital of 
                          the Company to be admitted to trading on AIM (and 
                          'Ordinary Share' shall be construed accordingly)

'Placing'                 the conditional placing by Arbuthnot on behalf of 
                          the Selling Shareholders of the Sale Shares pursuant 
                          to the Placing Agreement and the Selling Shareholder 
                          Placing Deeds

'Placing Agreement'       the conditional agreement dated 23 October 2006 
                          between the Company, the Directors and Arbuthnot, 
                          relating to the Placing

'Placing Price'           310p per Sale Share

'Sale Shares'             the 7,103,602 Ordinary Shares to be sold to Placees 
                          under the Placing pursuant to the Placing Agreement 
                          and the Selling Shareholder Placing Deeds

'Selling Shareholders'    the Shareholders who are selling Ordinary Shares in 
                          the Placing pursuant to the Placing Agreement and the 
                          Selling Shareholder Placing Deeds,

'Selling Shareholder      Placing the conditional agreements dated 23 October 
Deeds'                    2006 between the Selling Shareholders (other than the 
                          Directors) and Arbuthnot, relating to the Placing of 
                          such Selling Shareholders' Sale Shares




                      This information is provided by RNS
            The company news service from the London Stock Exchange