Trading Update for 12 months ended 31 July 2018

RNS Number : 5349W

Gattaca PLC

02 August 2018

 

2 August 2018

Gattaca plc

("Gattaca" or, "the Group")

Trading Update for 12 months ended 31 July 2018

Gattaca plc (LSE-AIM: GATC), the UK's leading specialist Engineering and Technology recruitment business, today provides the following pre-close trading update for the 12 months ended 31 July 2018.

	FY 2018	FY 2017	Change	Constant Currency
	£m	£m	%	%
Contract NFI	56.7	56.4	+1%	+1%
Permanent NFI	22.1	18.3	+21%	+22%
Total NFI	78.8	74.7	+6%	+6%

Like for Like1	H1				H2				FY
	2018 H1	2017 H1	Change		2018 H2	2017 H2	Change		2018	2017	Change
	£m	£m	%		£m	£m	%		£m	£m	%
Contract NFI	28.8	29.6	-3%		27.8	30.0	-7%		56.7	59.6	-5%
Permanent NFI	11.0	9.5	+16%		11.2	9.1	+23%		22.1	18.6	+19%
Total NFI	39.8	39.1	+2%		39.0	39.1	0%		78.8	78.1	+1%
	2018 H1	2017 H1	Change		2018 H2	2017 H2	Change		2018	2017	Change
	£m	£m	%		£m	£m	%		£m	£m	%
Engineering	24.2	23.5	+3%		23.2	23.4	-1%		47.4	46.9	+1%
Technology	8.5	8.8	-4%		8.0	8.4	-5%		16.5	17.2	-4%
UK	32.7	32.3	+1%		31.2	31.8	-2%		63.9	64.1	0%
International	7.1	6.8	+5%		7.8	7.2	+8%		14.9	14.0	+7%
Total NFI	39.8	39.1	+2%		39.0	39.0	0%		78.8	78.1	+1%

¹ Like for Like (i) assumes RSL had been owned for the entire prior period, and (ii) is calculated on a constant currency basis

·     Group NFI expected to be £78.8m, up 6% on prior year and 1% on an underlying basis
·     FY18 underlying PBT expected to be broadly in line with market expectations
·     UK Engineering NFI grew 1%, with strong performances seen in our Engineering Technology, Auto, Infrastructure, Maritime, Barclay Meade and Alderwood business units. The division saw a slight decline of 1% in H2, with a positive performance in the majority of our business units offset by lower RSL NFI as well as ancillary Solutions income, which tend to be lumpy in nature. We are particularly encouraged by the trend in Q4, with the majority of our Engineering business units demonstrating healthy run rate growth
·     UK Technology NFI declined by 4%, with NFI growth in IT of 4% offset by a decline in Telco of 24%
·     International saw NFI growth of 7%, driven by a continued very strong performance in the Americas (+33%) but tempered by weaker markets elsewhere
·     The shift towards Permanent recruitment in the first half continued into the full year, partly driven by the acquisition of a number of RPO Solutions clients, which are high-quality and multi-year contracts. Permanent represented 28% of FY18 NFI compared to 24% in the prior year
·     Our cost containment initiatives remain on track and we have achieved our 2018 target. We continue to seek cost reduction opportunities
·     Group net debt at 31st July 2018 is expected to be in the order of £46m (July 2017: £40.3m); the increase comprising a final £3.6m payment for the RSL earn-out and working capital movements
·     The review of our international footprint, low profitability accounts and withholding tax generating activities, as announced at the time of our interim results in April, is nearing completion and we expect to update the market on this shortly

Patrick Shanley, Chairman said, "The second half of the year has been one of steady progress for Gattaca as we have worked to stabilise and simplify the business. We are pleased with the performance of UK Engineering and encouraged by the improving trend we saw across Q4 in the majority of our business units. In UK Technology we were pleased with the performance in our IT division, and Internationally our offices in the Americas, in particular, continue to grow strongly. Underlying PBT for the full year is expected to be broadly in line with market expectations.

"We are currently reviewing our international footprint and expect to update the market in the coming months, and our cost containment measures are on track. We are also pleased to report that our CEO recruitment process is at an advanced stage."

The Group expects to announce its full year results for the 12 months to 31 July 2018 on Thursday 8 November 2018.

For further information please contact:

Gattaca plc	[phone]
Patrick Shanley, Chairman     Salar Farzad, Chief Financial Officer
Citigate Dewe Rogerson	[phone]
Louise Mason-Rutherford / Nick Hayns
Numis Securities Limited	[phone]
Michael Meade / Kevin Cruickshank / Tom Ballard

The information communicated in this announcement contains inside information for the purposes of Article. 7 of the Market Abuse Regulation (EU) No. 596/2014.

 

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