REG - Gattaca PLC - Trading Update

GattacaAnnouncement

16/08/2023 07:00

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RNS Number : 4242J  Gattaca PLC  16 August 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET
ABUSE REGULATION (EU NO. 596/2014) AS IT FORMS PART OF UK DOMESTIC LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR").

 

16 August 2023

 

Gattaca plc

 

("Gattaca" or the "Group")

 

Trading Update for the 12 months ended 31 July 2023

 

 

Gattaca plc, the specialist staffing business, today provides the following
unaudited trading update for the financial year ended 31 July 2023 ("FY23").

 

FY 23 Highlights

 

·      Group continuing Net Fee Income(1) ("NFI") expected to be £43.6m
(FY22: £44.1m), a decrease of 1% year-on-year ("YoY"), with the mix split
between Contract 72% and Permanent 28% (FY22: 71%:29%)

 

·      The Group expects to report continuing underlying PBT of £2.5m
for FY23, ahead of expectations as a result of the Group's cost rebalancing
programme and exit from low margin contracts

 

·      Contract NFI was broadly flat YoY driven by the Group exiting
some low margin contracts, as it continued its focus on quality of earnings
and margin. The greatest impact was in permanent recruitment, which was down
c.4% YoY, driven by industry-wide client and candidate challenges,
particularly in the second half

 

·      Ongoing commitments in defence spending provided sector growth of
15% YoY. Managed Service Provider (MSP) wins in the first half of 2023 helped
Mobility to grow 13% YoY. Strong growth in Gattaca Projects of 56% YoY as our
growing capability took advantage of increasing demand for Statement of Work
(SOW) contracts, delivering to agreed milestones

 

·      Continued demonstration of improvements in business trajectory
and culture shown via both staff engagement score, staff retention being ahead
of stated FY23 targets and high customer NPS score (now built into our
operating systems)

 

·      Strong balance sheet with statutory net cash as at 31 July 2023
of £21m (31 July 2022: £12m)

 

·      Completion of share buy-back in May 2023 returning £0.5m to
shareholders

 

Outlook

 

In light of the ongoing macroeconomic headwinds, particularly the uncertainty
over the timing of any recovery in the wider economy and the Group's focus on
sustainable contract growth, the Board currently expects profit before tax for
FY24 to show marginal growth on FY23.

 

Return of Capital

 

The Board intends to recommend a full year dividend in line with its policy of
2.5p per share, accompanied by a one-off special dividend of 2.5p per share,
both of which are expected to be paid in January 2024. Further details on the
proposed dividend timetable will be provided at the time of the Group's final
results.

 

Furthermore, the Board intends to launch a new share buyback programme with
the intention of returning up to £0.5m to shareholders. A further
announcement will follow in due course.

 

FY23 Results

 

The Company expects to release its results for FY23 on 24 October 2023.

 

Commenting, Matthew Wragg, Chief Executive Officer said:

 

"The continued improvements in culture, staff retention and productivity are
good signs that we are becoming a stronger business. Our progress has been
impacted by the decline in the wider market, and although that is frustrating,
I am pleased that we were able to continue to simplify and improve the
business throughout the year and manage our cost base so as to report an
improvement in profitability in the second half of the year."

 

"We continue to remain mindful of the macro-economic headwinds, which have
impacted demand and candidate sentiment across the recruitment sector and
slowed our speed of recovery. We expect permanent recruitment to remain
subdued in the short term and are increasing our focus on contractor growth,
which takes longer to reflect in NFI. The markets that we operate in and STEM
skillsets that we provide have the right long-term fundamentals and we enter
FY24 as a leaner, more efficient and productive business, well positioned to
take advantage of expected recovery in the market."

 

 

(1)NFI is calculated as revenue less contractor payroll costs

 

 

For further information, please contact:

 

 Gattaca plc                                 +44 (0) 1489 898989
 Matthew Wragg, Chief Executive Officer

 Oliver Whittaker, Chief Financial Officer
 Liberum Capital Limited (Nomad and Broker)  +44 (0) 20 3100 2000
 Lauren Kettle Richard Lindley
 IFC Advisory                                +44 (0) 203 934 6630
 Tim Metcalfe

 Graham Herring

 Florence Chandler

 

 

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