REG - Gattaca PLC - Trading Update

GattacaAnnouncement

15/02/2024 07:00

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RNS Number : 1917D  Gattaca PLC  15 February 2024

15 February 2024

 

Gattaca plc

 

("Gattaca" or the "Group")

 

Trading Update

Robust performance in line with market expectations

 

Gattaca plc, the specialist staffing solutions business, today provides the
following trading update for the six months ended 31 January 2024 ("H1 24").

 

 ·             Group Net Fee Income(1) ("NFI") expected to be £18.9m (H1 23(2) £22.5m), a
               decrease of 16% year-on-year ("YoY")

 ·             NFI shows anticipated shift towards Contract 76% / Permanent 24% (H1 23(2):
               68% / 32%), reflecting increased focus on contract market and maintaining
               contractor volumes which ended the period flat with the prior year

 ·             Permanent NFI down 38% YoY as a result of market weakness, with placements
               continuing to show weakness since the turn of the year, and the exit of a
               large permanent Recruitment Process Outsourcing ("RPO") client in prior year
               as referenced at year end

 ·             Significant progress in business development, with two large client extensions
               and two more Managed Service Provider wins

 ·             Defence continues to be the Group's strongest performing sector with 9% YoY
               growth excluding the RPO account exit as above

 ·             Marginal reduction in sales headcount during H1 24 to 312 from 315 at the
               year-end, focused UK headcount investment in specific sectors showing growth
               opportunities, these being Energy, Defence and Gattaca Projects

 ·             The Group expects to report statutory net cash at 31 January 2024 of £22.1m
               (31 July 2023: net cash of £21.6m)

 

 

Notice of Interim Results

The Group will announce its results for the six months to 31 January 2024 on
Tuesday 16 April 2024.

 

 

Matthew Wragg, Chief Executive Officer said:

"Despite the tough market conditions, I am pleased to report the Group is
trading in line with current market expectations. I am also pleased to see our
strategy to invest in business development is starting to bear fruit, with two
large client extensions and two more Managed Service Provider (MSP) wins for
the Group in H1 and a growing pipeline. We continue to see high engagement,
staff attrition below long-term targets and productivity levels beginning to
improve. In H1 we have continued to focus the business more on specific
markets and geographies. We have reduced our workforce in North America.

 

However, the economic conditions have led to a challenging market in H1 and we
have not been immune to this. Permanant fee income is down 38% due to much
lower than anticipated volumes at the back end of 2023 and compounded by
reduced NFI from the exiting of a major programme last year. We anticipate
that Permanant fees will pick up gradually as we go through 2024. Contract
income has remained stable, and we are starting to see growth from our
investment and focus into this area.

 

Recognising that trading conditions are expected to remain challenging, we
plan to keep tight control on operating costs including headcount during H2,
whilst we are mindful to ensure we are well placed to build market share in
our chosen sectors as the economy recovers.

 

I would like to add my personal thanks to everyone in and from the business,
our special community, customers and partners for their support in what has
been an extremely tough week for the Group following the sudden passing of our
very good friend and Chief Sales Officer Grahame Carter. The way everyone has
united is testament to the strength we have as a team. Our love and
condolences go to his family, friends and everyone who had the pleasure to
know him."

 

 

1. NFI is calculated as revenue less contractor payroll costs

2. H1 23 results have been restated for the correction of a FY22 revenue
cut-off error, and the FY23 reassessment of the Group's accounting policy over
how accrued revenue and accrued cost balances have been calculated at the
period end. The aggregated impact of these items on H1 23 reported NFI is
£0.2m reduction. Further details on this error and policy change were
provided in the Group's FY23 Annual Report & Accounts.

 

 

 

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 (Financial PR and IR)              +44 (0) 203 934 6630
 Tim Metcalfe

 Graham Herring

 Florence Chandler

 

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