REG-Matchtech Group PLC Trading Update

Released : 06/08/09 06:00

http://pdf.reuters.com/Regnews/regnews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20090806:RnsF9626W
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RNS Number : 9626W  
  
Matchtech Group PLC  
  
06 August 2009  
  
6 August 2009  
  
Matchtech Group plc  
  
Trading Update  
  
Matchtech Group plc ("Matchtech" or the "Group"), one of the UK's leaders in 
specialist technical and professional recruitment, provides the following 
trading update ahead of the publication of its preliminary results for the year 
ended 31 July 2009 on Thursday 8 October 2009.  
  
Trading in the twelve months ended 31 July 2009 has been in line with the 
Board's expectations set at the time of issuing the Interim Results on 2 April 
2009.  
  
In the twelve months ended 31 July 2009 the Group has seen a 9% fall in Net Fee 
Income ("NFI") on the previous year to £30.2m, with H1 up 8% and H2 down 24%. 
The annual fall was predominantly due to a drop in demand for permanent 
recruitment services in H2.  
  
Permanent fees for the year were down 24% to £8.3m, with fees each quarter of 
£3.0m, £2.2m, £1.7m and £1.4m. The Built Environment sector saw the largest 
annual fall of 52% with Professional Services falling by 23% and Engineering by 
9%.  
  
NFI from contract placements was essentially unchanged from the previous year at 
£21.9m with NFI each quarter of £6.0m, £5.4m, £5.5m and £5.0m. Built 
Environment's annual fall was 5%, Engineering's 4%, whilst Professional Services 
grew by 9%. Although contractor numbers have essentially remained stable since 
31 January 2009, contract margins remained under pressure.  
  
The resultant annual business mix was 73% (2008: 67%) of NFI generated from 
contract placements.  
  
The Group took early action on its cost base and staff numbers have reduced 20% 
from their peak of 330 in December 2008 to 263 at 31 July 2009 with no 
exceptional charges arising.    
  
The Group continued to benefit from low net debt which at 31 July 2009 was £1.3m 
(31 July 2008: £3.1m, 31 January 2009: £3.7m).   
  
Short-term trading conditions remain challenging with no sign yet of any pick up 
in the level of permanent recruitment and continued pressure on contract 
margins. As a result the Board remains cautious with regard to the outlook for 
2010 and its expectations have been re-set to reflect this trading environment.  
  
The flexibility and cost benefits from the Group's single site model allow the 
Board to continually review the Group's cost base, whilst maintaining the 
underlying strength of the business ready for when the market improves.  The 
diversity of our industry sectors and our focus on clients with long term 
infrastructure projects should continue to support our larger contract placement 
activities, giving the business a level of resilience.  
  
Matchtech continues to invest for the future and to pursue new organic growth 
opportunities, extending the reach of our services which the Board is confident 
will increase growth in the longer term.  
  
Accordingly the Board believes that the Group is well positioned to trade 
profitably and generate cash through the downturn and remains committed to its 
existing dividend policy.  
  
For further information please contact:  
  
 
  Matchtech Group plc                      01489 898989   
  George Materna, Chairman                                
  Adrian Gunn, Chief Executive Officer                    
  Tony Dyer, Chief Financial Officer                      
                                                          
  Hogarth Partnership                      020 7357 9477  
  John Olsen / Ian Payne                                  
                                                          
  Arbuthnot Securities                     020 7012 2000  
  James Steel                                             
  
  
Background on Matchtech (AIM: MTEC.L)  
  
Established in 1984, Matchtech specialises in the provision of contract and 
permanent staff and has grown organically to become one of the UK's leading 
technical and professional recruitment specialists.  
  
Operating from a single site near Southampton, Matchtech provides predominantly 
professionally-qualified candidates to a broad range of clients across the UK in 
the Engineering, Built Environment and Professional Services sectors.    
  
 
This information is provided by RNS  
  
The company news service from the London Stock Exchange  
  
  END  
  
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