Gattaca plc (LON:GATC), the specialist staffing business, has provided the following trading update for the year ended 31 July 2024.
FY24 Highlights
· Group continuing Net Fee Income1,2 (NFI) expected to be £40m (FY23 restated2: £42.2m), a decrease of 5% year-on-year (YoY), as anticipated.
· Contract NFI up 3% YoY following growth in contractor numbers of 4% during the second half of FY24. This aligns with the Group’s focus on delivering contract growth over the last 18 months. Permanent NFI down 29% YoY (19% on a like for like basis3).
· FY24 Group underlying Profit before Tax expected to be in line with the Group’s previously announced guidance of £2.4m to £2.7m. Statutory net cash at 31 July 2024 of £21m (31 July 2023: net cash of £21.6m).
· The Group’s two largest sectors showed positive trends, with Defence up 7% YoY on a like-for-like basis3, whilst Infrastructure grew by 12% in H2 compared to H1. There has been strong growth in Gattaca Projects of 31% YoY. USA in-country operations have been exited during H2.
· Sales headcount has been managed during FY24 to 291 from 315 at the FY23 year end. YoY H2 productivity per sales head has increased by 6% as the benefits of our market leading digital platform and Sector focus start to be realised.
Dividend
The Board intends to recommend a full year dividend of 2.5p per share, expected to be paid in December 2024 following approval at the AGM. Further details on the proposed dividend timetable will be provided at the time of Gattaca’s final results for FY24.
Outlook
With our growing momentum we expect to increase market share in our target sectors and are well positioned for both investment and further growth as market conditions improve. Whilst mindful of the macro-economic headwinds affecting the recruitment sector, the Board believes it will meet market expectations for FY25.
Notice of FY24 Results
The Company expects to release its results for FY24 on 24 October 2024.
Matthew Wragg, Gattaca Chief Executive Officer said:
“I am pleased with our trading performance, despite unhelpful hiring market conditions. In particular, the growth in our contractor base for the first time in 8 years is satisfying, even more so when the total market is flat or slightly down, so a sign of us winning market share. With increased focus and investment in business development, we have achieved 6% NFI growth in the second half of the financial year compared to the first half. Although permanent recruitment remains challenging, down 19% on a like for like basis, we have seen this area stabilise and marginally grow in Q4 compared to Q2 and Q3.
“We have focused the business on the markets, geographies and services in which we are, or can be, the “go to” recognised provider. We continue to see high engagement, attrition below long-term targets and improving productivity levels amongst our people. We will seek further opportunities for our market leading technology stack to support business growth, improved productivity, automation, and customer experience. As such I believe the Group is well positioned to continue to grow, while in the longer term also benefit from any improvement in the market.
“Recognising that trading conditions are expected to remain at around current levels, we will keep tight control on operating costs during 2025, whilst ensuring we remain well placed to build market share in our chosen sectors.”
1. NFI is calculated as revenue less contractor payroll costs
2. Continuing business excludes the results of our operations based in the USA which were discontinued during the period. The FY23 financial information has also been restated to remove results from discontinued operations, as required.
3. Like for like permanent basis excludes NFI associated with a large permanent Recruitment Process Outsourcing (RPO) client, which the Group took the decision to exit in the prior year.
