Gattaca Plc (LON:GATC) Chief Executive Officer Matthew Wragg caught up with DirectorsTalk for an exclusive interview to discuss what the business does, main highlights & key drivers in H1, sustainable profitable growth, reinstating the dividend, and driving further growth in H2.
Q1: Matthew, can you just start though by reminding our listeners what Gattaca does and for who?
A1: We’re a business that helps arrange your companies, solve problems primarily linked to technology and engineering sectors. We’ve got a large recruitment offering which helps about 10,000 people a year find new opportunities and has thousands of contractors out on assignments across sectors such as technology, defence, energy, infrastructure and mobility. We also help large organisations design, build and run their workforce strategies and we help small start-ups find their second hire. In addition to that, over the last ten years we’ve been building out a successful statement of work engineering capability as well.
Q2: Could you talk us through the main highlights for the first half and the key drivers behind them?
A2: It’s been a challenging market as all of our peers will attest, but I’m pleased to see we’ve seen revenue growth as we’ve continued to grow our contractor base which has been a top priority for us for the last couple of years.
We also have been focusing on some very specific markets, and I’m pleased to see that we have seen good growth in those markets as well, so delivering on that strategic investment and lots to come on that, I’m sure. We’ve seen the confidence both from a client and a candidate point of view within the permanent market has been difficult. It’s a volatile world out there which has meant we’ve seen some drop in the perm NFI which means we’re just back minus three on NFI which frankly I’m quite happy with. It’s more in the market sectors and services that we want to be doing. We’re paying half-year dividends for the first time in a long time which is good to see. And we still have a really strong cash balance. So, some good highlights.
It is a tough world out there, so I’m pleased to see us moving forward in the areas that we’re really trying to focus on. For us it’s about doing that in the right way, making sure that we’ve got a really engaged workforce. We’re seeing our record levels of engagement continue to grow despite the market conditions. Our customer NPS is continuing to grow despite the market conditions and actually the utilisation of our tech stack that we invested in a number of years ago now is really starting to benefit. All that’s coming together to help us help everyone in our business even more successful which we’ve seen a 13% increase on that per sales head. So, some good highlights.
Q3: You touched on strategy. Now you’ve outlined four strategic priorities for sustainable profitable growth. Could you walk us through these and how they’re shaping your approach?
A3: Yeah, I’m obsessed about culture. Whichever service our customers want by whichever our brand, it fundamentally comes back to having some really great skilled people doing some work. We’re ultimately a group which is a people business that helps people work with people, so culture is always going to be huge.
We’ve made some really good, award-winning strides within that we will continue obsessive about that. I’m a massive believer that happy colleagues make for happy customers and that’s certainly coming through in our performance as well. So, culture is huge.
Externally focused is the next big one and we absolutely live and breathe the markets that we’re super focused on. I think that’s really important if we’re going to be that partner that everybody wants by their side to help their business be a winning business. You’ve got to be in the market and we’ve really, really seen improvement in our external focus in the last 12 months. We’ve got some really exciting plans over the next six months as well, which we’ll continue to push on that.
Operational effectiveness. We’ve been improving that over the last three years since we’ve been in situ and again, some more solid strides taken. I think productivity per head is up about 13%, which is good and it’s just a sign of our continued focus on who we are, what we do, how we do and utilisation of the tools. I’m massively passionate about everybody in the organisation being able to be as successful as they possibly can be so continued focus on that as we move forward.
Cost rebalancing, it’s just about good fiscal awareness and fiscal control. I think we’ve put a lot of things in place over the last couple of years, which is enabling that but also not being afraid to look at the opportunities for bold investment as well.
We’ve certainly done some of those over the last year, which have started to come through in results already, which is great, and we will continue to look for those as we move forward.
Q4: You mentioned earlier that you’ve reinstated the dividend for the half year. What drove that decision? And what do you hope that it signals to investors?
A4: I hope it signals that we back ourselves, I think, in a pretty volatile, crazy market right now. We’re confident that we will continue to deliver on our promises, so I think that’s as big a signal. I think, for far too long, we haven’t been able to do that so it’s nice to be getting back in that habit of paying a dividend. I don’t think at these levels anybody’s going to retire particularly quickly from it, but it is an indication of our confidence that we’re heading in the right direction.
Q5: Now, you hinted at some big things ahead. Just looking ahead, then, what is next for Gattaca? How do you plan to build on your strong H1 performance to drive further growth into the second half?
A5: Our H2 is always a bigger period for us compared to our H1 by nature of the seasonality of the work that we support, but also as you continue to grow your contract base, you pull a larger workforce out in the second half of the year compared to the first half of the year, and less holidays, etc. So, we are planning simply to replicate the growth that we saw H2 last year. We’re going to continue to do that this year, whilst navigating what is a pretty rocky market in the permanent world.
I think our range of services, including our successful statement of work, will enable us to do that, and I hope to exit the year well, and then we go again. I think additionally, in the second half, we’ve said it before, we will continue to look for good, really well, culturally aligned businesses so we can look at bolt-ons to expedite our growth in the markets that we’re super focused on.
