Around 50 per cent of Matchtech’s net fee income comes from the public sector. So with an imminent general election being fought on spending cuts, the recruitment specialist was right to take a cautiously optimistic stance when reporting first-half results.
For the six month period net fee income was £12.5m, down 25 per cent on the same period last year, but down only 9 per cent on the second half as permanent work began to stabilise. This has now kept steady for 11 consecutive months to March 2010, while contract employment now makes up 77 per cent of fee income, up from 69 per cent. Of the company’s three divisions, engineering, construction and support services, the former was the most resilient as the German operation, launched in August last year, is showing promise.
In order to react quickly to a possible increase in employment demand, headcount was increased 3 per cent and a “material” boost in staff is also expected in coming months. Costs were hacked by an impressive £2.4m, while full-year results will exceed expectations, according to management. This led Brewin Dolphin to increase forecast pre-tax profits to £8.4m from £8.2m and EPS to 25.5p from 24.8p.
Matchtech (MTEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 229p | MARKET VALUE: | £53m | |
| TOUCH: | 225-232p | 12-MONTH HIGH: | 261p | LOW: 121p |
| DIVIDEND YIELD: | 6.8% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 93p | NET CASH: | £0.8m | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 138 | 6.07 | 19.0 | 5.0 |
| 2010 | 125 | 4.41 | 13.6 | 5.0 |
| % change | -9 | -27 | -29 | - |
Ex-div: 2 Jun Payment: 23 Jun | ||||
