Matchtech's profits slip

Recruiter Matchtech has defied the economic gloom by reporting a 14 per cent rise in net fee income (NFI) during the year, to £29.8m. Strong demand for engineers, for such projects as the new Queen Elizabeth Class aircraft carriers, helped drive the improvement. But investment in the sales force, and margin pressure at the contract business - contract margins fell over a percentage point to 6.3 per cent - helped profits to fall overall.

Chief executive Adrian Gunn said that Matchtech 's resilience reflected the fact that funding for long-term projects wasn't be hit by austerity measures. Regarding the aircraft carriers, engineers are required at all stages of the build - which protects revenues. This helped UK permanent fees soar 61 per cent, driving UK NFI up 10 per cent to £23.4m. In fact, the strong permanent recruitment showing is helping to shift the business mix and permanent fees now generate 32 per cent of group NFI; up from 23 per cent previously. Meanwhile the volume of activity grew in the second half - as evidenced by a 15 per cent increase in contractors on assignment to over 6,000.

Broker Peel Hunt expects adjusted pre-tax profit of £9.3m for 2012, giving adjusted EPS of 29.2p.

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