Recruiter Matchtech (MTEC) specialises in hard-to-fill roles within the UK engineering sector and right now that is a good place to be. Skills shortages and strong demand for contract labour from the likes of Babcock (BAB) and BAE Systems (BA.) helped drive a rise in the number of engineering contractors on assignment from 5,000 at the start of the year to over 5,500 by the year-end. Net fee income rose by 6 per cent and underlying operating profit jumped by 28 per cent on the back of rigorous cost control and improved efficiencies. And Matchtech further sealed its reputation as an Aim income stock after the board declared a 15 per cent hike in the full-year dividend.
Chief executive Adrian Gunn said that his company's technology sector recruiter Connectus is trading strongly and winning higher-margin business, with the recent acquisition of specialist Oracle recruitment agency helping to drive expansion. The permanent market place, which makes up around 30 per cent of Matchtech's net fee income, is still tough as employers plump for the flexibility of contractors rather than the greater commitment attached to permanent staff. But Mr Gunn said that there are now early signs of recovery here, with improving candidate confidence and better economic conditions.
Analysts at Numis Securities expect flat adjusted EPS of 32.2p this year as rising net fee income is somewhat offset by the costs of investment in IT, rising to EPS of 35.6p the following year.
MATCHTECH (MTEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 503p | MARKET VALUE: | £123m | |
| TOUCH: | 495p-510p | 12-MONTH HIGH: | 510p | LOW: 226p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 132p | NET DEBT: | 32% | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 270 | 11.30 | 26.4 | 15.6 |
| 2010 | 264 | 8.60 | 26.4 | 15.6 |
| 2011 | 302 | 6.40 | 20.3 | 15.6 |
| 2012 | 371 | 7.97 | 24.3 | 15.6 |
| 2013 | 409 | 9.90 | 32.0 | 18.0 |
| % change | +10 | +24 | +32 | +15 |
Ex-div: 6 Nov Payment: 6 Dec | ||||
