Investors realised at the half-year stage that final results from specialist recruiter Matchtech (MTEC) would be strong. By focusing on higher-margin contract business in the engineering and technology sectors, Matchtech boosted net fee income by 17 per cent to £45m last year. This included a £1.8m contribution from Provanis, the software recruitment business Matchtech bought for £3.6m in 2013.
The group should benefit from rising manufacturing output and higher demand for skilled engineers as the global economy recovers. But the well-documented skills shortage in engineering has made candidates "king", says chief executive Adrian Gunn, which has thrown up challenges. Candidates can receive multiple job offers, prompting counter offers from employers and, ultimately, more job rejections. As a result, fees from permanent placements - of which Matchtech arranged 3,000 last year - are growing slowly, rising just 9 per cent last year to £12.2m. This compared with contract fee income rising more than a fifth to £32.8m.
Analysts at Numis expect pre-tax profits of £13.5m for the current financial year, giving EPS of 39.3p, up from £12.6m and 37p, respectively.
| MATCHTECH (MTEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 572p | MARKET VALUE: | £141m | |
| TOUCH: | 565-578p | 12-MONTH HIGH: | 643p | LOW: 488p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 173p | NET DEBT: | 7% | |
| Year to 31 July | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 264 | 8.6 | 26.4 | 15.6 |
| 2011 | 302 | 6.4 | 20.3 | 15.6 |
| 2012 | 371 | 8.0 | 24.3 | 15.6 |
| 2013 | 409 | 9.9 | 32.0 | 18.0 |
| 2014 | 452 | 11.9 | 37.0 | 20.0 |
| % change | +11 | +20 | +16 | +11 |
Ex-div: 6 Nov Payment: 5 Dec | ||||
