Earlier this month Matchtech Group (MTEC) completed its purchase of telecoms, IT and engineering recruiter Networkers International. That deal saddled the group with £0.7m in acquisition costs in the first half, depressing operating profits by 15 per cent to £5.3m.
But even after stripping out one-off costs Matchtech's performance was fairly flat. Net fee income (NFI) for the recruiter's professional services business fell 3 per cent to £8.5m, or 38 per cent of the group total. Two of the group's three professional services divisions performed less well than in the previous year.
NFI for one of them, Barclay Meade, fell 9 per cent to £2m. Matchtech's new chief executive Brian Wilkinson attributed this to intense market competition and is closing the unit's London office as a result. NFI for the larger technology business grew marginally to £5.8m, but still underperformed Mr Wilkinson's expectations considering the macro-economic recovery.
The group's core engineering staffing business fared better, with NFI rising 5 per cent to £14m. This was primarily due to high demand for skilled engineers in the infrastructure sector, which more than offset weak performances from the maritime, energy and automative teams. Management increased headcount for the engineering division by a quarter and reduced staff in its professional services division by a fifth.
Broker Numis expects EPS of 44.1p this year, up from 37p in 2014.
MATCHTECH GROUP (MTEC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 528p | MARKET VALUE: | £160m | |
| TOUCH: | 520-535p | 12-MONTH HIGH: | 635p | 500p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 143p | NET DEBT: | 4% | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 221 | 5.7 | 18.1 | 5.41 |
| 2015 | 220 | 5.1 | 15.1 | 5.68 |
| % change | -0.3 | -11 | -17 | +5 |
Ex-div: 28 May Payment: 19 Jun | ||||
