Investors dumped shares in recruiter Gattaca (GATC) a week before the release of its half-year results, after management warned full-year profit would be 10 per cent to 15 per cent below prior expectations. But the reaction to the release of half-year numbers has been positive, so perhaps the situation isn't as bad as all that.
But it isn't great. Underlying net fee income for the UK-focused engineering and technology recruiter was down 4 per cent in constant currency. Last year's vote to leave the European Union led to "elongated hiring decisions and some projects being delayed". Currently, the UK delivers 90 per cent of the company's top line. Still, domestic headcount remained flat, and the company focused on managing other costs domestically while investing in international growth.
Headcount is up by 26 in the international business, as the company looks to expand. Management is optimistic about the prospects outside of these shores, and has recently moved its Dallas workforce to an office that accommodates 80 people, from 25 previously.
Analysts at Numis are forecasting adjusted profit before tax of £16.5m for the year to July 2017, giving adjusted EPS of 34.4p (from £20.4m and 44.4p in FY2016).
| GATTACA (GATC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 283p | MARKET VALUE: | £88.3m | |
| TOUCH: | 281-283p | 12-MONTH HIGH: | 465p | LOW: 240p |
| DIVIDEND YIELD: | 8.1% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 258p* | NET DEBT: | 35% | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 298 | 6.93 | 15.4 | 6.0 |
| 2017 | 304 | 5.17 | 10.7 | 6.0 |
| % change | +2 | -25 | -31 | - |
Ex-div: 25 May Payment: 16 Jun *Includes intangible assets of £47.1m, or 151p a share | ||||
