Gattaca PLC – Interim Results

Gattaca PLC – Interim Results

Gattaca plc, the specialist Engineering and Technology recruitment solutions business, today announces its Interim Results for the six months ended 31 January 2019.

Financial Highlights

2019 H1 2018 H1 Change
Continuing reported2 Continuing underlying3 Continuing reported2 Continuing underlying3 Continuing reported2 Continuing underlying3
£m £m £m £m % %
Revenue 322.3 322.3 305.3 305.3 +6% +6%
Net Fee Income (NFI)1 36.5 36.5 36.0 36.0 +2% +2%
EBITDA 7.6 8.4 6.9 7.4 +11% +14%
 
Profit/(Loss) before tax 5.4 6.8 (13.6) 6.1 NA +12%
Profit/(Loss) after tax 4.0 5.2 (13.2) 4.8 NA +8%
Discontinued Operations (3.1) 0.0
Reported Profit/(Loss) after Tax 0.9 (13.2)
Basic earnings per share 12.5 16.0 (42.2) 14.3 +12%
Diluted earnings per share 12.4 15.8 (41.5) 14.0 +13%
Interim dividend 0p 3.0p NA
Net debt at end of period4 £(27.8)m £(36.2)m £8.4m

The following footnotes apply, unless where otherwise indicated, throughout these Interim Results:

1   NFI is calculated as revenue less contractor payroll costs

2 Continuing results exclude the NFI and trading (losses) / profits before taxation of discontinued businesses (2019: £(2.6)m, 2018 £0.9m)comprising Contract Telecoms Infrastructure markets in Africa, Asia and Latin America (some of which was UK sourced) plus our operations in Dubai, Kuala Lumpur and Qatar.

3 Continuing underlying results exclude the NFI and trading (losses) / profits before taxation of discontinued businesses (2019: £(2.6)m, 2018 £0.9m), non-underlying items within continuing administrative expenses primarily related to restructuring and finance integration (2019: £0.8m, 2018 £0.5m), amortisation of acquired intangibles (2019: £0.6m, 2018 £1.6m), impairment of goodwill and acquired intangibles (2019: £0.0m, 2018 £17.1m) and exchange gains from revaluation of foreign assets and liabilities (2019: £0.0m, 2018 £(0.4)m loss).

4 Included within Net Debt are Capitalised Financing costs (2019: £0.2m, 2018: £0.3m)

Highlights

  • Group continuing NFI grew 2%
  • Continued underlying NFI to EBIT conversion at 22%, compared to 19% in prior period
  • UK Engineering NFI up 4% on prior year
    –  Maritime +25%; Engineering Technology +11% and Infrastructure +7%
    – Growth in both contract and permanent
  • UK Technology NFI down 13% on prior year, but restructuring and focus on profitability delivered a higher contribution than prior period
    – IT NFI down 8%,
    – Telecoms NFI down 38%
  • International NFI up 15% on prior year
    – Continued growth in the Americas (+6%)
    – Strong year on year growth in our restructured offices China and South Africa both showing double digit increases
  • Underlying continuing EPS up +12% at 16.0p (2018 H1 14.3p) and underlying Profit After Tax up 8%
  • Strong cash flow performance, resulting in net debt reducing to £27.8m (2018 year end £40.9m; 2018 H1 £36.2m)
  • Improvement plan launched

Dividend

Interim dividend of nil pence (2018: 3.0 pence), in line with the revised dividend policy communicated in 2018. The Board will consider dividends at the year end, if resumed this would be at modest levels.

Outlook

The Board notes that economic uncertainty, which can impact our industry, has increased over the last six months. Notwithstanding this, trading so far in the third quarter is as expected and we remain confident in our outlook for the full year; we expect results to be in line with the Board’s expectations at this time.

Commenting on the results, Kevin Freeguard, Chief Executive Officer said:

“The first half of FY19 has been a period of progress for the Group and we are pleased to be reporting NFI and PBT growth in our continuing operations. Our core UK Engineering business delivered continued growth and the restructuring work we undertook in our UK Technology operations in Q1 has begun to feed through into an improved year-on-year operating contribution. Our restructured and refocused International operations continued to grow strongly and we are pleased with our progress in reducing net debt. 

“Building on the fundamental strengths of the business, our improvement plan is now underway and is focussing on the levers for growth, refining sales and market effectiveness, aligning operations to further enhance our delivery capability and innovating to extend our range of market solutions. I am confident that as we continue to execute the plan it will position the company well for the future.”

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