15 February 2024
Gattaca plc
("Gattaca" or the "Group")
Trading Update
Robust performance in line with market expectations
Gattaca plc, the specialist staffing solutions business, today provides the following trading update for the six months ended 31 January 2024 ("H1 24").
| · | Group Net Fee Income1 ("NFI") expected to be £18.9m (H1 232 £22.5m), a decrease of 16% year-on-year ("YoY") |
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| · | NFI shows anticipated shift towards Contract 76% / Permanent 24% (H1 232: 68% / 32%), reflecting increased focus on contract market and maintaining contractor volumes which ended the period flat with the prior year |
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| · | Permanent NFI down 38% YoY as a result of market weakness, with placements continuing to show weakness since the turn of the year, and the exit of a large permanent Recruitment Process Outsourcing ("RPO") client in prior year as referenced at year end |
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| · | Significant progress in business development, with two large client extensions and two more Managed Service Provider wins |
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| · | Defence continues to be the Group's strongest performing sector with 9% YoY growth excluding the RPO account exit as above |
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| · | Marginal reduction in sales headcount during H1 24 to 312 from 315 at the year-end, focused UK headcount investment in specific sectors showing growth opportunities, these being Energy, Defence and Gattaca Projects |
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| · | The Group expects to report statutory net cash at 31 January 2024 of £22.1m (31 July 2023: net cash of £21.6m) |
Notice of Interim Results
The Group will announce its results for the six months to 31 January 2024 on Tuesday 16 April 2024.
Matthew Wragg, Chief Executive Officer said:
"Despite the tough market conditions, I am pleased to report the Group is trading in line with current market expectations. I am also pleased to see our strategy to invest in business development is starting to bear fruit, with two large client extensions and two more Managed Service Provider (MSP) wins for the Group in H1 and a growing pipeline. We continue to see high engagement, staff attrition below long-term targets and productivity levels beginning to improve. In H1 we have continued to focus the business more on specific markets and geographies. We have reduced our workforce in North America.
However, the economic conditions have led to a challenging market in H1 and we have not been immune to this. Permanant fee income is down 38% due to much lower than anticipated volumes at the back end of 2023 and compounded by reduced NFI from the exiting of a major programme last year. We anticipate that Permanant fees will pick up gradually as we go through 2024. Contract income has remained stable, and we are starting to see growth from our investment and focus into this area.
Recognising that trading conditions are expected to remain challenging, we plan to keep tight control on operating costs including headcount during H2, whilst we are mindful to ensure we are well placed to build market share in our chosen sectors as the economy recovers.
I would like to add my personal thanks to everyone in and from the business, our special community, customers and partners for their support in what has been an extremely tough week for the Group following the sudden passing of our very good friend and Chief Sales Officer Grahame Carter. The way everyone has united is testament to the strength we have as a team. Our love and condolences go to his family, friends and everyone who had the pleasure to know him."
1. NFI is calculated as revenue less contractor payroll costs
2. H1 23 results have been restated for the correction of a FY22 revenue cut-off error, and the FY23 reassessment of the Group's accounting policy over how accrued revenue and accrued cost balances have been calculated at the period end. The aggregated impact of these items on H1 23 reported NFI is £0.2m reduction. Further details on this error and policy change were provided in the Group's FY23 Annual Report & Accounts.
For further information please contact:
| Gattaca plc | +44 (0) 1489 898989 |
| Matthew Wragg, Chief Executive Officer Oliver Whittaker, Chief Financial Officer | |
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| Liberum Capital Limited (Nomad and Broker) | +44 (0) 20 3100 2000 |
| Lauren Kettle Richard Lindley | |
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| IFC Advisory (Financial PR and IR) | +44 (0) 203 934 6630 |
| Tim Metcalfe Graham Herring Florence Chandler | |
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