Covid lockdowns impact Gattaca in first half

Engineering and technology recruitment specialist Gattaca updated the market on its first half on Wednesday, saying it was expecting net fee income of £21.1m, down from £31.8m year-on-year.

The AIM-traded firm said that primarily reflected the market impact of the Covid-19 pandemic over the six months ended 31 January.

It said it expected to report net cash before IFRS 16 adjustments of £22.9m, compared to £27.3m at the start of the period.

Improving activity levels in the company’s core markets continued through the first quarter, with Gattaca delivering quarter-on-quarter UK net fee income growth of 9% over the fourth quarter.

UK net fee income in the second quarter was 2% higher than the first, partly impacted by the return of tiered Covid-19 restrictions and extended national lockdowns, coupled with the seasonal impact of the lower number of days worked by contractors over the Christmas period.

Given the ongoing effects of the pandemic and the market impact of further national lockdowns, net fee income recovery for the 2021 financial year was likely to be at a slower rate than previously forecast, the board said.

However, as a result of appropriate management of the cost base and the underlying improvements in the business through the acceleration of a group wide improvement plan, the directors said they currently expected full-year underlying profit before tax to be in line with market expectations.

“Whilst we remain cautious as to the timing of the recovery in our core markets, we have been encouraged by the resilience the business has shown over the first half,” said chief executive officer Kevin Freeguard.

“Our strong cash position underpins our resilience and, together with the benefits from our ongoing group wide improvement plan and our core focus on STEM skills which will remain in short supply, positions us well for growth when market conditions inevitably improve.”

Gattaca said it would announce its interim results for the six months ended 31 January on 31 March.

At 1213 GMT, shares in Gattaca were down 4.04% at 95p.