Gattaca confident after strong second half

Engineering and technology recruitment firm Gattaca said on Wednesday that it was expecting group continuing net fee income to have risen 4% year-on-year to £44m for the financial year just ended.

The AIM-traded company said the net fee income mix for the 12 months ended 31 July was split between contract at 69% and permanent at 31%, compared to a respective 75% to 25% split in the 2021 period.

Contract net fee income was down 3% year-on-year due to three client losses in the first half, while it saw “strong demand” for permanent recruitment within the UK, up 33%, driven by particularly strong demand in the mobility market and professional skills.

Gattaca said it was continuing to invest in increasing its sales headcount, which was up 7% on the prior year, adding that its continuing underlying profit before tax for the full year was expected to be in line with the market consensus of breakeven.

The group said it improved its financial position from the half-year position of £0m, with statutory net cash as at 31 July standing at £12m, though that was down from £14m a year earlier.

During the financial year, Gattaca repaid deferred VAT of £5.6m, which was the key driver of the decrease in cash year-on-year.

“We are pleased with the performance of the group through the second half of the year and importantly the speed in which the business is embracing our four strategic pillars - increased external focus, improved culture, operational performance, and cost rebalancing,” said chief executive officer Matthew Wragg.

“We have established a solid foundation from which we can grow, leaving us well placed as we enter our new financial year, which has started well.

“We are mindful of the current macroeconomic conditions as we continue to see robust demand in our key markets.”

Wragg said there was still a shortage of candidates, playing to Gattaca’s strength of “deep knowledge and understanding” of its sectors and niche STEM skills.

“We remain confident that the long-term fundamentals in our core STEM markets provide an exciting future for the business as it returns to growth.”

Gattaca said it would announce its full-year results for the 12 months ended 31 July on 3 November.

At 1255 BST, shares in Gattaca were up 7.5% at 77.94p.

Reporting by Josh White at Sharecast.com.