Gattaca faces fall in UK activity due to uncertainty

Gattaca, an AIM listed specialist engineering and technology recruitment agency, reported a positive year for the group but faced a slowdown in trading in the UK.

Group net fee income (NFI) in the UK is forecast to fall by 3% in the first quarter of 2017.

The group reported a 23% rise in revenue to £617.6m for the year ended 31 July 2016. Net fee income rose 33% to £73m.

Profits were in line with expectations with profit before tax rising 34% to £15.1m.

Performance was “strong” in engineering with net fee income (NFI) growth of 6% while technology NFI was down by 6%. Growth was “good” in Telecom at 9% but was offset by underperformance in IT at a 17% decline.

The company’s integration of synergies is near completion, with £3.1m synergies identified. It expects to realise them by the full year 2017 with “concrete” sales synergies already realised.

The newly created engineering technology division, which combined existing networkers and Matchtech skill sets and targets the “Internet of Things”, is already one of the company's fastest growing businesses.

Net debt at the end of the period fell to £25m from £33.6m in the previous period.

The board is continuing to invest in overseas operations to mitigate the uncertainty around the UK economy in the medium term. A total of £1.8m of synergies are being reinvested to strengthen the international headcount to support and drive forward growth outside the UK.

Chief executive Brian Wilkinson said: "Looking forward, uncertainty about the future of the British economy raises concerns for companies like ours, operating in what is seen as a highly cyclical sector. Nevertheless, our well established approach of partnering with our clients on long-term public and private infrastructure projects mitigates this risk to some extent, as does our increasing geographic diversification.”

Basic earnings per share rose 4% to 32.1p. Final dividend rose 4% to 17p.

The share price fell 10.10% to 307p at 1033 GMT on Thursday.