Gattaca PLC Trading Update (8021I)

TIDMGATC

RNS Number : 8021I

Gattaca PLC

17 August 2021

17 August 2021

Gattaca plc

("Gattaca", "the Group" or "the Company")

Trading Update for 12 months ended 31 July 2021

Performance ahead of expectations

Gattaca plc (LSE-AIM: GATC), the UK's leading specialist Engineering and Technology staffing business, today provides the following trading update for the 12 months ended 31 July 2021.

Following our trading update announcement on 21 May 2021, we expect continuing underlying PBT(1) and adjusted net cash (excluding IFRS16 lease liabilities) to be above market expectations for FY 2021.

H2 2021 continuing Net Fee Income ("NFI") was 7% higher than H1 2021, with the full year NFI at GBP42.5m (FY 2020: GBP52.8m), reflecting the market impact of the COVID-19 pandemic over the entire reporting period.

We continue to add sales and delivery resource across the business, increasing front line headcount by 13% since January whilst tightly managing the overall cost base.

Consequently, subject to final adjustments and audit, we expect our continuing underlying PBT for the full year to be in excess of GBP3m (market consensus GBP2.7m).

Adjusted Net Cash (excluding IFRS16 lease liabilities) is expected to be GBP20m(2) (31 July 2020: GBP27m) largely driven by repayment of deferred VAT (GBP4.7m)

All of our businesses successfully transferred to our global technology platform in Q4 enabling the business to have a consistent view of activity and performance across all of our operating units.

We have seen increased activity from our "RPO" (Permanent Recruitment Process Outsourcing solutions) clients as the market recovery has been led by permanent recruitment both in contingent and solutions products. There is further improvement to come on the contract front including in our core infrastructure unit, which will benefit from strong demand driven by major initiatives such as UK Fibre investment, HS2 and Offshore 2025, which we are seeing already positively impacting hiring. Our defence business continues to perform strongly. We also anticipate continuing high demand for technology skills as the pace of digitisation continues to accelerate.

We have determined that our sales operations in Mexico and South Africa are sub-scale and we exited both at the end of July and these businesses will be treated as discontinued in our FY 2021 results.

In light of the improved performance and assuming a continuation of the current positive trends, the Board anticipates the recommendation of a modest dividend when the full year results are announced.

The Group expects to announce its full year results for the 12 months to 31 July 2021 on Thursday 4 November 2021.

Kevin Freeguard, Chief Executive Officer said:

"Following our upgrade in May, I am pleased that our profit results will again be ahead of expectations. Whilst the pandemic continues to impact activity across our markets, it is clear that we have now entered the next phase of recovery. Our new global technology platform will increase our ability to collaborate and drive performance across the business. At the same time, our continued investment in sales and delivery resources will enable us to capitalise on the continuing opportunities as our markets, including Infrastructure and Defence, emerge from the pandemic."

(1) Continuing underlying results exclude the NFI and (losses) / profits before taxation of discontinued operations. The combined NFI of Mexico and South Africa in the year was GBP1.0m and losses before tax were GBP(0.2)m (2020: NFI GBP1.5m and profit before tax GBP0.2m

(2) VAT deferrals at 31 July 2021 were GBP5.6m (31 July 2020: GBP10.3m)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

For further information please contact:

 
Gattaca plc                                 [phone] 
Kevin Freeguard, Chief Executive Officer 
  Salar Farzad, Chief Financial Officer 
Liberum Capital Limited (Nomad and 
 Broker)                                   [phone] 
Lauren Kettle 
 Robert Morton 
 Euan Brown 
 
Citigate Dewe Rogerson                     [phone] 
Jos Bieneman 
 Elizabeth Kittle 
 

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August 17, 2021 02:00 ET (06:00 GMT)