Made Tech Share Discussion Threads

[spectoacc] 04/8/2016 09:29

Blimey, that's a big share price target drop - 621p to 460p. Though glad they've pointed out how cheap it still is, on a p/e and yield basis.

[davebowler] 04/8/2016 09:23

Equity Development;
Matchtech is the UK's number 1 specialist engineering (60% group NFI) and number 3 technology (split 23% IT & 17% Telecoms) recruitment agency, providing contract, temporary and permanent staff. 74% of NFI comes from placing contractors (9,000 on assignment), with the remaining 26% from permanents.

Several economists think there will be a recession post BREXIT, albeit we suspect there will be only a temporary dip in GDP, with normal activity levels returning once the initial shock has passed. Regarding Matchtech we would argue that the business is far less cyclical than the broader staffing sector, since most of its infrastructure, automotive, telecoms, IT/software and aerospace customers are enjoying secular growth drivers, with exporters receiving a further boost from Sterling's 10% devaluation.

Even if we are wrong and there is a prolonged decline in output, then this is still likely to affect permanent placements far more than MTEC's approx. 9,000 strong contractor base - many of whom are working on long term government-funded capital projects (eg Crossrail) and/or infrastructure programmes within regulated industries (eg water, rail, etc).

This downside resilience was again demonstrated this morning, following news that adjusted PBTA for the year ending July 2016 would be in line with management expectations, with LFL FY16 NFI up 1% to £72.6m - thanks to a solid second half (+3% vs -1% in H1'16) on the back of continued strong demand for skilled engineers (H1: 7%, H2: 5%) even after the EU Referendum.

Overall this was a very creditable performance, especially given the headwinds experienced elsewhere in the industry. Nonetheless, we have shaved our FY16 adjusted PBTA and diluted EPS numbers (excluding discontinued activities) by 4% to £20.4m (vs £21.3m) and 43.7p (vs 45.6p) respectively. 0ur adjusted FY17 PBTA forecast has been trimmed too - this time by 14% to £19.7m (vs £22.9m) reflecting relatively flat underlying NFI growth of 0.6% to £73.0m vs 1% LFL in FY16. Accordingly, our share price target falls from 621p to 460p per share.

On valuation the stock at 345p appears cheap, trading on forward EV/EBITA and PE multiples of 6.8x and 8.2x respectively vs 8.4x and 12.0x for the peer group average, as well as offering a 6.7% dividend yield (1.8x cover), supported by healthy cash generation, attractive NFI conversion rates and a robust balance sheet.

[brummy_git] 04/8/2016 07:22

New research out today from Equity development

www.equitydevelopment.co.uk/doc/1519.pdf

[spectoacc] 04/8/2016 06:33

In line, albeit hiding a mixed bag, but this caught my eye:

"The proposed change follows extensive research conducted by the Group of its employees, candidates and current and potential clients as to their view of the constituent brands that make up the enlarged Group. This research showed that the Group brand (Matchtech Group plc) and the operating engineering brand (Matchtech) sharing the same name could be a source of confusion. "

And it's not a "source of confusion" that they've nicked the word from a dodgy film, per posts above?

Also:
"Our proposed new name, Gattaca, is a sign of our ambition and I remain confident that we will convert the exciting opportunities available to the Group into growth."

A sign of ambition? Hmmm....

[quepassa] 19/7/2016 14:07

The recent fall from 400p to around 300p is most likely Brexit related as this occurred since 23rd. June.

The slow slump from 600p to 400p over the last 18 months coincides most certainly with the changing of the guard.

Post 291 of April 2015 refers.

Euroland will be a greater challenge going forward for cross-border employment. This will detract.

ALL IMO. DYOR.
QP

[jimmywilson612] 19/7/2016 13:52

Uncertainty may help match tech

Most of the income is from temporary employees. In time of uncertainty companies may employ more temps as they don't have to worry about the longer term situation but a temporary employee can offer the flexibility.

Wishful thinking maybe?

[grahamburn] 19/7/2016 13:26

Tend to agree with your final sentiment, QP, that sure-footed and sound management might be in short supply.

However, the recent decline in the share price has, IMO, much more to do with the uncertainty brought about by the referendum result. Too much uncertainty surrounds the main markets for the company's various brands and sectors. That's likely to prevail - and even worsen - over the next few months (and possibly years?). On the other hand, yesterday's Commons vote on Trident and the hoped-for acceleration in major infrastructure projects have the potential to soften the blow. The latter may even prove positive in the medium term.

[quepassa] 19/7/2016 08:34

1.
Thanks for the Telegraph link. Very interesting.



2.
Adrian Gunn stepped down as CEO ( much to my personal regret) in early 2015.

The share price was about 600p.

The new CEO, Brian Wilkinson took over.

The share price is now about 325p.



And now we see a proposed corporate name change to the same as a 1990's sci-fi movie.


Something, somewhere, somehow just is disconcerting, disenchanting, disconnected.


ALL IMO. DYOR.
QP

[valhamos] 19/7/2016 07:43

More comment on the unfortunate association of recruitment and eugenics here:

'Recruiter Matchtech changes name to Gattaca - same as the hit Hollywood movie about eugenics'



"My overall view is that it is a bit of a blunder" according to a director at brand analyst Brand Finance.

[quepassa] 18/7/2016 17:44

Well I hope they checked with Columbia Motion Pictures and Andrew Niccol - director/writer of Gattaca- that the use of this word is not infringing any copyrights.


ALL IMO. DYOR.
QP

[mrchriss] 18/7/2016 16:26

Subject to shareholder approval.

[grahamburn] 18/7/2016 10:57

As noted above but in general terms, companies which change their names (even dream up some generic unconnected one), tend to spend more time examining their own navals rather than getting on with developing their businesses.

What's even stranger in this case is that the RNS makes abundantly clear that each of the operating companies will be RETAINING their own branding and original identities.

In short, what is the point in an expensive and unnecessary exercise?

[quepassa] 18/7/2016 10:30

Watch the main trailer in the above link.

Spooky or what?

Is this appropriate to a recruitment company?


ALL IMO. DYOR.
QP

[quepassa] 18/7/2016 07:16

Gattaca.

I am not a copyright lawyer but.........




either way, what a really weird choice.

ALL IMO. DYOR.
QP

[valhamos] 18/7/2016 07:05

QuePassa - I agree with your comments. I haven't seen the film but the dubious association given by the name change could be that the company is helping to recruit valids rather than in-valids. Not very clever.

[masurenguy] 18/7/2016 06:44

RNS Number : 3919E
Matchtech Group PLC
18 July 2016

Change of Name: Matchtech Group plc to become Gattaca plc

Matchtech Group plc ("Matchtech" or the "Group" or "the Company" ), the specialist Engineering and Technology (IT & Telecoms) recruitment agency, announces that, subject to shareholder approval, the Company intends to rename as Gattaca plc. The name change is the next step in the Group's development, following the acquisition of Networkers International plc in April 2015. The acquisition brought Telecoms and Technology expertise to Matchtech's existing strength in Engineering and Technology. It has enabled the Group to capitalise on the convergence of the skill sets demanded by these markets and allowed Matchtech to internationalise its existing service offering by leveraging Networkers' existing global infrastructure.

The proposed change follows extensive research conducted by the Group of its employees, candidates and current and potential clients as to their view of the constituent brands that make up the enlarged Group. This research showed that the Group brand (Matchtech Group plc) and the operating engineering brand (Matchtech) sharing the same name could be a source of confusion. For this reason the name of the Group will change to Gattaca and the structure will be simplified. The Company will continue to trade through its core brands Matchtech and Networkers. Matchtech will be retained as the core Engineering specialist brand, with Cappo covering oil & gas recruitment services in international markets. Networkers will be retained as the core Technology specialist brand, with Provanis continuing to operate in the Oracle market sector.

[quepassa] 18/7/2016 06:27

Gattaca - sounds like a disease.

What a dreadful name in my opinion. No-one will remember how to spell it.How many c's? How many t's? Is it with a c or a k?

Gataca, Gatacka, Gattaka, Gattacca. - What a confusing name that phonetically can be spelled so many ways.

In my opinion, this name is worse than the ill-fated one-time rebranding of a certain well-known postal company to Consignia.

In my view, one of those appalling made-up names which are quite meaningless, inappropriate and false, phoney and fake.

Sorry but "nul points" in my view for the choice of that name.

Why on earth would anyone rebrand a company with the same name as some dubious and dystopian 1990's sci-fi movie starring Uma Thurman and Jude law? I hope they have checked copyright on that name.

ALL IMO. DYOR.
QP

[jimmywilson612] 30/6/2016 15:16

Small top-up from em today.

I think its a good price longer term - reading another recruitment agency report (Harvey Nash) they have reported growth in the temp income.

My guess is that companies who are unsure of recruitment on a permanent basis will go via temp instead if they have any fall out from Brexit.

Working in the sector myself I don't see any negative news from clients/candidates YET (time will tell) but overall I think the risk/reward ratio is in my favour.

[proactivest] 14/4/2016 15:03

Video interview with Brian Wilkinson



Brian Wilkinson, chief executive of engineering recruitment specialist Matchtech Group PLC (LON:MTEC), says the company’s integration of Networkers has been “the best integration plan I have ever been involved in”.
He hails the acquisition for the 35% rise in revenue and pre-tax profit, as on an underlying basis, the first half was flat compared to the same period in the previous year.
Wilkinson says the firm is focused on paying off some more of its debt, which has come down “substantially” over the last 12 months, but remains open to bolt-on acquisitions where appropriate.

[thomasthetank1] 14/4/2016 10:01

Read Equity Development’s note on Matchtech Group (MTEC), out this morning, by visiting hxxps://www.research-tree.com/companies/uk/training_%26_recruitment_services/matchtech_group_plc …
“We believe that Matchtech, an engineering and technology recruitment specialist, will soon begin pulling out of its temporary lull. You see, as opposed to its peers, 73% of NFI comes contractor placements, while its long term prospects are far more tied to the strong tailwinds behind the UK infrastructure, automotive, aerospace, maritime, IT and telecoms industries, than the trials and tribulations of the broader economy. In fact, despite reporting today that LFL NFI declined -1% to £35.85m for the 6 months to January 2016, we think that there are numerous reasons why MTEC’s results are set to pick up in H2’16 and beyond. First and foremost…̶1;

[carcosa] 14/4/2016 08:44

New video:
"Brian Wilkinson, chief executive of engineering recruitment specialist Matchtech Group PLC (LON:MTEC), says the company’s integration of Networkers has been “the best integration plan I have ever been involved in”.
He hails the acquisition for the 35% rise in revenue and pre-tax profit, as on an underlying basis, the first half was flat compared to the same period in the previous year.
Wilkinson says the firm is focused on paying off some more of its debt, which has come down “substantially” over the last 12 months, but remains open to bolt-on acquisitions where appropriate."

[brummy_git] 14/4/2016 08:34

New research out from Equity Development

hxxps://www.equitydevelopment.co.uk/doc/1480.pdf

[jimmywilson612] 14/4/2016 07:36

Net debt coming down nicely

[carcosa] 14/4/2016 06:44

At first glance reading not so good; but digging in a little:

NFI 35.9m marginally beating expectation of 35.7m - growth of 62%

Basic EPS 21.9p, say double up for full year to 43.8p versus FY expectation of 45.6p

PBT 9.4m, double to 18.8m versus FY forecast 21.3m

If assuming more cost savings and growth in H2 (very likely) then I would say still in line with forecasts.