Gattaca, formerly listed as Matchtech Group, has over 30 years' experience providing niche recruitment services to the engineering, technology, professional staffing and the employability & skills markets. The Group is recognised as the UK's leading specialist recruitment agency providing contract, professional contract and permanent staff.
UK employers are scrambling to backfill 1.1m positions displaced by the pandemic, amidst a tightening resource pool. Exacerbated by low unemployment, rising salaries, greater staff churn & many people simply opting for a career change. Indeed there are now on average just 1.5 unemployed people per job vacancy.
These acute labour shortages are not only prevalent in healthcare, leisure (eg waiters) & transport (HGV drivers). But also software, digitisation, renewables (eg off-shore wind & hydrogen), electrification, defence (cyber & marine), engineering and infrastructure. All are core competencies of STEM recruiter Gattaca, who today posted ‘in line’ FY21 results.
Despite headline FY’21 PBT falling -41% to £3.2m on NFI down -20% to £42.1m, adjusted H2’21 NFI climbed 5% sequentially to £21.6m vs H1, due to favourable permanent placement, technology, solutions (29% NFI) & RPO activity. Boosting H2 PBT to £2.8m (vs £0.4m H1) on the back of tight cost control, improving conditions, economies of scale and an estimated £3.3m of annualised savings (net) derived from the ‘Improvement Plan’.
Gattaca generated approx. £1.5m of incremental cash and repaid its RCF in full (£15m in Oct’20). Meaning the group is now entirely covenant free, sporting ample liquidity to pay a 1.5p dividend (£484k) from net funds (pre IFRS16) of £19.9m - excluding £5.6m of deferred VAT (to be settled by Feb’22) and £14.2m of non-recourse finance.
At 210p, GATC trades on undemanding FY22 multiples of 10.4x EV/EBIT and 14.5x PER vs 11.4x & 16.8x for peers; yet we err on the side of caution for now and retain our Fair Value at 285p/share.