Although it may not feel like it for the 1.7m people who are unemployed - but despite the lockdowns, UK employment prospects are steadily improving thanks to the country’s successful vaccine rollout. The only slight frustration is that this optimism hasn’t yet translated into a surge in recruitment activity, albeit we suspect a rehiring boom is only a matter of time, especially for STEM recruitment specialist Gattaca.
Today the company said that Q2’21 NFI had climbed 2% sequentially vs Q1, which itself was 9% higher than Q4’20, and reporting H1’21 NFI of £21.1m (-34% vs £31.8m LY). Adjusted PBT was consistent with FY21 expectations (ED £750k) after benefitting from tight cost discipline & the faster realisation of ‘Improvement Plan’ savings. Net cash (pre IFRS15 & 17) closed Jan’21 at a healthy £22.9m, excluding deferred VAT and non-recourse debt.
Looking ahead, our FY21 & FY22 adjusted PBT forecasts have been left unchanged, with FYI NFI anticipated to climb +28% vs -20.8% in FY21 – although the exact timing of this inflexion point remains uncertain.
Despite recent share gains the stock at 100p still trades on modest FY22 multiples of 5.2x EV/EBIT and 7.6x PER, well below 12.1x & 20.2x for the peer group average. We retain our 140p/share valuation, and would expect an upwards re-rating as favourable operating leverage kicks in.
