A ‘V-shaped’ recovery, together with a shortage of qualified staff, is providing a favourable backdrop for Gattaca, which helps organisations recruit hard-to-find STEM personnel. Additionally after skilfully navigating the pandemic, the group has emerged far fitter (less cost), healthier (stronger balance sheet) and better placed to benefit from these near buoyant conditions.
Today it updated that FY21 PBT would be “significantly ahead of expectations”, thanks to strong Q3 NFI growth (+13%) as more perms/contractors were placed, augmented by tight cost control (whilst still investing in headcount) and less disruption caused by the IR35 tax introduction in April. Meaning that H2 NFI is also anticipated to be 10% higher sequentially vs H1, coupled with the reinstatement of a “modest” dividend (ED est. of 0.5p, equivalent to a 0.3% yield, rising to 1.0% in FY22).
Similarly, our NFI and adjusted PBT forecasts have been upgraded to £44.3m (£43.0m B4) and £2.7m (£750k) respectively - with net cash (excluding £12.2m of off B/S non-recourse finance) closing July ’21 at £18m. Providing plenty of fire power too for the group to increase resource further in sales and service delivery.
Accordingly, we have raised our valuation from 225p to 280p per share.
