Specialist engineering and professional services staffing firm Gattaca (GATC:LSE) reported revenue yesterday of £385.2 million for the year ended 31 July 2023, down 4.6% compared to the same period a year ago.

The group’s audited financial results for the year also showed net fee income of £43.4 million, down 1.8%.

Continuing operations

Matthew Wragg, Chief Executive Officer of Gattaca, said, "I am pleased with the performance in the year, against a difficult market backdrop. A significant growth in underlying profitability reflects the group's focus on productivity improvements and cost management, whilst a positive shift in culture is strengthening the business as whole. Whilst our sales progress has been impacted by the decline in the wider market, I am pleased that we were able to continue to simplify the business this year along with managing our cost base and continue to trade in line with expectations for FY24."

The company said its underlying profit before tax was a result of executing its planned strategic initiatives for FY23. It reflected ongoing focus on productivity improvements, exiting lower margin contracts and active cost management.

Contract net fee income was up 2% over the year, reflecting strategic priority to become more focused on contract business alongside a shift in opportunities from employers

Permanent net fee income was down 11% over the year, following a tightening of the wider economy.

Yesterday, Gattaca announced that its founder and largest shareholder George Materna has decided to retire from the board and will step down at the Annual General Meeting. The company also announced further board changes.

In the UK, net fee income was flat over the year. Defence and Infrastructure sectors, representing 51% of group net fee income, delivered 8.8% NFI growth over the year. Gattaca Projects Statement of Work business achieved 59% annual net fee income growth.

Wragg continued, "The sectors in which we operate and the STEM skillsets that we provide have the right long-term fundamentals for success and we enter FY24 as a more efficient and productive business. We are well positioned to take advantage of the expected recovery in the market and will look to grow our sales headcount where we see the best opportunities for contract expansion, whilst we continue to focus on our strategic priorities enabling us to further strengthen our platform for growth."

Looking ahead, Gattaca stated, “We continue to remain mindful of the macro-economic headwinds, which have impacted demand and candidate sentiment across the recruitment sector and slowed our speed of recovery. We are seeing permanent recruitment remaining subdued and are increasing our focus on contractor growth, which takes longer to reflect in NFI, as such we expect profitability will be weighted to second half of the year.”

Gattaca shares closed yesterday at £105.00, up 6.60% on the day and 16% below its 52-week high of £125.00, set on 26 April 2023. The company has a market cap of £31.05 million.