Specialist engineering and professional services staffing firm Gattaca (GATC: LSE) provided a trading update for the six months ended 31 January 2023.

Group net fee income is expected to be £22.7 million (H1 22: £21.6 million), an increase of 5.1% over the year.

Net fee income (NFI) mix split between Contract is 68% and Permanent 32% (compared with H1 2022: 70%:30%).

The group cited double digit growth in core sectors, with Infrastructure, Defence, Energy and Mobility.

However, the group noted that permanent hiring has shown signs of weakness since the turn of the year.

Matthew Wragg, Chief Executive Officer said, "I am happy to see NFI growth across H1 2023 as we focus on improving performance. Progress continues on our four strategic priorities and building the business for the medium to long term. We are now benefitting from our early work around culture and engagement, which has lowered our attrition rate, and is enabling us to increase productivity.”

“As we enter the second half, we are conscious of softening in some external sectors, and perm is likely to be impacted by a level of restraint around hiring, shifting candidate sentiment and, as such, slightly longer hiring cycles. Despite this we continue to see demand for STEM skills in our core sectors and the shortage of candidates plays to our key strength of deep knowledge and understanding of our sectors and niche skills."

The firm also expects to report statutory net cash at 31 January 2023 of £21 million (31 July 2022: net cash of £12 million). This improvement has primarily been driven by strong trade receivables collection performance. 

Gattaca will announce its results for the six months to 31 January 2023 on Thursday 30 March 2023.

Following news of the group’s warning over permanent hiring, Gattaca shares last traded at £82.00, down 9.39% on the day and 12.77% below its 52-week high of £94.00, set on 10 February 2023. The company has a market cap of £29.23 million.