Specialist engineering and professional services staffing firm Gattaca published a trading update for the six months to 31 January 2018, announcing that Underlying Net Fee Income was up 2% over the year.

Net Fee Income was broken down as follows.

The group stated that UK Engineering performed positively, returning to growth in H1, although this was tempered by continued challenges seen in UK Technology, particularly in telecoms.

Gattaca’s International business growth was driven by continued strong performance in the Americas where NFI has grown 31% year-on-year.

Gattaca has also seen a shift toward permanent in their NFI breakdown, with permanent representing 28% of H1 NFI compared to 24% last year.

Contract and Permanent Net Fee Income was broken down as follows: 

The company also announced that it expects adjusted pretax profit for fiscal 2018 will be 15% below the board's expectations, citing higher costs after increasing its staff headcount.

“Taking a more prudent assessment of the economic outlook, we have tempered our expectations for growth in H2 and consequently we are undertaking a review of our cost base, so as to identify savings, some of which will be achieved in H2,” Gattaca announced in a statement. “Notwithstanding these savings, profits before tax excluding non-recurring costs are now expected to be in the order of 15% below the Board's previous expectations.

The company today also announced that Brian Wilkinson has tendered his resignation as CEO as he wishes to retire from full time executive roles. He will step down from the Board with immediate effect. Wilkinson joined Gattaca in 2013.  The group added that in line with his contractual obligations, Wilkinson will be available to the company during his notice period.

Furthermore, the Board announced that it has begun the process to recruit Wilkinson’s successor and will look both externally and internally.

Last month, Gattaca stated that it does have outstanding debts owed by its former client Carillion, but the majority of them are insured. The company stated that the liquidation of Carillion is expected to cause "minimal" damage to its balance sheet.

Due to the revised full-year expectations, Gattaca said it has also reset the rate of its dividend cover at 2x from 1x last year in order to pay its debt.

"The Board is also taking the pre-emptive step of addressing the dividend which has become burdensome and which prudence dictates should be brought into alignment with the financial position and future prospects of the business,” Chairman Patrick Shanley said. "Notwithstanding, we are clear that we have a robust core business with a good strategy. Together with a strong and deep management team and excellent staff we are well positioned to reset the business for profitable growth."

Salar Farzad, Chief Financial Officer of Gattaca also commented, "We will be identifying significant savings in our cost base, some of which will be realised in H2. We will update the market on progress when we announce our interims in April."

The Group will announce its interim results for the six months to 31 January 2018 on 19 April 2018.

Following Gattaca’s profit warning, the company hit a new 52-week low during today's trading session when it reached £195.00, down 31.51% during the period. Gattaca shares last traded at £200.00, down 6.10% on the day. Based on its current share price the company has a market value of £67.74 million.