UK-based specialist engineering and technology recruiter Gattaca PLC announced today that it intends to withdraw from a number of international markets in order to focus on more profitable territories.

Gattaca said it will withdraw from the contract telecommunications infrastructure markets in Africa, Asia and Latin America. It will also close operations in Dubai, Kuala Lumpur and Qatar. The company added that as part of this process, it is also consolidating its London and Bromley offices to a single location at its London Cotton Centre premises. The group also announced that it is opening a new hub in the US.

“Gattaca remains fully committed to growing our international footprint in those areas and territories which offer the opportunity to achieve significant, sustainable and scalable profits,” the group stated. “The Americas, where we have been experiencing excellent growth, is a clear example of this. We are pleased therefore to announce today the opening of a new hub in the USA, based in Atlanta, Georgia; this will operate alongside our existing hub in Dallas, Texas. In China we aim to replicate the success of our America model as we see a shift towards Engineering & IT permanent recruitment and a reduction in the legacy Telco market.”

“We also remain fully committed to technology and will continue to invest in our Networkers brand, including in the subsectors within Telecoms which meet our strategic criteria,” the group stated.

The closures will release £7 million in working capital before exit costs, and reduce net debt, Gattaca said. One-off restructuring costs are expected at around £3 million.

“The business impacted represents approximately £7 million of FY18 NFI, the significant majority of our non-recoverable Withholding Tax and made a small contribution to our FY18 underlying profit after tax,” the group stated. “This business has been in decline and we had not forecast it delivering a significant contribution towards our FY19 underlying profit after tax. As a result our forward expectations remaining broadly unchanged.”

Patrick Shanley, Chairman, commented, "The steps we are announcing today will place Gattaca on a firm footing for future growth. The withdrawal from these territories and Telco Infrastructure operations remove some very low margin business, which was tying up significant working capital and diluting the strength of our core operations.”

“Following this review, Gattaca can now focus on our strong core and growing businesses, in particular within UK Engineering, UK IT, and North America as well China and our recently acquired RSL Rail business,” Shanley said.

In the latest trading update for the 12 months ended 31 July 2018, Gattaca reported a 1% increase in Net Fee Income with growth driven by permanent recruitment.