Specialist engineering and professional services recruitment firm Matchtech (MTEC: AIM) reported revenue for the year ending 31 July 2014 of £451.6 million, an increase of +10.4% from £408.9 million last year. The company’s results include niche technology recruitment business Provanis, which was acquired in September 2013 for a total cash consideration of £4 million. 

Net fee income (NFI) for the year rose by +17.2% to £45 million, up from £38.4 million a year ago. Contract NFI rose by +21%, year-on-year, to £32.8 million; while Permanent recruitment fees rose by +9% to £12.2 million.

The company’s NFI business mix in 2014 was 73% Contract and 27% Permanent; against 71% Contract and 29% Permanent in 2013.  

Adrian Gunn, Chief Executive of the Group said: “The Group has continued its track record of delivering year-on-year double-digit growth in Net Fee Income and it is particularly pleasing that contract margins have also increased, driving a +19% increase in adjusted earnings per share.”

“There remains very strong demand in the UK and worldwide for skilled engineers and this demand is increasing as the global economy recovers and manufacturing output rises. The Group is ideally placed to benefit from these trends due to our niche focus within Engineering and Technology, market leading position and balanced business model of contract and permanent recruitment.”

“We therefore continue to invest to accelerate the on-going medium term success of the business particularly focusing on increasing our consultant headcount within Engineering in the first half of FY2015,” Mr Gunn concluded.

Matchtech’s Engineering sector reported revenue growth of +6.2% to £311.6 million, up from £293.5 million last year. The sector delivered NFI growth of +13% to £27.1 million, with Contract NFI growing by +15% and Permanent fees slightly ahead of last year.

Within the Engineering sector, Infrastructure reported NFI growth of +36%, while Aerospace NFI increased by +17%, and Automotive NFI by +5%. NFI derived from the Energy division remained relatively unchanged, year-on-year, while Maritime NFI declined by -7% impacted by the planned completion of the aircraft carrier build phase at Portsmouth Naval Base.

The company’s Professional Services sector delivered revenue of £140 million, up by +21.3% from £115.4 million in 2013. The sector delivered NFI growth of +24% to £17.9 million, and now generates 40% of Group NFI.

With Provanis generating almost all its business from contractors, there has been a shift in  business mix within Professional Services with Contract now generating 57% of NFI (2013: 53%) and Permanent fees accounting for 43% of NFI (2013: 47%).

Within the Professional Services sector, Technology, which is the sector’s largest division, reported NFI growth of +27%. Professional Staffing NFI increased by +19% with strong growth in permanent fees.

Broken down geographically, revenue from the UK rose by +10.6% to £448.8 million, up from £405.6 million last year. Gross profit for the region was £44.3 million, up by +18% from £37.6 million in 2013.     

The company’s German operations reported revenue of £2.8 million, down by -14.5% from £3.3 million a year ago. Gross profit also decreased, year-on-year, by -16.9% to £675,000, down from £812,000 in 2013. Matchtech Germany reported a loss before tax of £373,000 in 2014, a worsening from a loss before tax of £160,000 last year. 

Looking forward, Mr Gunn added: “The new financial year has started well, building on our solid foundations and I am confident that the Group will continue to make significant progress again this year.”

In trading today, the company’s share price rose by +0.3% to £5.71, an increase of +18.6% from a year ago. Based on its current share price, the company has a market value of £141.1 million.