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UK – Matchtech revenue rises following strong contractor demand

04 October 2012

Matchtech Group (MTEC:LSE) has seen “unprecedented”  demand for contractors across the engineering sector as revenue in the year to July 2012 rose by +23% to £371.4 million, the firm said on Thursday. Revenue derived from its German business grew by a strong +73% to £3.0 million.

“Since our pre-close trading update on 2 August trading has remained in line with the board's expectations, with contractor numbers continuing to grow well, up 2% in the two months to 30 September 2012,” said Chairman George Materna.

Gross profit in the 12 months to July rose by +21% to £36.1 million with the firm seeing a record number of contractors on assignment. Permanent recruitment fees were up +22% to £11.5 million, making up a third of total gross profit. But the gross margin in the period dropped to 9.7% from 9.9% a year ago.

Profit from operations increased by +28% to 8.7 million, mainly driven by growth seen in niche markets, strong client retention, and improved performance by the professional services brands created in the last two years.

The company places staff in four key sectors – engineering, science & medical, built environment, and information systems & technology. The firm announced that in its 2012/2013 financial year, it will be managed in two segments, engineering and professional services.

During the year, the firm also acquired business assets of Xchanging Resourcing Services Limited, the contingency recruitment arm of Xchanging, for a total cash consideration of £400,000. As part of the deal, Matchtech secured a two-year contract to January 2014 to supply contractors to Xchanging's business in the UK.

Matchtech is a technical staffing business and the 12th largest provider in the UK, according to Staffing Industry Analysts’ research.

After publishing its financial report this morning, the company saw a +5.3% rise in its share price to 217.00 pence, down -0.2% from a year ago and -3.3% below its 52-week high of 224.28 pence seen in November 2011. The firm has a market value of £48.18 million. 

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