FY’22 NFI set to climb 7% as investment kicks in
Due to the latest Omicron outbreak, the pace of economic recovery has temporarily hit a soft patch. But growth should pick-up soon, particularly as Omicron burns itself out, whilst unemployment further declines amidst record numbers of vacancies and acute job shortages.Given the uncertainty, Gattaca said today that it was seeing a “delayed recovery in its contract business (c. 75% NFI) where demand has been slower than expected.” Albeit, greater resource has already been invested in UK sales headcount (+24% vs Jan’21) in anticipation of a rebound.
So, despite a 46% jump in Permanent placements (re RPO activity), overall group NFI is now predicted to climb +7.2% to £22m in H1 (£20.5m LY), +6.7% for H2 (£23m vs £21.6m) and +6.9% in FY22 (£45m vs £42.1m LY & ED est £50.5m before), and adjusted PBT falling to “breakeven.”
Longer term fundamentals look positive, especially in Gattaca’s sweetspots of software, digitisation, renewables (eg off-shore wind & hydrogen), electrification, defence (cyber & marine), engineering and infrastructure (eg HS2, fibre-to-the-home, Lower Thames Crossing, etc).
We reduce our forecasts for this year & next with our valuation falling from 285p to 165p/share.
Gattaca is an engineering and technology recruitment solutions company. Co. operates in the STEM markets (science, technology, engineering and maths), all sectors with skills shortages. Co. has three reporting segments, Engineering, Technology and International. Co.'s brands are Matchtech, an engineering recruitment specialist; Networkers, a technology recruitment specialist; Cappo, Provanis, Barclay Meade, a professional services brand, recruiting finance, procurement, sales and HR professionals., and Alderwood, which is involved in placing trainers and assessors with training providers throughout the U.K. and the Middle East.
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