17th Jul 2020 15:22
(Alliance News) - Gattaca PLC on Friday said it expects its income for financial 2020 to be significantly lower year-on-year due to the UK-wide lockdown but noted that trading has been stronger than its initial expectations following the imposition of the restrictions.
Shares in the technology & engineering recruiter were trading 13% higher at 49.20 pence each on Friday afternoon in London.
Gattaca said trading in April, May and June was 41% below the year prior, reflecting the negative impact of the UK government's Covid-19 lockdown measures. Overall continuing operations net fee income for its financial year ending July 31 is expected to be around GBP54 million, down 22% year-on-year from GBP69 million with the majority of the shortfall in UK NFI.
Previous forecasts from before the start of the UK lockdown guided for NFI of GBP64 million.
Gattaca highlighted that its international operations performed better than expected due to the implementation of cost reduction measures, but noted that its China business is now operationally closed. Cost reduction measures are expected to result in annualised cost savings of over GBP3 million starting around the end of the first half of 2021.
"The Covid-19 pandemic has created unprecedented challenges for Gattaca and for UK industry in general. However, I am pleased with the way the business has responded and the resilience we have shown. During the period, we have taken a number of measures to strengthen the business, including the acceleration of the group-wide improvement plan, and the outstanding response from our staff to the challenges arising from Covid-19 has enabled Gattaca to perform ahead of our expectations in these difficult circumstances, said Chief Executive Kevin Freeguard.
"The balance sheet has continued to improve beyond our normal cycles, increasing our financial stability, and the significant liquidity will allow us to aggressively pursue growth opportunities to take advantage of the inevitable recovery in our markets," he added.
As at the end of June, the Fareham-based company had available liquidity of GBP59 million.
Full unaudited results for financial 2020 will be published on November 4.
By Ife Taiwo; [email protected]
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