Gattaca PLC on Thursday noted the impact of harsh trading circumstances on its recent performance, but said that its focus on business development was ‘starting to bear fruit’.

Gattaca is a Whitely, England-based recruiter for companies in the technology and engineering sectors. Shares in the company were down 14% at 107.50 pence each in London at midday on Thursday.

Gattaca said that trading had been ‘robust’ in the six months ended January 31, though the company noted that it was ‘not immune’ to challenging market conditions.

Gattaca’s net fee income is estimated at £18.9 million in the first half, down 16% from £22.5 million for the same period a year prior.

The half-year demonstrated a a higher ratio of contract to permanent income, at 76% to 24%, respectively. This compares to a 68% to 32% split in the first half of financial 2023. Gattaca said that this reflects its increasing focus on contract marketing and maintaining contract volumes.

Permanent net fee income was down 38% from the previous year, which Gattaca chalked up to ‘market weakness’, as well as the exit of a large permanent recruitment process outsourcing client at the end of financial 2023.

‘Significant progress’ was made in business development, Gattaca said, with two large client extensions and two managed service providers signed in the period.

Defence continues to be Gattaca’s strongest sector, with 9% growth from last year excluding the impact of the RPO client exit. For the year ended July 31, Gattaca’s defence business brought in £80.7 million in revenue.

Gattaca estimates its statutory net cash to be £22.1 million as at January 31, up from £21.6 million at July 31.

Chief Executive Officer Matthew Wragg said: ‘Despite the tough market conditions, I am pleased to report the group is trading in line with current market expectations. I am also pleased to see our strategy to invest in business development is starting to bear fruit, with two large client extensions and two more managed service provider wins for the group in the first half and a growing pipeline.

‘Recognising that trading conditions are expected to remain challenging, we plan to keep tight control on operating costs including headcount during the second half, whilst we are mindful to ensure we are well placed to build market share in our chosen sectors as the economy recovers.’

Gattaca will release its results for the six months ended January 31 on April 16.

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