2010 interim results april 2010 25 years delivering recruitment solutions n.
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2010 Interim Results April 2010 25 years delivering recruitment solutions. Adrian Gunn - Chief Executive Officer Tony Dyer - Chief Financial Officer. Headlines Trading in line with expectations. Revenue down 5% on 2009 H2 to £125.4m Net Fee Income (NFI) down 9% on 2009 H2 to £12.5m

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2010 interim results april 2010 25 years delivering recruitment solutions

2010 Interim ResultsApril 201025 years delivering recruitment solutions

Adrian Gunn - Chief Executive Officer

Tony Dyer - Chief Financial Officer

headlines trading in line with expectations
HeadlinesTrading in line with expectations
  • Revenue down 5% on 2009 H2 to £125.4m
  • Net Fee Income (NFI) down 9% on 2009 H2 to £12.5m
  • Permanent recruitment fees stable for 11 consecutive months
  • Record number of contractors on assignment
  • Average time sheet value down 8% (January 2010 v July 2009)
  • Operational cost savings of £2.3m v 2009 H1
  • Improved operating cash conversion
  • Net cash £0.8m - July 2009: net debt £1.2 m
  • Banking facilities extended until March 2013
  • Interim dividend maintained at 5.0 pence per share
well balanced business top 50 clients 55 of nfi
Well balanced businessTop 50 clients - 55% of NFI
  • > 1,500 clients
  • % of NFI
  • Top client 10%
  • Top 5 26%
  • Top 10 33%
  • Top 50 55%
sector analysis public private split of nfi
Sector AnalysisPublic/Private split of NFI

19% UK Defence

16% Energy

Private for Public : 35%

8% Marine

9% Transport

Private Sector Clients: 49%

8% Technology

5% Local Authorities

6% Aerospace

5% Highways

Public Bodies: 16%

5% Utilities

4% Automotive

3% Buildings

3% Health

2% Professional

3% Infrastructure

1% Pharmaceutical

2% Education

1% Other

permanent activity stable for 11 consecutive months from may 2009 to march 2010
Permanent ActivityStable for 11 consecutive months from May 2009 to March 2010

Engineering Average Weekly Perm Placements

Built Environment Average Weekly Perm Placements

managing the cost base operational cost savings
Managing the cost baseoperational cost savings
  • Significant operational cost savings compared to 2009 H1:

(Including a write back of unvested LTIP charges of £0.3m)

  • Capital expenditure on hold - 2010 H2 is expected to be circa £0.4m
engineering 2010 h1 56 of nfi
NFI Contractor/Perm split: 81:19 (2009 H1: 71:29; 2009 H2: 79:21)

Gross margin 9.2%

(2009 H1: 11.0%; 2009 H2: 9.7%)

NFI conversion rate 44.3%

(2009 H1: 43.0%; 2009 H2: 43.8%)

2,896 contractors working at period end (2009 H1: 2,495; 2009 H2: 2,625)

325 perm placements

(2009 H1: 606; 2009 H2: 326)

£4,000 average perm fee

(2009 H1: £4,068; 2009 H2: £4,601)

76 in sales force at period end

(2009 H1: 90; 2009 H2: 76)

Engineering 2010 H156% of NFI
engineering 2010 h1 56 of nfi1
Engineering 2010 H156% of NFI
  • Maintaining Key Clients
    • BAE Surface Ships (South) via Xchanging – Master Vendor to October 2011
    • Babcock Marine – Preferred Supplier to June 2013
    • AgustaWestland – Preferred Supplier Framework to January 2018
    • ExxonMobil Chemicals – Preferred Supplier Framework rolling annual contract
  • Developing New Clients
    • BP – Preferred Supplier Framework
    • KBR – Preferred Supplier Framework
    • Invensys Process Systems – Managed Agency
    • Hyde Group – Sole Supplier
    • GE Group – Preferred Supplier Framework
  • Current Market Forces
    • Supplier rationalisation on framework agreements
    • Easing pressure on margins and pay rates
    • High demand for niche skill types
    • Renewed optimism across industry sectors
built environment 2010 h1 22 of nfi
Contractor/Perm split of NFI: 89:11 (2009 H1: 81:19; 2009 H2: 91:9)

Gross margin 9.4%

(2009 H1: 11.7%; 2009 H2: 10.0%)

NFI conversion rate 37.0%

(2009 H1: 40.5%; 2009 H2: 39.4%)

1,063 contractors working at period end (2009 H1: 1,192; 2009 H2: 1,030)

86 perm placements

(2009 H1: 192; 2009 H2: 87)

£3,488 average perm fee

(2009 H1: £4,167; 2009 H2 £3,448)

42 in sales force at period end

(2009 H1: 47; 2009 H2: 43)

Built Environment 2010 H122% of NFI
built environment 2010 h1 22 of nfi1
Built Environment 2010 H1 22% of NFI
  • Maintaining Key Clients
    • Mouchel - Master Vendor to September 2012
    • WSP – Master Vendor to January 2013
    • Arup – Preferred Supplier Framework rolling annual contract
    • Atkins - Preferred Supplier Framework to September 2010
    • Transport for London – PSL Framework tender in progress
  • Developing New Clients
    • Halcrow – Preferred Supplier Framework
    • Ringway Jacobs – Preferred Supplier Framework
    • Costain – Preferred Supplier Framework
    • Balfour Beatty – Preferred Supplier Framework
  • Current Market Forces
    • Supplier rationalisation on framework agreements
    • Direct recruitment by clients internal Talent Acquisition Teams
    • Local Authority spend on highways and transportation projects stabilised
    • Consultant Engineers planning growth in the Nuclear and Renewable sectors
professional services 2010 h1 22 of nfi
Contractor/Perm split of NFI: 56:44 (2009 H1: 50:50; 2009 H2: 58:42)

Gross margin 13.2%

(2009 H1: 15.8%; 2009 H2: 13.1%)

NFI conversion rate 22.2%

(2009 H1: 26.3%; 2009 H2: 25.8%)

776 contractors working at period end (2009 H1: 830; 2009 H2: 805)

367 perm placements

(2009 H1: 538; 2009 H2: 371)

£3,270 average perm fee

(2009 H1: £3,511; 2009 H2: £3,504)

49 in sales force at period end

(2009 H1: 60; 2009 H2: 50)

Professional Services 2010 H122% of NFI
professional services 2010 h1 22 of nfi1
Professional Services 2010 H1 22% of NFI
  • Maintaining Key Clients
    • NHS via Buying Solutions - PSL Framework to December 2011
    • VT Group – RPO to January 2012
    • Arqiva – PSL Framework to April 2012
    • Transport for London – PSL Framework Tender in progress
  • Developing New Clients
    • IT PSL wins - Cap Gemini, Cognizant, Diageo, Samsung, Tate & Lyle and SAB Miller
    • Commercial PSL wins – Shell, BP, Anglo American, Rathbone, Bombardier, Procurement Scotland, Grant Thornton and BDO Stoy Hayward
  • Current Market Forces
    • Supplier rationalisation on framework agreements
    • Direct recruitment by clients internal Talent Acquisition Teams
    • Increased importance of Social & Professional networking for candidate sourcing
    • IT, HR and Sales & Marketing seeing a marked increase in permanent activity
    • Key senior appointments made as part of our plans for expansion in FY2010/11
growth strategy matchtech uk building on core revenue streams
Growth StrategyMatchtech UK :Building on core revenue streams

Restructuring Matchtech UK into four markets:

Engineering

Built Environment

IT & Technology

Scientific & Medical

Increasing sales force headcount across all four markets

Maximising revenue from new Preferred Supplier Framework wins

Improving functionality of www.matchtech.com

Focusing business development activity in key markets:

Nuclear

Renewable Energy

Rail Infrastructure

growth strategy developing additional revenue streams
Growth StrategyDeveloping additional revenue streams

International Expansion

Germany : already moving into new larger premises

Netherlands : creating a virtual office

Middle East : developing agency partnerships

Elemense RPO

Dedicated profit centre from August 2010 onwards

Continuing to win new business in the technical sector

Recruiting senior individuals to win business in the Non-Technical space

Professional Services

Restructured our professional service offering

Nigel Lynn recruited at Group Executive level to Head Professional Services

Planning to open additional strategic offices

Launching Barclay Meade and Alderwood Education brands Summer 2010

outlook strong fundamentals growth strategy
OutlookStrong fundamentals & Growth strategy

Resilient : Matchtech UK - Single site technical contract business model

Contractors : Record number on assignment

Permanent Fees : Capability and resource to increase rapidly

International : Expanding into selected markets

Professional Services : Strategic managerial appointments, strategic office rollout & new brands

Sales force headcount : Increasing across all sectors

Cash : Good cash generation & extended bank facilities

Dividend policy : Board’s commitment to maintain a strong dividend payout

“The Board now expects the results for the year to 31 July 2010 to be

slightly ahead of its previous expectations and remains confident in the Group’s

prospects over the medium term .”

25 years of delivering compliant recruitment solutions innovative
25 years of delivering compliant recruitment solutionsinnovative

Matchmaker

Personnel

established

Matchmaker Personnel

& Matchtech Engineering

merge forming

Matchtech Group plc

Matchtech Group plc

floats on the

AIM market of the

London Stock Exchange

RPO solution

‘elemense’ launched

Matchtech

Engineering &

Matchtech Inc

established

Matchtech GmbH established

Managed

Service

Division

established

Matchtech Inc sold

INC

1984 1985 1990 1997 2002 2003 2004 2005 2006 2007 2008 2009

Matchtech

joined REC

Launch of Online

Recruitment

Management

System

BS25999:2008

Business Continuity

Standard achieved

ISO 9001:2000 Quality

ISO 14001:1999 Environmental

OHSAS 18001:1999 Health

and Safety

Matchmaker

joined REC

Launch of

in-house

Database

‘eMploy’

Diversity Assured

standard achieved

Joined

APSCO

Achieved

REC Audited

standard

market leader in technical recruitment 14 th largest uk recruitment business
Market leader in technical recruitment14th largest UK recruitment business
  • Established for 25 years
  • Strong track record of organic NFI and profit growth
  • Experienced management team, with high staff retention
  • Resilient contractor-driven business, with effective permanent strategy
  • Well balanced business: broad spread of clients/sectors, many longstanding relationships
  • Focus on sectors with long-term investment horizons
  • Efficient systems and high operational flexibility, with UK covered from a single site
  • Strong balance sheet. Net cash at 31 January 2010
  • Clear momentum in the business, despite market downturn
  • Long term growth strategy in place

growth cash generation

highly experienced management team 75 of management have over 8 years service
Highly experienced management team75% of management have over 8 years service

George Materna - Non-Executive Chairman

Over 30 years experience of the recruitment industry, and is the founder of Matchtech.

Adrian Gunn - Chief Executive Officer

Joined in 1988; appointed to PLC Board in 2004 as Business Development Director, Group Sales Director and Group MD before becoming CEO in 2009. Non-Executive Director of Recruitment and Employment Confederation

Tony Dyer – Chief Financial Officer

Qualified as Chartered Management Accountant in 1995. Joined Matchtech in 1996 as management accountant. Appointed to PLC Board in 2004 as Finance Director before becoming CFO in 2009.

Andy White - Non-Executive Deputy Chairman

A chartered engineer, he formed Matchtech Engineering with George Materna in 1990.

Ric Piper - Non-Executive Director

Chairman and NED of a number of AIM & privately owned businesses. A Chartered Accountant, Ric is a member of the Financial Reporting Review Panel. He has been a member of the Matchtech board since 2006.

Stephen Burke - Non-Executive Director

Over 25 years experience in the recruitment industry with Michael Page in 1981, including 10 years setting up businesses in Europe and then as a plc Director from 2001-2005. A member of the Matchtech board since 2006.

Experienced management team