Companies: MTEC   

Despite its decidedly defensive bent, technical recruiter Matchtech has been heavily and harshly marked down in line with the wider staffing sector.

However, the market is missing a trick, since the clients and sectors Matchtech serves boast good growth characteristics and projects it supplies – ranging from the widening of the M25 to the construction of the Olympic site – typically offer long-term, insulated earnings.

In addition, its chosen technical staffing markets continue to suffer from skills shortages, which should ensure ongoing demand for both contract and permanent staffing even if the economy slows.

Annual results to July from Matchtech, guided by managing director Adrian Gunn, demonstrated growth on every key metric. On record turnover of £258.8m, up almost 30%, net fee income gathered up 23% at £33.2m, pre-tax profits advanced from £10.5m to £12.8m and the dividend was lifted from 13.7p to 15.6p, covered 2.5 times by earnings of 39.34p (2007: 32.42p).

Significantly improved cash generation, rising from £8.1m to almost £15m, allowed for a £6.7m net debt reduction to £3.1m during a year in which strong organic growth and record profits were achieved across the group's core sectors of engineering, built environment and support services.

Trading remains robust, with net fee income in the opening two months of the current year up 13% year on year. Forecast to deliver earnings of 43.5p for July 2009, Matchtech trades on a ludicrously low prospective multiple of 4.8. Understandably perhaps, management will seek shareholder approval to buy back shares at the forthcoming AGM. Buy for share price recovery.
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Matchtech	AIM	£48.67m	209.50p	-1.00p
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Other company articles:
Matchtech Group			14/10/2008
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Resilience in recruitment?			01/02/2008
Newcomer - Matchtech			27/10/2006