Matchtech

In its latest trading update, technical recruiter Matchtech has reported a 14% fall in net fee income for the year to July.

Matchtech, which recruits for sectors including defence, marine & shipping and engineering, saw reduced volumes last year amidst a decline in recruitment across those industries. Adrian Gunn, CEO, who joined the company as a recruitment consultant and has worked at Matchtech for twenty-two years now, explains the AIM-listed concern is looking to build on its capability of and experience in sourcing permanent employees for clients.

Asked if Matchtech was overly-exposed to potential cuts by the coalition government, finance director Tony Dyer said '50% of our work is public sector-funded, however only 19% is with direct clients such as Transport for London (TFL) or local authorities'. He also pointed out that the type of contractor Matchtech supplies works on infrastructure projects in sectors such as highways. 'Maintenance of assets such as roads is essential', Dyer explained, 'and therefore we expect a continuation of contracts in those areas'.

Regardless of government spending cuts, which could affect business from major clients including BAE Systems and Babcock, Matchtech is a fundamentally good company with a cash-generative model, an experienced board and a generous dividend policy. Broker KBC Peel Hunt expects the company to pay out 14p in dividends for the years to July 2010 and 2011, meaning Matchtech shares, recommended by Growth Company Investor at 222.5p in February, offer a bumper 7.2% yield at these lowly levels. They are well worth holding onto for the attractive and dependable dividend alone.