Gattaca PLC (LON:GATC) shares soared in mid-morning on Wednesday after it reported an increase in first half profits and retained a confident outlook for the rest of the year despite ongoing economic uncertainty.
The engineering and IT recruitment firm reported an underlying pre-tax profit for the six months ended 31 January of £6.8mln, 12% higher than the prior year, while revenues were up 6% at £322.3mln.
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Net fee income (NFI), which is generated by providing services for clients, was up 2% in the period to £36.5mln.
The increase was driven mainly by the company’s UK Engineering arm, which saw NFI rise 4% in the year, while a 15% increase in international NFI offset a 13% drop from the UK Technology division.
The group’s net debt also fell to £27.8mln from £36.2mln.
The results mark a positive first half for the firm following a gloomy full year, when it swung to a loss and offloaded its struggling telecoms recruitment business in Africa, Asia and Latin America in an effort to turn things around.
Shares jumped up on the news, rising 14% to 132.5p.
The upbeat investor mood was also despite Gattaca scrapping its interim dividend compared to a 3p per share pay out last year. However, the company added that it would consider dividends at year end and that if resumed this would be at “modest” levels.
Looking ahead, the group noted that “economic uncertainty” which could impact the industry had increased over the last six months, although trading so far in its third quarter had been “as expected” and it was confident in its outlook for the full year.
"The first half of [2019] has been a period of progress for the Group and we are pleased to be reporting NFI and PBT growth in our continuing operations”, said Kevin Freeguard, Gattaca’s chief executive who joined in October.
“Our core UK Engineering business delivered continued growth and the restructuring work we undertook in our UK Technology operations in [the first quarter] has begun to feed through into an improved year-on-year operating contribution.”