AIM-listed recruiter expects FY profits to be around 10-15% lower than previous forecast
Shares in Gattaca fell 10% on Thursday after the AIM-listed recruitment firm told investors it had reviewed its outlook for the rest of the year to 31 July and now expected profits to be around 10-15% lower than its prior expectations.
Consensus forecasts had expected the company to report an EPS of around 40, but that looks likely to now be c.34-36. Last year, the firm reported 35p/share normalised EPS, so it could fall YoY now.
Gattaca said performance in H1 reflected the tougher UK trading conditions the company has faced since the Brexit vote:
"The softening in NFI in the first half was driven by near-term uncertainty which led to elongated hiring decisions and some projects being delayed; however the medium-term outlook in our sectors remains positive with some signs of a return of confidence in recent weeks."
There were also unanticipated one-time cost overruns relating to the establishment of international entities to support a European contract win and investments in infrastructure.
Today's warning comes after a series of reports showed slowing UK revenues in the recruitment sector as a whole, with larger peers Hays and PageGroup reporting similar stories earlier this week.
Gattaca is currently trading at a low forward p/e compared to its sector (7x vs. 14x), following a significant share price decline in the past year of more than 40%.