Gattaca shares sink after profit warning
By Iain Gilbert
Date: Wednesday 29 Jan 2020
(Sharecast News) - Recruitment firm Gattaca said it now expected full-year continuing underlying pre-tax profits to be approximately £6m, well below consensus expectations of £10m as political and economic uncertainty in the UK hit fee income.
Gattaca on Wednesday said it had experienced "a challenging environment" across the staffing market during the first half of the fiscal year as net fee income came in 11% lower than the same period last year.
The AIM-listed group also said the market had not recovered as quickly as expected and short-term growth remains uncertain, despite the decisive result in December's General Election which saw the Conservative Party win an 80 seat majority.
"The timing of UK investment in major infrastructure projects is still not clear and certain manufacturing, automotive and rail sectors continue to be impacted by a lack of confidence," said Gattaca, which added there was also "continued uncertainty" surrounding IR35.
Gattaca's board said it remained confident that the actions it has taken, including the implementation of its ongoing improvement plan, would position the firm well for growth when market conditions improve.
"Nevertheless, in the short-term, costs will be kept under close review," added the firm.
As of 1005 GMT, Gattaca shares had sunk 15.75% to 88.46p.
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