Companies: MTEC   

Recruiter Matchtech, which supplies high-quality engineering and technical staff for long-term projects ranging from Crossrail to the widening of the M25, has seen its market valuation reduce amid the de-rating of the recruitment sector.

However, like its quoted peer Morson, the company, a low cost concern operating from a single site near Southampton, represents a far more robust investment than the market gives it credit for, based on the long-term nature of its contracts in sectors where spend looks assured.

Established in 1984 and floated on AIM towards the back end of 2006, the company has grown entirely organically rather than through acquisitions, which may or may not add value. Moreover, a recent pre-close update – covering the financial year to July – highlighted another strong annual performance in the face of economic headwinds.

Matchtech enjoyed 20% plus growth in net fee income (NFI) in its core engineering, ‘built environment’ and support services operations and Adrian Gunn, the group’s upbeat managing director, says investors can expect group NFI growth of 23% over last year’s £26.9m – with the full year results to come in ‘at the upper end’ of expectations. Demand for contract and permanent staff, across a diverse array of clients and sectors, apparently remains strong.

Following the update, Arbuthnot Securities upgraded its July 2008 PBT forecast from £12.3m to £12.5m, whilst the ’09 estimate of £13.1m remains. At current levels – the price has dropped from a 52-week peak of 471.5p – shares in this resilient, growing, dividend paying performer should have much further to go in fairer climes. Buy.

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Matchtech	AIM	£48.78m	210.00p	-4.00p
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Other company articles:
Matchtech Group			14/10/2008
Matchtech Group			06/08/2008
Resilience in recruitment?			01/02/2008
Newcomer - Matchtech			27/10/2006