Gattaca profits tumble as recruitment market remains flat

Gattaca, a staffing specialist, has reported a decrease in profit due to ongoing challenges in the recruitment market.

The company announced that its post-tax profit dropped by 34 per cent to £0.5m in the six months ending January 31, as reported by City AM.

Net fee income, a crucial performance indicator in the recruitment industry, fell three per cent to £18.9m.

However, revenue increased by three per cent to £193.5m, up from £187.6m the previous year.

Gattaca stated: "Permanent recruitment remains subdued, and we anticipate this trend to continue in the medium term."

The firm also noted that the persistent macroeconomic headwinds impacting the broader recruitment sector have significantly affected both client demand and candidate sentiment, reducing volume and extending recruitment timelines.

"This has acted as a headwind on our recent performance," the company added.

The recruitment sector experienced a boom in 2020 due to a surge in hiring led by the tech sector. However, the industry has faced difficulties since the end of the pandemic.

Job cuts and hiring freezes have reduced demand for recruitment services, and potential candidates have been hesitant to change jobs.

In addition to Gattaca, rival staffing firms Hays, Pagegroup and Robert Walters have all cut their workforce and lowered their forecasts. Matthew Wragg, Chief Executive of Gattaca, said the company was managing the prolonged downturn through "operational efficiency, cost discipline, and a focus on productivity."

Gattaca underwent a restructuring of its US operations last year, shifting all support functions to the UK and releasing its US-based sales and support personnel.

The company's chief executive, stated: "We will drive continued growth in our core markets throughout the second half, aiming for a strong year-end.

"[During the first half] we have retained our customer base, further improved our performance per head, continued to grow our contractor book, are seeing the results of our strategic investments and are confident in achieving our full year PBT expectations."