Temp demand drives Matchtec profits

Recruitment agency Matchtec saw profits rise 39 per cent in the first half of the financial year as companies clamoured for its contractors.

In the six month to the end of January the firm had a record number of contractors on placement, up 23% on the year before to 6,400.

This helped push revenue up 25% to £176.7m and pre-tax profits up 39% to £3.2m.

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Net fee income (NFI) - revenue minus contractor payroll costs - was up 26% to £17.2m.

Basic earnings per share were up 39% to 9.5p and the firm maintained its interim dividend at 5.0p.

"Matchtech UK has seen unprecedented demand for contract staff within its core markets, with a record number of contractors on assignment, and professional services has fuelled strong growth in permanent fees," said chairman George Materna.

Permanent recruitment fees now represent 33% of group NFI, the firm said.

"Trading has continued to progress solidly since our last update on 2 February 2012 and the board currently anticipates that the results for the year to 31 July 2012 will be in line with its previous expectations," Materna added.

The results pleased investors who pushed shares up almost 3% in morning trading on Wednesday.