Matchtech cuts further jobs as professional services weakens

6th Aug 2015 13:42

(ShareCast News) - Engineering and technical job recruiter Matchtech said its full-year trading remains in line with expectations despite a weaker professional services businesses.In a trading update, the group said its net finance income rose 22% to £55m for the year ended 31 July 2015 in both contract and permanent divisions.However, Matchtech closed its Barclay Meade London operation as its professional services division saw contract income fall 2% and permanent fees decline 14%. The group said the operation had not gained enough traction to be viable over the medium term.Furthermore, the investment in headcount at the end of last year and the first half of 2015 did not translate into an expected increase in client demand.As a result, its sales team was reduced by 33 members of staff, excluding the 28 employees dismissed at the time of the closure of Barclay Meade.On a brigher note, since its acquisition, the Networkers business has performed in line with expectations, with contract income rising 3%, even though permanent income fell 7% compared with the previous quarter.Chief executive Brian Wilkinson said the group will merge the Matchtech and Networkers' IT businesses in the beginning of the new financial year and will integrate the engineering businesses, both to increase performance in the UK and internationally.He added: "Looking ahead, the board's plan is for group NFI to return to growth in the second half of the 2016 financial year, with further growth over the medium term. I remain confident that we will convert the exciting opportunities available to the group into growth."House broker Numis said it believed the integration of Networkers will bring "significant potential for cost-savings and cross-selling opportunities". Analysts also said that a slightly stronger than expected engineering perm mix compensated a slightly softer demand in professional services.Shares fell 3% to 567p on Thursday at 13:45.