H1 2026: Big jump in profits as NFI momentum builds
Gattaca has posted a strong first half with double-digit growth in revenue and Net Fee Income (NFI), and a sharp improvement in profitability. The business is leaning into contract recruitment, targeting core STEM sectors, and it shows. Operating profit from continuing operations rose 431% to £2.6 million, while continuing underlying profit before tax climbed to £3.0 million.
Before we dive in, a quick jargon check: NFI is revenue minus contractor payroll costs – it’s the cleaner measure of gross profit for staffing firms. “Like-for-like” (LFL) excludes the InfoSec People acquisition to give a fair year-on-year comparison. Statement of Work (SoW) is project-style work where Gattaca delivers defined outcomes, typically at higher margins.
Key H1 2026 numbers investors should care about
| Metric (continuing) | 2026 H1 | 2025 H1 | YoY |
|---|---|---|---|
| Revenue | £212.4 million | £193.5 million | +10% |
| Net Fee Income (NFI) | £21.4 million | £18.9 million | +13% |
| Operating profit | £2.6 million | £0.5 million | +431% |
| Continuing underlying PBT | £3.0 million | £1.0 million | +187% |
| Profit after tax (continuing) | £1.8 million | £0.5 million | +269% |
| Basic EPS | 5.6 pence | 2.0 pence | +174% |
| Underlying EPS (continuing) | 6.9 pence | 2.2 pence | +215% |
| Net cash | £13.0 million | £16.8 million | -19% |
| Interim dividend | 1.33 pence | 1.0 pence | +33% |
Guidance for FY26 continuing underlying PBT is unchanged at £4.5 million, and management says trading is in line with upgraded expectations.
Where the growth came from: sectors and mix
Infrastructure, Defence and Energy did the heavy lifting
- Infrastructure (34% of Group NFI) rose 6% YoY to £7.2 million, with Water and Highways offsetting weaker Rail.
- Defence bounced back with 29% YoY growth to £4.1 million, now ahead of 2024 H1 levels.
- Energy grew 13% to £3.3 million as investment in sales headcount matures; management expects “further strong growth”.
- Digital Technology increased 13% to £1.8 million despite tough tech hiring markets, helped by Project Management, PMO, data and AI skills.
- Mobility edged up 6% to £1.9 million; aerospace MRO (maintenance, repair and operations) is a focus while deliveries are delayed.
- Gattaca Projects (SoW) NFI dropped to £0.6 million (down 45%), with a mix shift towards lower-margin, time-based work. SoW revenue fell 8% YoY.
Business mix is deliberately defensive
Contracts made up 77% of Group NFI, SoW 4%, and Permanent 19% (2025 H1: 74% / 6% / 20%). LFL Contract NFI was up 15%, but LFL Permanent was down 4% as clients remain cautious. This skew to contracts tends to smooth earnings in choppy markets.
Margins: broadly stable where it counts
- Contract NFI margin: 8.2% (2025 H1: 7.6%).
- Gattaca Projects SoW margin: 11.9% (2025 H1: 19.9%) due to the lower-margin project mix.
Acquisition update: InfoSec People adds cyber firepower
Gattaca completed the acquisition of InfoSec People on 4 August 2025. Since acquisition, it has contributed £5.7 million of revenue and £1.0 million of NFI to continuing operations, and £169,000 to Group profit after tax. It sits within “Other” and expands the Group’s Cyber & Security capability.
Importantly for trend analysis, the Group quotes LFL metrics excluding InfoSec. On that basis, LFL NFI was £20.4 million, up 8% YoY.
Cash, working capital and dividend
Net cash reduced to £13.0 million (from £16.8 million), reflecting working capital absorption from more contractors, cash paid for the InfoSec acquisition and the FY25 final dividend. Average daily net cash was £9.5 million (2025 H1: £13.2 million). Days sales outstanding rose to 47 days (31 July 2025: 43 days), a typical seasonal uptick around Christmas.
The Group retains a £50 million invoice financing facility with HSBC, with £24.8 million of unutilised headroom at 31 January 2026. The interim dividend is up 33% to 1.33 pence per share, payable on 15 May 2026 to holders on 7 April 2026.
Operational tone: productivity up, brand unified, tech-enabled
- Sales headcount was 360 at 31 January 2026, down 7% YoY, with a drive to move resources into front-line sales and keep support lean (sales-to-support ratio steady at 71:29).
- Average NFI per sales head, and per total heads, rose 21% YoY – a good sign of productivity gains.
- Recruitment brands have been rolled into a single Matchtech brand to improve awareness and candidate engagement. Website placements rose 30% and registrations 3%.
- ISO27001 achieved; “MAIA” (Matchtech AI and automation) launched to enhance sales and back-office effectiveness.
- Client feedback improved to 8.9, and people engagement was steady at 8.4 with attrition down to 27%.
Outlook and guidance: measured confidence
Management calls out persistent macro headwinds in recruitment, particularly in permanent hiring, which is expected to remain subdued in the medium term. The plan is to keep investing in core sectors where Gattaca can take share, aiming for c.10% sales headcount growth this year and staying alert for bolt-on M&A. Cost discipline remains a theme.
FY26 guidance for continuing underlying PBT remains £4.5 million. The CEO notes the Group is trading in line with upgraded expectations and is integrating InfoSec capability across clients.
Josh’s take: what’s good, what’s not, and why it matters
Positives
- Profit quality improving: NFI up 13% and operating profit up 431% shows operating leverage and margin focus are working.
- Right sector exposure: Defence (+29%), Energy (+13%) and Infrastructure (+6%) are long-cycle, investment-led markets with skills shortages.
- Contract-led model: 77% of NFI from contracts cushions volatility, while permanent remains weak.
- Dividend growth: interim up 33% with a stated medium-term intention to pay out 50% of post-tax profit.
- Balance sheet: still in net cash with ample facility headroom to support growth and selective M&A.
Watch-outs
- Cash drift: net cash down to £13.0 million and DSO at 47 days – seasonal, but worth tracking in H2.
- SoW softness: Gattaca Projects revenue down 8% and NFI down 45% as mix shifts to lower-margin work.
- Permanent hiring: LFL Permanent NFI down 4% – management expects the market to stay subdued.
- Customer concentration: one Defence customer was 11.1% of Group revenue in the period.
- Contingent liabilities: ongoing co‑operation with the US Department of Justice and some outstanding non-UK tax filings – financial impact not disclosed.
Bottom line
This is a clean, better-than-steady set of interims. The contract engine is humming, sectors with structural demand are growing, and productivity is up. If cash conversion improves in H2 and SoW activity normalises, FY26 guidance of £4.5 million continuing underlying PBT looks achievable with some headroom.
What to watch next
- NFI trajectory in Energy, Defence and Infrastructure through H2.
- Permanent market signs – even a modest uptick would help mix and margins.
- Cash conversion: DSO trend back towards the 31 July 2025 level of 43 days and net cash rebuild.
- InfoSec People integration – cross-sell into core clients and growth of Cyber within “Other”.
- Impact of the Matchtech brand consolidation and MAIA automation on lead generation and fill rates.
- Any bolt-on acquisitions and how the 50% dividend payout intent flexes alongside M&A.
