RTC Group interim results: resilient margins and cash, but profits retreat

RTC Group's first-half figures are a mixed but fairly clear-cut set of results. Trading has weakened, profits are down and management expects difficult conditions to continue through the rest of 2026.

On the other hand, the engineering and technical recruitment group remains profitable, cash-generative and free of term debt. Its gross margin was also broadly unchanged despite higher fuel and employment costs.

For investors, the key question is whether RTC is simply navigating a temporary slowdown or facing a more persistent squeeze on activity and profitability.

RTC Group's first-half figures

Key figure	H1 2026	H1 2025
Revenue	£45.2 million	£48.3 million
Gross profit	£8.3 million	£8.9 million
Gross margin	18.3%	18.4%
Administrative costs	£7.5 million	£7.6 million
Profit from operations	£0.8 million	£1.3 million
Profit before tax	£0.7 million	£1.2 million
Earnings per share	4.21p	6.62p
Operating cash inflow	£0.9 million	£3.2 million

Revenue declined as softer conditions in energy, permanent recruitment and international markets offset stronger rail and infrastructure trading.

Profit from operations fell to £786,000 from £1.3 million, while profit before tax dropped to £747,000 from £1.2 million. Profit attributable to shareholders was £528,000, compared with £887,000 a year earlier.

That is clearly weaker, but the gross margin tells a more encouraging story. It slipped only slightly to 18.3% from 18.4%, despite higher fuel prices, wage increases and additional employment costs.

Administrative expenses were also reduced to £7.5 million from £7.6 million. RTC says it achieved this while absorbing government policy-related cost increases and continuing to invest in training, development, health and safety.

Why profits fell despite stable margins

RTC's challenge was primarily lower activity rather than a collapse in group-wide pricing or gross margin.

The UK recruitment division generated revenue of £42.3 million, down from £45.2 million. Its gross margin remained unchanged at 17.8%, although operating profit fell to £2.4 million from £2.8 million.

Rail and infrastructure activity performed ahead of the prior year, supported by resilient maintenance demand. RTC also secured four significant awards and extensions in these markets.

However, the energy division was affected by the transition in smart metering. The industry is moving from the initial installation phase towards maintaining and upgrading the existing meter estate. This has temporarily reduced activity, while the proposed acquisition of OVO Energy by E.ON has created further short-term uncertainty around investment decisions.

Permanent recruitment also remained subdued. Employers are being cautious because of economic uncertainty, higher employment costs and forthcoming employment legislation. RTC intends to maintain its base level of consultant headcount through the rest of 2026 rather than cut capacity.

That protects RTC's ability to respond to a recovery, but it also means carrying costs while demand remains weak.

International recruitment remains a pressure point

International recruitment revenue decreased to £2.0 million from £2.1 million, but the more notable movement was in profitability.

Gross profit declined to £287,000 from £433,000, while gross margin fell to 14.6% from 20.5%. Operating profit dropped to £59,000 from £228,000.

RTC attributes the performance to project life cycles, the mix of delivery models and uncertainty created by changes in the United States' international priorities. The group is retaining the core team needed to deliver international contracts if activity improves.

Again, this is a deliberate decision to preserve capability, but the cost of doing so is visible in current earnings.

The balance sheet provides useful protection

RTC ended June with £3.8 million of cash and cash equivalents, compared with £3.9 million at the end of December 2025. This was after paying £690,000 in dividends during the period.

The group has no term debt and no borrowings other than lease liabilities. It also had no overdraft or invoice discounting funds in use at the period end.

Invoice discounting allows a company to borrow against unpaid customer invoices. RTC has access to a facility of up to £12 million with HSBC, although none of it was being used on 30 June.

Net assets were £8.0 million, compared with £8.2 million at the end of 2025. Management also reported fully diluted net asset value of 64p per share.

Operating cash generation weakened to £0.9 million from £3.2 million. The company explained that the prior-year comparison benefited from unusually favourable working-capital movements, including the clearance of aged customer debts.

The lower cash inflow is still worth watching, but RTC remained cash-generative while paying dividends and making modest investments in equipment and intangible assets.

The dividend is maintained

The board proposed an unchanged interim dividend of 1.21p per share. It is due to be paid on 2 October 2026 to shareholders on the register on 4 September 2026.

This follows the 5.5p final dividend for 2025, which was 10% above the previous year's final payment. Total dividends relating to 2025 were 6.71p per share, also 10% higher than for 2024.

Maintaining the interim dividend demonstrates confidence in the group's cash position. However, first-half earnings per share fell to 4.21p from 6.62p, so investors should continue to compare future distributions with earnings and cash generation rather than assume annual increases are guaranteed.

Order-book strength meets an uncertain outlook

RTC secured six significant contract wins and extensions during the half, including long-term agreements with key customers. The board describes the order book as resilient and sustainable.

Potential longer-term opportunities include Network Rail's Control Period 7, the water sector's AMP8 investment programme and more than £700 billion of planned UK infrastructure spending over the coming decade. Smart metering maintenance may also provide work relating to the more than 40 million smart and advanced meters already installed in Great Britain.

The difficulty is timing. Infrastructure programmes may be delayed or reprioritised, smart metering is still transitioning and international project decisions remain uncertain.

Management has therefore deferred its planned return to formal market guidance. That is understandable, but it leaves investors with less visibility over the second half and means the order book cannot yet be translated into a disclosed profit expectation.

What RTC investors should watch next

The positive features are a stable gross margin, controlled overheads, continued cash generation, no term debt and six contract wins or extensions. These give RTC room to retain experienced staff and invest through the downturn.

The negatives are equally visible. Revenue, operating profit, profit before tax, earnings per share and operating cash inflow all declined. International margins weakened sharply, while energy and permanent recruitment remain under pressure.

RTC's financial position looks more resilient than its current earnings trend. The next update will need to show whether contract wins and infrastructure demand can begin converting into stronger revenue, without higher costs eroding the margin discipline demonstrated in this half.