Matchtech Group saw a 9% fall in net fee income in the 12 months ending 31 July 2009, according to the company’s trading statement.

The decline was mainly due to a drop in demand for permanent recruitment services in the second half of the year with a corresponding 24% fall, following an 8% rise in NFI in the first half.

Permanent fees for the year were down 24% to £8.3m. The built environment sector saw the largest annual fall of 52% with professional services falling by 23% and engineering by 9%.

NFI from contract placements was essentially unchanged from the previous year at £21.9m with NFI each quarter of £6m, £5.4m, £5.5m and £5m. 

Although contractor numbers have essentially remained stable since 31 January, contract margins remained under pressure.

The company says it took early action on its cost base, reducing staff numbers by 20% from a peak of 330 in December 2008 to 263 at 31 July 2009, with no exceptional charges arising.  

The group continued to benefit from low net debt, which at 31 July 2009 was £1.3m.

Matchtech says: “Short-term trading conditions remain challenging with no sign yet of any pick up in the level of permanent recruitment and continued pressure on contract margins. As a result the board remains cautious with regard to the outlook for 2010 and its expectations have been reset to reflect this trading environment.

“Matchtech continues to invest for the future and to pursue new organic growth opportunities, extending the reach of our services which the board is confident will increase growth in the longer term.”