RTC Group Plc (LSE:RTC), the AIM-listed recruitment specialist serving the infrastructure, engineering and technical sectors, said it entered 2026 with strong momentum following a record profit after tax, solid cash generation and balance sheet growth in 2025, supporting a 10% increase in the dividend. The company reported continued positive trading through the first quarter, alongside six significant contract wins and resilient demand across its core rail maintenance and infrastructure markets. Its conferencing division also performed ahead of the prior year despite increased government-related operating costs.
Management cautioned that second-quarter trading has been affected by geopolitical tensions linked to the Iran conflict, which have driven fuel prices sharply higher and increased fleet-related costs, putting pressure on margins within the Rail and Energy divisions. Elevated energy costs are also reducing activity among smaller manufacturing customers and weakening demand for temporary labour. RTC further highlighted continued weakness in the permanent recruitment market, with vacancy levels falling to their lowest point since 2021 as higher employment costs and reduced worker mobility weigh on hiring activity. The company additionally noted softer short-term demand in its Energy division as the smart metering market moves beyond the initial rollout stage.
While rail operations have improved since the beginning of the current contract period, performance remains below expectations for the CP7 cycle, reflecting wider delays to rail enhancement projects across the sector. Nevertheless, RTC stated that strong cash generation during 2025 has left the business with a solid financial position, including a debt-free balance sheet with no term borrowings. Management said this provides flexibility to navigate broader industry headwinds while maintaining focus on operating cash flow and disciplined cost management ahead of interim results scheduled for release in late July.
The company’s outlook continues to be supported by attractive valuation metrics, including a low price-to-earnings ratio and a relatively high dividend yield, alongside improved balance sheet strength and strong recent free cash flow performance. However, these positives are partly offset by risks surrounding weaker revenue growth and technically overbought trading conditions that could increase short-term share price volatility.
More about RTC Group plc
RTC Group Plc (LSE:RTC) is an AIM-listed recruitment and outsourcing business providing both temporary and permanent white- and blue-collar labour across UK and international markets. Through its brands Ganymede and ATA Recruitment, the group serves industries including rail, energy and utilities, manufacturing and engineering, water, transportation, highways and construction. Its international division, GSS, supports engineering and infrastructure projects in complex global locations. The company is headquartered at the Derby Conference Centre, which also generates conferencing, rental and office accommodation income for the group.
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