Key Highlights

  • RTC Group plc (LSE:RTC) offers a Dividend Yield of 7.06%.
  • Total dividends for 2025 rose 10% to 6.71 pence per share, including a final dividend of 5.5 pence.
  • The Interim Dividend for 2026 was maintained at 1.21 pence and paid on 2 October 2026.
  • The group has no term Debt and held cash of £3.8 million at 30 June 2026.

Business Overview

RTC Group plc (LSE:RTC) is an AIM-quoted engineering and technical recruitment group that supplies temporary and permanent labour to industries in the UK and overseas. It operates through the Ganymede, ATA Recruitment and GSS brands, with particular exposure to rail, infrastructure and energy.

The shares offer a dividend yield of 7.06%, a notable figure for a company with a Market Value of only around £12 million. The yield reflects a generous dividend policy alongside a share price that has been held back by weak conditions in UK recruitment.

Dividend Growth Record

RTC has delivered consistent dividend growth in recent years. For 2025, the board proposed a final dividend of 5.5 pence per share, up from 5.0 pence, taking the full-year payout to 6.71 pence, a 10% increase on 6.10 pence for 2024. The final was approved at the AGM on 27 May 2026 and paid on 26 June 2026. The total cost of the 2025 dividend was £842,387.

For 2026, the directors proposed an interim dividend of 1.21 pence per share, unchanged from the prior year. It was paid on 2 October 2026 to shareholders on the register on 4 September 2026. Holding the interim flat rather than raising it is a measured response to softer trading. It also preserves the progressive pattern established over the past two years, because the board avoided a cut despite lower first-half revenue, a choice that income investors tend to value highly in smaller companies.

Earnings and Payout Cover

The 2025 results provide a solid base. Profit from operations was maintained at £2.5 million and EBITDA at £3.3 million despite rising employment costs, particularly higher national insurance contributions. Fully diluted Earnings per share increased to 14.10 pence from 13.01 pence. Against that, the 6.71 pence dividend represents a Payout Ratio of roughly 48%, which leaves meaningful headroom.

Revenue from continuing operations eased slightly to £95.5 million from £96.8 million, showing that Margin discipline rather than Volume drove profit.

First-Half 2026 Trading

Conditions became tougher in 2026. Revenue from continuing operations for the six months to 30 June 2026 fell to £45.2 million from £48.3 million, although the gross margin held at 18.3%. Management expects difficult conditions to continue through the rest of 2026 but plans to retain consultant headcount so the Business is positioned to benefit from a potential recovery in 2027.

Commercial momentum has not stalled. RTC secured six major contract wins and extensions in the first half, including four in rail and infrastructure and two in energy, and reported a healthy order book across several sectors.

Cash Flow and Balance Sheet

The Balance Sheet supports the dividend. RTC reported cash and cash equivalents of £3.8 million at 30 June 2026, almost unchanged from £3.9 million at the end of 2025, even after paying around £0.7 million in dividends during the period. Net Assets stood at £8.0 million and the group has no term debt.

For a staffing business, Working Capital needs can swing with activity levels. Lower revenue typically releases working capital, which can support cash during downturns, while recovery can absorb cash. The current cash position covers several years of dividends at the existing rate.

Risks to Watch

The primary risk is a prolonged slowdown in UK hiring, especially in infrastructure and energy projects that drive Demand for technical staff. Cost inflation, including employer national insurance and wage pressures, can squeeze margins. As a small company, RTC also depends on a limited number of large contracts, and the loss of a key client would weigh on profit.

Is the Dividend Sustainable?

RTC Group plc (LSE:RTC) enters the second half with a cash-backed balance sheet, no term debt and a payout ratio under 50% based on 2025 earnings. The decision to keep the interim at 1.21 pence rather than increase it signals caution, and full-year profits for 2026 are likely to be lower. Even so, the dividend appears sustainable at current levels, supported by cash reserves and contract wins. Further growth will depend on the expected recovery in 2027, making the 7.06% yield attractive but tied to the recruitment cycle.