Technology recruiter InterQuest's (ITQ) first-half results held some better news for investors. First of all, a strategy of refocusing the business on the higher-value-end of the market appears to be paying off and, secondly, there are signs that the UK economic backdrop is becoming more positive. The company reported a 21 per cent rise in trading profits to £1.3m, driven by an improvement in the net operating margin from 12.9 per cent to 15.3 per cent.
The better results were the fruit of the £674,000 charge incurred last year associated with streamlining and repositioning the company's operations. A strategic shift towards niche sectors of the technology market, where employers are looking to fill critical roles with very specific skill sets, offers higher margins for the recruiter. "We are moving up the value chain," says executive chairman Gary Ashworth.
Alongside these self-help measures, Mr Ashworth is also hopeful that an improving UK economy will provide a boost. He says that the recruiter has seen a pick-up in many of the sectors in which it operates during the first half and that, if this continues, InterQuest should be well-positioned to benefit.
Broker Charles Stanley expects full-year adjusted EPS of 4.73p, rising to 5.92p next year (from 3.85p in 2012).
INTERQUEST (ITQ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 83p | MARKET VALUE: | £27.6m | |
| TOUCH: | 80p-85p | 12-MONTH HIGH: | 90p | LOW:36p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 63 | |
| NET ASSET VALUE: | 59p* | NET DEBT: | 29% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 55.8 | 0.51 | 1.20 | 0.50 |
| 2013 | 56.2 | 1.24 | 2.90 | 0.50 |
| % change | +1 | +146 | +142 | - |
Ex-div: 18 Sep Payment: 25 Oct *Includes intangible assets of £14m, or 42p a share | ||||
