Charles Taylor (CTR) offers the combination of solid growth prospects from its management services and insurance support services business, which accounted for 84 per cent of first half profit, along with recovery potential from its adjusting services operation, and the promise of acquisition-led growth. But despite these attractions, the shares trade at just 12 times forecast next 12-month earnings. We think a re-rating is due and the attractive dividend yield means investors will be well paid to wait.
- Diversified revenue stream
- Strong growth in insurance support services
- Low rating
- Acquisition growth potential
- Headwinds from adjusting market
- Investment-related costs
Charles Taylor has spent the past three years expanding its range of products and services and moving into new regions. This has paid off for the insurance services specialist, with pre-tax profit growing by almost half between 2012 and the end of last year.