IT recruiter InterQuest (ITQ) left larger rival SThree (STHR) in the dust with these results. While SThree's net fees and profits went backwards last year, InterQuest pulled off a solid performance, with net fee income rising 6 per cent to £17.4m. That and a 60 basis-point improvement in the gross profit margin lifted underlying cash profits by more than a third to £2.5m.
InterQuest puts its strong performance down to a strategy of focusing on specialist disciplines in niche segments of the technology jobs sector, rather than chasing the mass market. Last November's acquisition of ECOM, the UK's leading digital technology recruitment business, for a total consideration of up to £7m dovetails neatly with this niche strategy. And InterQuest says it is already seeing the benefits of broadcasting ECOM's list of digitally-skilled candidates to customers.
Looking ahead, the group says improving sentiment in contract recruitment, which makes up just over two-thirds of its net fee income, has carried on into the current year. Permanent recruitment is lagging the contract market somewhat, but InterQuest says signs are emerging that it will follow the contract sector up. Broker Charles Stanley nudged up its 2014 adjusted pre-tax profit forecast by 3 per cent to £3.8m to reflect an earnings beat last year, giving earnings per share of 8.2p (4.6p in 2013).
INTERQUEST (ITQ ) | ||||
|---|---|---|---|---|
| ORD PRICE: | 104p | MARKET VALUE: | £35.2m | |
| TOUCH: | 102-105p | 12-MONTH HIGH: | 105p | LOW: 54p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 36 | |
| NET ASSET VALUE: | 60p* | NET DEBT: | 44% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 97 | 1.8 | 4.4 | 2 |
| 2010 | 112 | 2.2 | 6.1 | 2.5 |
| 2011 | 121 | -0.2 | -3.4 | 2.5 |
| 2012 | 113 | -0.4 | -0.4 | 2.5 |
| 2013 | 115 | 1.4 | 2.9 | 2.5 |
| % change | +2 | - | - | - |
Ex-div: 19 Mar Payment: 17 Apr *Includes intangible assets of £20.6m, or 60p a share | ||||
