Broker Network (BN), whose shares have almost doubled since Growth Company Investor recommended them in October at 189.5p, is worth looking at in a different light ahead of September’s results for the year to April and growing institutional support.

The last update from management revealed strong trading during the 12 months in question and new broker Cenkos, appointed in March, has upgraded its forecasts for 2007 to £22.6m revenues, £6.3m pre-tax profits and earnings of 29.9p per share.

BN recently improved terms with its insurers for the premium it buys in bulk for its network of brokers and its own ‘retail’ division. This means, from each £1 of premium the brokers now get 15.3p instead of 15p and BN skims 2.9p instead of 2.5p. With the insurance sector experiencing a ‘soft market', chief executive Grant Ellis has secured long three-to-five-year contracts with insurers on these improved terms.

More problematic have been acquisitions of new brokers for the BN stable – there have been none since July last year. But, after a period of stalling in the market, brokers are becoming increasingly sold on the excellent terms BN offers.

Ellis’s expectations are for around ‘four, five or six’ acquisitions a year and he is currently in discussions with 15 ‘interested’ parties, adamant ‘there is still a huge amount of consolidation to be done in the market’ and pointing to recent purchases of smaller brokers by two big French insurers, AXA and Groupama.

With earnings forecast to grow steadily to over 40p by 2009, the shares continue to look good value and should become more stable in coming months as management corrals further institutional support. BlackRock and Fidelity have recently joined the register with JPMorgan and Hargreave Hale having topped up existing holdings. Now could be an opportune time to join them.