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ASOS, the online fashion retailer, is easily our best stock of 2004. Recommended at 7p in February, the innovative group is now trading at 42p, an improvement of 500 per cent in a mere six months.

The group will release its preliminary full year figures on 30 June, figures which will cover the 15 months to March. The company stated back in April that pre-tax profits before amortisation of goodwill will be no less than £570,000. Interestingly, house broker Seymour Pierce previously upgraded its profit forecast (not for the first time) to £400,000 and had to upgrade once more to keep up with the progress made. And there has been much progress. Chief executive Nick Robertson has recently been on a hiring spree. In March, he recruited two new buyers, who were previously with discount fashion retailer TK Maxx and department store operator Bentalls, to focus purely on menswear. This was followed by two senior appointments, Jonathan Jones, the ex-marketing director for online music retailer CD Wow, and Kate Davies, previously of global fashion jewellery retailer DCK Concessions.

Following the 2004 results, Seymour Pierce expects 2005 pre-tax profits to leap to £1.3 million giving an EPS of 1.9p. The prospective p/e of 22.4 therefore looks rather full, although the potential for the group to outperform is very high. If you haven't yet taken profits at this venture, its time to do so.

Profits roll in at Erinaceous

Property services play Erinaceous, recommended in April's Growth Company Investor at 130p, stormed in with terrific maiden preliminary numbers to March, producing a 71 per cent leap in earnings.

During a year of considerable corporate activity, adjusted pre-tax profits rose 52 per cent to £6 million on increased turnover of £42.2 million (£33.7 million) and pre-tax profits rocketed 95 per cent higher to £4.3 million. Basic EPS rose 71 per cent to 7.2p.

Erinaceous, which floated last November, raising £9 million of new money at 130p a share, enjoyed rising turnover and profits in all three trading divisions. The major profits growth came from its residential lettings business. There was a lower growth rate in property services, which reflected continued investment in the division's infrastructure, and that bodes very well for the future.

The flotation money and the sale of surplus properties after the move to Phoenix House in Croydon, left the group with £6.8 million cash at the year-end. However, in May Erinaceous announced its first major acquisition, the £10 million purchase of ISG Occupancy, a division of fellow AIM venture Interior Services. This was followed up swiftly with the acquisition, for £2.8 million, of North West residential letting and property management business Jordans, which has sales of £2.3 million. Erinaceous has been working closely with Jordans and the deal should help develop its growing residential lettings services division. We remain fans. Keep buying.

CRC still profitable

CRC has not quite ridden out the crisis that beset the company in 2003 when its major client, Nokia, brought in-house a large proportion of the business it had outsourced to CRC. Although it continues to provide repair work for Nokia handsets in Germany, Poland, the UK and now Austria, turnover is still being impacted, falling 35 per cent to £71.2 million in 2003. Throughout the restructuring, however, which saw the closure of operations in Rugby and Ireland, the company has remained profitable, making £3.7 million at the pre-tax level. Focusing now on generating revenues from the IT and home markets, which should represent 46 per cent and 18 per cent of turnover going forward, with mobile repair sales falling from two thirds of revenue to 36 per cent, CRC has made good progress as turnover from these divisions has already grown 24 per cent.

This was bolstered by three strategic acquisitions in 2003 – the Repair Centre of Siemens Business Services, Wincor Nixdorf Engineering centre (both in Germany) and ADP Technical Services, a UK-based laptop repairer. The two former companies have ongoing three-year contracts and together with a one year contract with Fujitsu Siemens Computers, represent sales of £55 million. Broker Charles Stanley reckons pre-tax profits this year will rise to £5.4 million. An EPS of 18p provides a forward p/e of 8.7 – cheap compared to the sector average of 34.6. Hold/buy.

Park making amends

We first recommended Park Group, the low key savings and loans business, back in July 2002 at 22.5p. We reckoned at the time that, despite the fact that not everything in its financial garden was rosy, there were compelling reasons to back the stock.

Last year we reiterated our view that the group was not to be sold, and if you took our advice, you will no doubt welcome the rise in the shares to 29.5p.

Park has risen to this level because it continues to finely tune its business. During the past year Park has sold its poorly performing assets – a call centre in Birkenhead and a design and packing operation in Chesterfield. This means it can now concentrate on its core business, of collecting cash from savers putting money aside for Christmas gifts and lending out this cash, on an unsecured basis, to other customers.

In the year to March, profits before tax at the continuing business improved 28.8 per cent to £5 million on turnover up 15.7 per cent to £210.1 million. However, the two businesses that have been sold produced a £3.1 million loss on sales down 44 per cent to £6.9 million. This meant overall pre-tax profits last year dropped 39 per cent to £1.9 million.

Veteran chairman Peter Johnson showed faith in the business going forward by lifting the dividend by a third to 1p a share. Last year the number of savers, who originally put money aside for food hampers but now mostly buy High Street shopping vouchers, went up 7.7 per cent to 490,000. And in the current year orders placed are up 9.4 per cent to £172 million.

The lending side is growing more quickly. Turnover rose 56.5 per cent last year to £14 milion, helped by the acquisition of a Leeds-based operator. Johnson wants to make other acquisitions and is targeting South Wales in particular.

New house broker Shore Capital predicts a £5.4 million pre-tax profit in the current year, producing earnings of 2.3p per share. This puts the stock on a p/e of 13, which is not expensive for a solid cash-rich business.

Creston leaps ahead

Marketing services play Creston scored a 130 per cent profits leap for the year to March, topping forecasts from broker Charles Stanley. Pre-tax profits jumped to £2.1 million, ahead of the £2 million forecast, on a 58 per cent sales hike to £29.5 million, with each subsidiary performing well in tough markets. Margins were aided by Nelson Bostock Communications, the public relations firm acquired in October, and the withdrawal from lower- margin printing work at its TRA and EMO businesses.

The MSL division outperformed the market research sector with revenues rising by 16 per cent. It is seeing good demand from the likes of Tesco and Unilever, and has added clients including Carlsberg Global, Danone and L'Oreal. TRA delivered 18 per cent growth and has won new work from Stanley Leisure, Kerry Foods and Mates Condoms.

Analyst Ben Archer has modestly upgraded his forecasts for 2005, but these ignore potential acquisitions. He suggests profits of £3.1 million, earnings of 9.5p and a 2p dividend. On a forward p/e of 15.8, the shares aren't cheap but Creston deserves the rating after this, its third consecutive set of record results. Chief executive Don Elgie believes 2004 is the first year of marketing upturn and the company is successfully cross-selling its services. Those who bought at the GCI recommendation price of 57.5p back in July 2002 should keep holding.

Majestic as ever

Wine retailer Majestic has once again enjoyed a vintage year, with pre-tax profits rising 34 per cent to £10.6 million in the 12 months to March. Turnover increased 18 per cent to £148.3 million and like-for-like UK sales were up ten per cent.

During the year, the company saw the number of customers on its database who made purchases in the last 12 months increase 10.5 per cent to 325,000. Average spend per bottle rose 10p to 540p, 36 per cent above the market average, and average spend per transaction was lifted three per cent to £107.

Ten new stores were opened, making a total of 114, including one in St John's Wood, London, which contains a temperature-controlled fine wine centre. Eight further stores are expected to open this year and chief executive Tim How envisages enlarging Majestic to 175 stores in the next six years.

The three French stores, under the Wine and Beer World brand, achieved 11.9 per cent sales growth. Due to its increasing size, How explained that the company is in a good position to purchase one-off parcels of wine at great rates.

Like-for-like sales in the first ten weeks of the current year are eight per cent up. The cash position is a healthy £4.4 million. The total dividend was increased 50 per cent to 16.5p and a 4:1 share split has been proposed to improve market liquidity and encourage retail investors.

First recommended at 365p in December 2001, we suggested in July last year that investors top-slice their gains at 631p and leave a sufficient stake in the business to take advantage of further uplifts in the price. The shares are now at 942p. Top-slice again.

Capcon – still a buy

Capcon, a Growth Company Investor recommendation at 63.5p last year, has delivered strong interims to the end of March. The investigations and risk management outfit, chaired by Ken Dulieu, reported a 51.3 per cent jump in profits before interest, tax and goodwill to £306,000. Meanwhile, profit before tax leapt from £33,700 to £114,200. Turnover moved 11.5 per cent higher to £3.7 million, and gross profits perked up 25 per cent to £1.7 million. Capcon continued to generate cash, paring half-time net debt by £412,200 to £1.1 million.

VSA, the insurance investigator acquired in 2002, upped its performance, lifting both sales and profits. And the first-half figures also felt the full six month effect of Argen, the signif-

icantly higher-margin investigations business bought in February 2003. Argen is receiving instructions for high- margin assignments from multinationals – these margins reflect the sensitive nature of the projects and the rising awareness of the damage done to corporates by serious fraud.

Capcon's acquisitions to date have been integrated well, and an earnings-enhancing deal, most likely on the investigations side of the business, is a high second-half priority. For the full year, house broker Williams de Broe suggests profits of £640,000 on sales of £8.25 million, giving earnings of 5.57p a share. A forward rating of 8.5 times looks way too low. Now is a ripe time to buy.

Kewill back in the black

Supply chain software and services play Kewill Systems has returned to profits for the first time in three years, despite tough markets in the US and Europe. Kewill, which is keeping a tight reign on costs, cautiously says its recovery remains at an early stage, and chief executive Paul Nichols says order pipelines are looking better.

For the year to March, losses of £6 million were converted into pre-tax profits of £1.5 million. The continuing turnover of £20.4 million was lower than last year's £21.7 million on account of the flailing US dollar. Kewill derives more than 50 per cent of its sales from the US, where it sells shipping-management software.

In the UK, where Kewill concentrates on order-management software, the company extended its market leading position in retail with a number of contract wins. Trade Point, an international trade management venture bought last December, contributed eight per cent of the full year revenues, and should account for 26 per cent of the top line this year.

House broker Arbuthnot downgraded its sales estimates for the current year to £28.2 million due to dollar weakness, but upgraded pre-tax profit forecasts from £2.5 million to £3 million, translating into earnings of 3.8p. This gives a forward p/e of 17.2, which is roughly in line with its peers. We recommended the shares in December 2003 at 57p and they now trade at 68p. If you're in, hold firm.