Growth Company Investor profiled Claimar, the provider of domiciliary care services to local authorities throughout the Midlands and the North West, as a strong buy at 76.5p.

Chief executive Mark Hales has buoyed our spirits with strong maiden results for the year to September, following an oversubscribed flotation on AIM in January, with 61% earnings growth to 4.78p scored on a 61% sales surge to £13.2m, boosted by acquisitions. Hales highlighted good organic growth from new contract wins.

Three acquisitions were completed by the deal-hungry group last year, and another three businesses have been bought since the year-end, of which the most interesting is franchised business SureCare, which could supply a stream of further acquisition opportunities down the track. ‘We like a high volume of acquisitions’, explains Hales, ‘because we are able to integrate them very efficiently’.

Operating profits powered north by 89% to £1.44m, even after infrastructure investment to ensure further growth, and gross margins edged up to 37.6% (36.9%), as fee increases from local authorities stayed ahead of wage inflation.

Local Authority clients are experiencing ‘extreme budgetary pressures’, yet Hales only sees opportunity, since clients are increasing the amount of work outsourced, and are also looking for fewer, larger providers at tender. 95% of revenues are wrought from long-term deals with local authorities, giving great visibility for investors, and ‘we now have 31 local authority clients, with the biggest accounting for only 7.7% of revenues’, adds Hales.

Shares in Claimar, trading above the issue price and now income yielding, are not to be sold. Add.