Regional public relations group Freshwater has joined AIM with a £3.5m kitty that founder Steve Howell looks forward to spending on ‘two to four acquisitions in the next nine months’.

Freshwater, which last year grew fee income 87% to £3.1m and pre-tax profits 88% to £0.5m, has completed seven acquisitions in the past three years, growing from its small Welsh beginnings to a 250-client group with agencies in Scotland and much of England. As well as its ‘regional network’, it has developed technology, healthcare and consumer sector specialities.

Former BBC journalist Howell says the company’s ability to offer clients a combination of sector speciality as well as a regional presence in England, Scotland and Wales is virtually unique. This approach recently won contracts to represent John Lewis in its regional store opening roll-out and for a roadshow with the Department for Business, Enterprise and Regulatory Reform (the new DTI).

To extend the net even wider, Freshwater will use its new cash and equity to keep the acquisitive drive going. Howell is ‘zeroing in on four’ targets and hopes to complete the first one ‘before Christmas’. Two of these would bring new ‘specialisms’ to the group, with Howell confessing he would like to steer the group into financial PR and lobbying.

From the current business, house broker Charles Stanley forecasts a doubling in pre-tax profits to £1m for the current year. Results are out on 10 December.

PR is a cyclical industry on an upward swing (PR Week calculated growth at 16% last year). Freshwater offers exposure to this plus the prospect of fast acquisitive growth. The shares, already 14% ahead of their issue price, could advance further. Buy.