Public relations firm Freshwater, which came to AIM last summer with plans to strengthen its regional offering, has quickly made three acquisitions and, says chief executive Steve Howell, is ‘not finished yet’.

After arriving in July in a £4m IPO, the Cardiff-headquartered group has used a mixture of equity and cash to snap up Leeds-based PR firm Lynx in November, London- and Brussels-based public affairs specialist Waterfront in December, and Cardiff-based PR, marketing and design outfit Merlin in January. Howell’s priority is ‘to first integrate these businesses and to generate organic growth, then before its August year-end, do one or two more acquisitions in the regions'.

After that, Howell would like to turn attention to adding another ‘specialism’ to the business, specifically financial PR. His broad objective is to have a full-service offering ‘to challenge the American-owned groups’ but with the stronger regional focus that has won existing clients like John Lewis.

Of the recent additions, Merlin’s design and digital marketing capabilities are key as this booming area should enable much cross-selling across the 400-deep group client list. ‘Combined selling’ is the term Howell prefers, and it has already seen Freshwater win contracts that unite its marketing, website design and PR offering.

Business is ticking over nicely and, despite wider economic worries, Howell maintains that ‘we’ve not seen our market slacken off’. This is doubtless due to the regional focus, which also means Freshwater enjoys especially high margins. For the current year to August, house broker Charles Stanley is looking for a 78% increase in pre-tax profits to £1.6m and earnings of 8.5p. Freshwater is going from ‘strength to strength’, and the shares offer reasonable value on historic and prospective p/e ratios of below ten.

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