Mobile convergence group 2ergo has exceeded expectations – for the sixth year in a row.

Speaking to Growth Company Investor, which originally backed 2ergo at 120.5p, joint managing director Neale Graham admitted the company was ‘getting towards where we want to be’ – but intends no let up yet. For the year to August, profits before tax and amortisation fizzed up 80 per cent to £2.9m as revenues advanced 28 per cent to £29.5m. Graham points out that as clients increasingly look for ‘end-to-end solutions’ the company is enjoying ‘no pressure’ on margins, which is expected to grow 21.5 per cent in 2007.

Going forward, two recent acquisitions reinforce the product offering, broaden the geographical coverage and introduce new relationships.

Manchester University spinout VICS has enhanced the current video offering with ‘cutting edge’ technology that will allow 2ergo to deliver film clips to any mobile phone device. And just after the year-end, 2ergo acquired New York-based Proteus, for its strong technical team, innovative technology, and good relationships with US clients such as Disney and Fox. Proteus provides similar services to 2ergo, making synergies easy, but Graham reminds that the US market should ‘really start to ramp up now’.

House broker Numis has increasing 2007 adjusted profits forecasts to £3.8 million, dragging up earnings per share by 11.8 per cent to 10p. For 2008 profits of £4.5 million are expected to produce 11.9p of earnings.

However, what is not factored into these forecasts are 2ergo’s plan to spin out its 2safeguard proposition, a ‘potential industry standard’ according to Graham, whose technology ‘will completely enable m-commerce’ by turning phones into mobile chip and pin devices. Full details will be released in the next few weeks.

Potential rewards at 2ergo remain considerable and the shares are worth holding.