Gall & Eke likes the look of AIM-traded Mobile Doctors Group (MDG), which produces independent medical evidence for all major insurance companies and many personal injury law firms. Valued at £8.6 million on a 51.5p share price, it is benefiting from the rising number of personal injury claims in the UK requiring independent medical evidence reports (732,750 in 2007, up from 710,784 in 2006).

Results for 2007 revealed a swing from losses of £842,000 to pre-tax profits of £835,000 on a 22 per cent turnover rise. MDG, which has reduced costs by creating an outsourcing platform for back-office processes, has seen its sales grow by 33 per cent since 2005 and says it can grow by 32 per cent this year.

Ensured growth
Furthermore, the company has won new contracts with a firm of solicitors and ACM (part of the BGL Group, one of the UK’s largest personal insurance intermediaries) worth £10 million over the next two and a half years, offering opportunity for further organic growth.

Meanwhile, Gall & Eke says the £1.2 million acquisition of Medici Legal in December will be ‘the defining aspect’ in allowing MDG to take market share from the likes of Litcomp. Management has set a 25 per cent target to be reached by December 2008.

Noting that MDG trades on a modest earnings multiple, the broker says, ‘With strong leadership, further acquisitions and improvements to its operations, MDG will have the opportunity for rapid growth, making it an attractive option for investors in the current market climate.’