25 May 2012

£9m turnaround at Servoca

26/01/2010 Robert Tyerman

Health and education staff recruiter Servoca is considering new sectors after turning £7.2 million annual losses into £2.2 million pre-tax profits.

The AIM-quoted company, which provides temporary ‘locum’ staff for hospitals, schools and related concerns, as well as corporate security and investigation personnel for British Airways and others, lifted turnover 37 per cent to £57.6 million in the year to September. London-based Servoca cut net debt from £7.5 million to £3.4 million, increased cash 45 per cent to £3.3 million and hints there are a few more savings to come.

Chief executive officer Andy Church, who previously turned round IT recruitment group Lorian Resources and was brought in to Servoca by chairman Bob Morton, has restructured a clutch of businesses whose markets were basically sound but which previous management had saddled with debt and other impediments. Morton, a serial activist investor in smaller companies with recovery potential, holds nearly 55 per cent of Servoca, which Church says is starting a general practitioner locum service and considering moving into the pharmaceutical sector.

Analysts suggest the company could lift pre-tax profits 22.5 per cent this year to £2.7 million on turnover up 10.3 per cent to £64 million, for earnings of 2.1p a share. At 17.5p, against a 12-month low of 9p and a 23.5p high, the shares value the company at £29 million and offer scope for further potential gains.    

Tags: AIM, Growth Stocks, Turnaround

Sector: Support Services

Companies: Servoca

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