Morson Group

Manchester-based recruiter Morson has increased its share of the marine and rail markets through the canny acquisition of Acetech Personnel.

Morson, the UK provider of more than 9,000 skilled white-collar workers to sectors including aerospace and defence, power and rail, has acquired Acetech, the in-house recruitment arm of Babcock International, for £2.35m in cash.

Significantly, Acetech provides staff on a preferred supplier basis to the UK marine and rail businesses of (former) parent Babcock and Morson has inked contracts for a minimum five-years of continued supply. Strengthening Morson's ties to Babcock, the acquisition further underpins forecasts and improves its positioning ahead of eventual upturn.

Guided by no-nonsense CEO Ged Mason, Morson has performed robustly throughout the recession, drawing strength from the relative greater resilience of sectors it serves as well as excellent earnings visibility stemming from staff provision to long-term infrastructure and defence projects. These range from Olympic Games-related construction initiatives to rail upgrades and maintenance work to nuclear decommissioning.

Pre-tax profits pushed 22.5% higher to £9.7m in a challenging 2009, on revenues of £436.6m (2008: £431.4m) and the strongly cash-generative concern maintained annual dividends at 6p.

First backed by Growth Company Investor at 143.5p in 2008, Morson shares still represent good value. They trade on a miserly and unmerited single figure forward p/e, offer a 6.5% yield and inhabit strong buy territory.