Companies: MXM   

Kelvin Harrison, chief executive of acquisitive IT services counter Maxima, is delighted to have fulfilled his initial promise to investors to create a company with £50m sales within three years.

Having completed four takeovers last year, Maxima then added Centric – ‘with high growth and margins and a big pipeline, it’s probably the best deal we’ve done yet’ – for less than four times prospective earnings in July. Thanks to this latter purchase, the company is projected to take its turnover to around £50m this year.

Harrison maintains that the acquisition means the company is ‘the only one in the mid-market with a complete offering’. This throws up numerous cross-selling opportunities to help squeeze even more organic growth than last year’s 8%.

Another result of the company’s increased scale can be seen in an impressive 71 new customer wins during the year to May, as revenues climbed 66% to £31.8m and pre-tax profits 76% to £5.8m. Confidence sky high as it is, the dividend is to be lifted 36% to 3.4p.

Net debt remains low at £6.6m so, against a backdrop of 6%-plus market growth, acquisitions remain eminently possible and Harrison claims a pipeline is ‘healthy’. Investments are also being made to capture more business in the booming construction sector to move existing clients over to ‘new solutions’.

Due to high levels of recurring revenues, forecasts of £10.3m of profit before tax and 31p of earnings from broker Arbuthnot look feasible. The shares, recommended by Growth Company Investor two years ago at 160p, trade for ten times forecast earnings and should continue to progress.

Maxima Holdings	AIM	£25.48m	101.50p	-1.00p
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Other company articles:
Maxima			12/08/2008
Directors’ Dealings			03/03/2008
Misstep from Maxima			08/02/2008
Maxima			05/02/2008
Maxima			28/01/2008