After a surprise profits warning earlier this year, training group ILX – first backed by GCI at 117p – has got its work cut out to rebuild investor confidence. Near-doubled profits on a 40% revenue rise for the half to September is a great start.

Pre-tax profits increased 93% to £980,000, on turnover up 40% to £6.26m, which was buoyed by a first full six-month turn from 2006 acquisition Corporate Training Group (CTG). ILX provides business training to public and private sector clients and has made six acquisitions since February 2004. Following a restructuring bout, the company is organised into two divisions, Best Practice, and banking and finance through CTG, which sports most global investment banks as clients. Growing fast and with exceptionally strong bookings into 2008, CTG is on course for another record year and reports no credit crunch-inspired signs of flagging demand for banking sector training.

The restructuring of the Best Practice division, where acquisition-related indigestion and issues with the Mount Lane business caused ILX to disappoint at the full year, has been completed with annualised savings of £340,000. Best Practice has the traditionally stronger second half to come, new classroom training deals are kicking in, sales of the division’s desktop solutions products have recovered and e-learning sales are showing good growth in both finance and project management qualification PRINCE2.

For the year to March, analysts predict a rise in profits to £2m (£1.5m) and earnings of 6.98p (5.32p), placing ILX on a forward multiple of nine times. ILX has had a blip, but the shares look oversold and have recovery potential. If you have yet to sell out, sit tight.

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ILX Group	AIM	£4.46m	23.00p	0.00p
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