Jelf Group

Shares in highly acquisitive ‘full-service’ brokerage Jelf have held up well in tumultuous markets, with investors continuing to warm to its fast-growing financials and takeovers in fragmented markets.

Providing an array of services to medium-sized owner-managed businesses, the South of England and Wales-focused company’s results for the year to September sparkled. Turnover increased by more than 60% to £40.6m, driven by acquisitions and new corporate client wins, while organic growth was encouraging at 16%, buoyed by cross-selling successes. EBITDA more than doubled to £7.2m and profits at the pre-tax line increased to £2.5m (2006: £2.1m).

During a busy year for acquisitions, 66% sales growth was seen in the commercial insurance broking operations, with stellar growth rates enjoyed within the employee benefits, healthcare and wealth management operations. Operating margins increased to 16.3% (12.9%) despite continued investment (margins have increased by more than 70% since the company floated on AIM in late 2004).

Accompanying the numbers were three further strategic acquisitions – Manchester-based Manson, Jelf's first purchase outside of Wales and Southern England, as well as Devon-based businesses BDB and CRM – and news of a highly significant £47m placing including a £26m investment from the fully listed 3i Quoted Private Equity for a 24.6% stake.

Trading on a (historic) earnings multiple of 14.5, Jelf now has extra firepower for deals and offers investors exposure to acquisitive growth, good levels of repeat business and healthy cash generation. Originally backed by Growth Company Investor at 135p, it is worth topping up holdings if you are able to do so.

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