Companies: MCHL   

Support services star Mouchel Parkman, a long-term GCI favourite, powered home with excellent figures for the year to July. And all the signs suggest the good times will continue, with forward orders now amounting to a record £1.2bn on the back of the group’s excellent strike rate on contracts.

2006 saw significant advances in sales, profits and earnings from Mouchel Parkman, which delivers outsourced support services to clients in the public sector and industries such as highways, and regulated water and rail. Revenues were lifted 21% to £374m – organic top-line growth was £17% – and pre-tax profits surged 31% north to a record £27.4m, enabling chief executive Richard Cuthbert to hike dividends 23% to 4.05p. Cuthbert was also delighted with the increase in operating margins from 6.9% to 7.2%, creeping ever closer to the 8% target over the next three years.

Year-end balance sheet strength only adds to the investment allure, with the group closing the year with £33.4m in the bank and facilities of £100m in place, which means it can move speedily on acquisitions. Upgraded earnings for 2007 of 20.2p – based on profits of £31m and £410m sales – place the shares on a forward rating of 18.75.

Not particularly cheap, but we feel that is a multiple well worth paying given the group’s outstanding record and prospects, high earnings visibility and the ambitious Cuthbert's plan to grow the business to two or three times its current size by 2012.

Mouchel Group	LSE	£295.16m	262.75p	-10.25p
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