OpSec

Growth Company Investor recommendation OpSec – the anti-counterfeiting counter backed at 42.5p earlier this year when known as Applied Optical Technologies – merits closer investor inspection ahead of forthcoming half time figures to September.

Last year proved a watershed, with the company moving into the black with a £1.7m full year profit scored on £25.4m sales, under the stewardship of chief executive Mark Turnage.

And quite simply, the company continues to go great guns. A recent pre-close update, ahead of the interims, boasted that figures for the year to March would be ‘significantly’ ahead of forecasts. The European operations have performed strongly, and the interims will show dramatic improvement year-on-year. And though the American operations experienced a slow first quarter, business picked up markedly in the second quarter.

Turnage is clearly delighted with June acquisition GenuOne, bought for £7m in cash, which provides anti-counterfeiting software that allows brand owners to monitor and protect their products and brands across auction sites like eBay. Fundamentally important to the brand protection business, the acquisition has created a unique company ‘able to meet the needs of global brand owners in both the online and supply chain environments’.

3dcd, the group’s 50-50 joint venture with Technicolor, also had a remarkable first half, with Microsoft’s imminent software launch having buoyed business. For March 2007, upgraded forecasts suggest pre-tax profits of £3.8m from approaching £31m sales, and earnings of 5.2p, placing the shares on a forward price-to-earnings multiple of 12.1. That is way too low for a cash-rich growth company with global brands on its client list. Buy.