Empresaria Group

Diversified recruiter Empresaria’s approach minimises the risk to its overall business from a downturn in a particular sector or country, with the company supplying recruitment to a number of distinct markets including financial services, supply chain, construction, property services and engineering, as well as the public sector, among others.

In line with the increasing trend for casual labour in employment markets around the world, the group is growing the proportion of net fee income that it gets from temporary staffing. In the first half of 2007 this was 62 per cent, compared with 52 per cent in the same period of 2006.

In a confident trading update released in February, the company revealed that revenues and net fee income for 2007 were almost double those achieved in 2006, while profits for the year would be in line with market expectations. The statement also revealed that the majority of net fee income was now being generated overseas, compared with just 33 per cent in the first half of its 2007 financial year – fitting well with the group’s diversification strategy. In addition, the company flagged up a good start to 2008, with trading in January ahead of management expectations.

When the company issues final results in April, earnings per share is expected to come in at just over 9p, while the market predicts an increase in earnings to 12p for the current year. On those numbers, the shares are trading on less than eight times expected 2008 earnings, despite 30% forecast earnings growth this year. A fairly recent purchase of 500,000 shares at 82p per share by chairman Tony Martin, as well as a bout of institutional buying, augurs well for prospects in the medium to long term. Buy.

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