Jelf

‘We are in a cottage industry that is consolidating due to regulation,’ enthused Alex Alway, chief executive of acquisitive corporate and financial consultancy Jelf, one of Growth Company Investor’s best-performing recommendations from last year.

Wales and Southern England-focused Jelf, backed at 135p, delivered a 148% pre-tax profits surge to £3.3m for a year to September in which six acquisitions were completed, on turnover more than doubled to £25.1m. Acquisitions delivered £9.1m of the £13.6m sales rise, although growth also reflected new client wins and healthy levels of cross-selling. Despite all this investment, Jelf delivered a tidy 17% operating margin climb to 13.1%.

Alway announced 175% revenue growth within the insurance business, which provides commercial insurance broking services to corporate clients and now represents 42% of sales, with acquisitions including Goss (the company’s biggest acquisition last year) enhancing the performance.

Healthcare, entailing the provision of advice on matters such as private medical insurance, posted 20% sales growth thanks to new corporate client mandates, while the employee benefits division, ‘a real hot spot for us with employers looking to get more bang for their buck’, enjoyed a 190% revenue rise. In addition, Alway flagged up excellent 99% growth within the wealth management arm, with business boosted by the A-Day pensions legislation and the introduction of Jelf’s own branded SIPP.

Alongside the results, Alway announced the £10m acquisition of specialist healthcare intermediary SPS WellBeing, ‘a business with 2,000-plus corporate accounts’ into which Jelf can cross-sell services.

For 2007, analysts are looking for profits of £5.9m and 16.8p of earnings, placing Jelf on a forward p/e of less than 15 – inexpensive given that earnings should grow by at least 35% this year. Readers who followed our advice are already sitting on super gains, and might consider topping up holdings. Add.