Penna Consulting

After a fourfold interim profits increase, outplacement and recruiting specialist Penna Consulting expects ‘continuing growth’ in ‘scale and profitability’.

Penna, Britain’s market leader in ‘career transition’ (helping companies advise staff facing redundancy or other issues), lifted pre-tax profits from £517,000 to £2.1m in the six months to September – £170,000 more than for the whole of the previous year – on turnover up 29 per cent to £28.9m. The London-based company, which recently finished a large restructuring and downsizing job at music group EMI and undertakes hefty long-term public sector relocation contracts, quadrupled first-half earnings to 6p a share and is paying an interim dividend of 2p a share, against nothing last time.

AIM-quoted Penna ended its first six months with cash more than doubled to £5.1m. Chief executive Gary Browning argues that the company has ‘no capacity limitations and can scale up’ to take advantage of opportunities.

He contends that the company, which also has four offices on the continent and a thriving US partnership, is able to benefit counter-cyclically through career transition and outsourcing. But he points to other strengths, in areas such as consulting and coaching, which should come into their own during an eventual economic upturn and suggests that, while Penna is not targeting acquisitions in career transition just now, it might consider other areas.

The company’s new broker, Collins Stewart, reckons that Penna could more than double pre-tax profits in the year to next March to £4.3m, with full-year earnings up 120 per cent to 12.1p a share. Floated two years ago at 70p and recently highlighted by Growth Company Investor at 135p, the shares have now reached 157.5p.

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