Founded in 2007, Management Resource Solutions (MRS) is an Australia based human capital resource consultancy and project management service provider. The company listed on AIM in December 2014 with a remit to expand the business via targeted strategic acquisitions.
MRS’s traditional business has been the supply of specialist and highly skilled personnel for the delivery of clients’ engineering projects. This is complimented by a growing project management business which provides clients with a fully managed service in areas including engineering design, procurement, fabrication, site construction and commissioning.
In January 2016, MRS finalised the A$13.4 million reverse takeover of earthworks specialist Bachmann Plant Hire. The deal, completed at a discount to net assets, more than doubled the size of the business in revenue terms and was immediately earnings enhancing.
By 30th September 2016 MRS expects to complete the acquisition of certain assets from mining services business SubZero Group. Upon completion, the enlarged business will have pro-forma annual revenues of approaching A$80 million, representing an eight-fold increase in the size of the business since 2014.
Comparing MRS to select ASX listed peers on an EV/EBITDA basis gives our fair value June 2017 target price of 25p per share. We initiate coverage of MRS with a Conviction buy stance.