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Servoca has reported H1 sales up 19% and EPS up 29%. This has been driven by a strong performance across both outsourcing and recruitment divisions. Different parts of the group have come to the fore in H1. The group continues to achieve substantial growth and is benefitting from the diversification of the business mix. Each one of the markets in which the group operates has seen revenues increased over the same period last year. Servoca enters H2 with positive momentum benefiting from healthy growth opportunities, new contract wins, leaving the group well placed to deliver forecast expectations again. We make no changes to our full-year PBT/EPS forecasts given the significance of the pivotal September period for the group’s Education recruitment businesses.
Servoca Servoca
Full-year results showed double-digit YoY growth and were in line with expectations. The Healthcare operations were the main driving force behind the group’s growth in the mid-teens, with the group’s diversified business mix helping. We introduce new 2017 forecasts that point to a current year P/E of 8.5x, which we consider attractive.
Interim results showed considerable progress versus the prior interims across its recruitment business, resulting in improved margins and a decent reduction in debt. The results were accompanied by an upbeat outlook, with management confident of achieving FY market expectations. The shares have reduced from December peaks and therefore offer good value, with growth continuing as trading remains on track to achieve our expectations.
The group has announced a record set of results, with performance driven by the Education and Healthcare recruitment businesses. This resulted in profit for the group exceeding our adj. PBT forecast by £0.25m. A strong cash performance also saw net debt fall to £2.0m, despite paying the initial consideration of £0.8m for the acquisition of an Education bolt on. The shares remain attractive with strong momentum. We raise our target price to 37p and remain positive on the outlook for the shares.
Servoca
The group has posted a very strong start to the year, with a significant increase on the prior period. Management reports good momentum continuing into the second half. First-half results place the group in a strong position to achieve our slightly upgraded full-year forecasts.
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