November 2016 AIM Prospector

Page 1


Issue 17 November 2016

Covered in quality

AIM exporter supplying the monied few

*NINE* AIM firms featured including‌ Cambridge tech winner winning agriculture supplier low P/E car dealer recovering recruiter free to private investors

AIMprospector AIMprospector

Issue 17 November 2016

Covered in quality

AIM exporter supplying the monied few

*NINE* AIM firms featured including… Cambridge tech winner winning agriculture supplier low P/E car dealer recovering recruiter free to private investors

Welcome back to AIMprospector, the online publication from Blackthorn Focus.


Following the recent Blackthorn Focus AIM Investor Focus event, we have a bumper nine company edition, featuring the regular five companies plus the four AIM stocks that presented at the October AIM Investor Focus hosted by Edison Group.


Luxury homeware firm Colefax Group features as Top Pick this month. The company demonstrates what makes AIM so great: heritage, market position and shareholder returns. It is a long way from the type of company that the naysayers typically associate with AIM. AIM Investor Focus participants Orchard Funding Group, James Halstead, Next Fifteen Communications and Volvere all feature. Elsewhere, the end of an era was marked at Brooks Macdonald as it was announced that co-Founder, Chris Macdonald, would be stepping down from his Chief Executive role in April of next year. If you had to compile a list of the ten best companies on AIM you would have to consider Brooks Macdonald to be one of them. Brooks Macdonald joined AIM in 2005 at 140p per share. By the time that the final payment for 2015 was distributed, that 140p had been repaid to shareholders in dividends. Better still, the shares had reached ten times the IPO price by May of 2013. Brooks Macdonald has raised money from the markets just once since IPO. Full year results, announced in September showed a 39% increase in pre-tax profit and a 15% hike in the full year dividend payout. Mr Macdonald is one of the most successful entrepreneurs in AIM’s history. Incoming Chief Executive Caroline Connellan has some shoes to fill. Elsewhere, The Motley Fool (TMF) has recently announced the forthcoming closure of their longstanding UK discussion boards. This will have come as a disorienting jolt to many private investors across the UK. TMF was a significant learning resource for vast numbers of the UK’s most sophisticated private investors. In its heyday it was the number one free source of UK share discussion on the internet. Many of its most celebrated users have decamped to a community created alternative at Lemon Fool ( and I look forward to seeing if the best of the Motley Fool can successfully be recreated there.

Welcome ........................p2 Top Pick: Colefax...........p4 Anpario..........................p6 Executive Insight............p7 Marshall Motor Holdings..............p8 AIM Investor Focus........p9 Parity............................p11


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“Enjoy this AIM Prospector and good luck with your AIM endeavours.” David O’Hara, Editor, AIMprospector 2


Telematics firm Quartix all the boxes Cambridge-based fleet telematics firm Quartix is profitable, growing, has a net cash balance and pays a dividend. This puts the company among just 5% of all AIM-quoted firms. Quartix joined AIM via IPO in November 2014. Its subsequent performance and future prospects make the company one of the best to have joined AIM in the last decade. Quartix is led by its co-Founder and Managing Director, Andy Walters. Mr Walters remains a major shareholder in the company, controlling 37.7% of the equity. InfoPlus, Quartix’ main product is a combined hardware/software technology solution for motor fleet managers. The in-vehicle product weighs 90g. It is essentially a GPS tracking device, powered by the vehicle battery. Along with position reporting, the unit includes an accelerometer that can record impact data. Done properly, this amounts to a serious amount of computing and data processing. The full unit contains three ARM processors, one for the mobile network modem, one in the GPS receiver and another to serve the Quartix firmware. Quartix still has plenty of work to do once the vehicle unit has sent the data. Analysis of the information gathered enables Quartix to assess a myriad of aspects of a driver’s performance. Vehicle speed information at a specific location

can be combined with road data to measure if a driver is speeding. Time and location information are processed into timesheet entries. This can be combined across an entire fleet to aggregate business performance.

combined across an entire fleet to aggregate business performance Quartix’ solution is sold either to the companies running fleets themselves or to insurance companies, who may demand the installation of a Quartix (or similar) device as part of terms. Quartix’ subscriber base has increased more than sevenfold in the last ten years. In the last five years, the compound annual growth rate in sales has averaged 24%. Operating cash flows in this time have shown an average annual increase of 39% per annum. According to stock data site Stockopedia, only 23 AIM-quoted companies can demonstrate a similar level of growth and many have only done so via acquisition. Interim results, announced at the end of July, showed a 16% increase in sales to the fleet sector and a 47% increase in demand from insurers. It is the growth in the USA

growth in the USA that is perhaps most encouraging that is perhaps most encouraging. Here (albeit from a low base), the subscriber base doubled and revenues increased fourfold in 12 months. Legislation in the US had dampened demand for Quartix’ product somewhat but a compliant solution is expected to begin shipping in H2. An estimated 3.1m vehicles in the US will require monitoring by law. Given that Quartix’ current installed base is around 80,000 vehicles, the opportunity is huge. Quartix is a successful business controlled and managed by the smart people that started it. Provided that the technological position can be maintained, Quartix looks set to keep its status among AIM’s most successful firms. Quartix Holdings (LON:QTX) FOR Excellent growth Strong balance sheet AGAINST Competitive area Punchy valuation Market cap Bid:offer P/E (forecast) Yield (forecast) 52week low:high

£156m 325p:345p 27.7 3.2% 233p:475p




A design firm run for financials Established in 1934 by Sibyl Colefax and John Fowler, Colefax is a high-end interior design and products company. Colefax occupies a niche only accessible to a fraction of the world’s 1%. Colefax is a genuine luxury brand with a comprehensive track record of inducing a level of satisfaction similar among shareholders and customers. In 1986, today’s Chairman David Green acquired a 40% stake in Colefax. The business was subsequently listed on the London Stock Exchange in 1988. Today, the company comprises two divisions: products and interior design. In turn, the products division is divided between fabrics and furniture. The fabric division comprised 87% of group turnover in 2016. 58% of fabric sales were to US customers.

three times the price of B&Q’s most similar offering A premium price point is typical across the company. For example, a roll of ‘Colefax & Fowler’ wallpaper retails through John Lewis at around three times the price of B&Q’s most similar offering. The fabric division comprises five brands ‘Colefax and Fowler’ (traditional), ‘Jane Churchill’ (stylish modern), ‘Manuel Canovas’ (bright), ‘Larsen’ (contemporary) and ‘Cowtan and Tout’ (for the US). 4

The ‘Jane Churchill’ brand was acquired in 1989. ‘Larsen’ joined in 1997. French brand ‘Manuel Canovas’ was acquired in 1998 and is the company’s last acquisition.

significant operational gearing in the business All manufacturing is subcontracted to about 100 suppliers primarily in Italy, France, Belgium, the UK and India. This relieves the company of any requirement for capital tied up in manufacturing plant and machinery. Though Colefax has been previously acquisitive and retains the financial firepower to return to the acquisition trail, management’s current focus is on distribution, principally to trade customers. Management is committed to annual launches of new portfolios for the brands, inspiring further customer loyalty. Brand loyalty, combined with a high price point, results in a high gross margin. The company enjoyed a gross margin of 56.3% in 2015 and a pre-tax profit margin of 7%. There is significant operational gearing in the business.

Pricing across all products is super-premium

Top-line growth in recent years has been modest. Turnover has increased from £70.6m in 2012 to £76.9m in 2016 (the company has an April year end). Profit before tax in that time has increased from £3.1m in 2012 to £5.0m in 2016, with basic EPS increasing from 15.8p in 2012 to 32.2p. This led to the share price doubling, aided in part by significant share buybacks. Since 2000, the company has bought back 65% of its outstanding shares, helping to generate a capital return of around six times in the period, plus dividends. It is a challenge to find a company fully listed or on AIM that has executed a buyback strategy so effectively. £0.3m was spent buying

AIMprospector back shares in 2016, following £1.5m the year before. In May of this year another 500k shares were brought in, equating to just short of 5% of the share capital at that time. Dividends at the company have been increasing since 2009 and are now ahead of the level the last time that the payout was cut in 2008. The 2016 full year saw sales broadly unchanged at £76.88m. This resulted in pre-tax profit and earnings per share similarly flat at £5.02m and 32.2p respectively. Colefax is a conservatively run business and as of the last balance sheet date, net cash was reported ahead at £10.1m. However, tougher trading since the

TOPpick year end has led to a significant cut to 2017 earnings forecasts. The US (which the company describes as its major market) has seen softer trading, which Colefax attributes to the forthcoming election. Higher stamp duty in the UK has dampened high end property transactions at home.

four largest shareholders together account for 75% While the group earns around three quarters of its revenues overseas, exchange rates were recently hedged. A material currency windfall is expected in around two years’ time. Significant expenditure is slated for the current year, with new US

showrooms opening in Boston and Atlanta costing $850,000. Colefax is also relocating its decorating division to new premises on Pimlico Road, London. The new showrooms are expected to play an important role in sales at the company. Colefax’ luxury credentials place the company in the same bracket as Mulberry and Burberry. Brand strength and cache are a long lasting customer draw. The earnings forecasts for 2017 and 2018 suggest that the shares, like the product, are not cheap. However, Colefax is a longstanding success that continues to accumulate heritage, reputation and cash. The controlling Chief Executive and Chairman, David Green, is among the most senior at a quoted plc, at 71 years. Today he owns nearly 31% of the stock. The four largest shareholders together account for 75% of shares in issue. Any takeover would require the assent of a small number of individuals. The recent depreciation of the pound has made Colefax shares more affordable to a foreign buyer but the structure of the share register means that we will likely never hear of any such approach unless a price is agreed. Colefax Group (LON:CFX) FOR Recovering markets Coming currency tailwind AGAINST Hard to trade Single person control Market cap Bid:offer P/E (forecast) Yield (forecast)

Colefax acts as an interior decorator to the well-heeled

52week low:high

£49m 470p:490p 17.8 1.0% 443p:510p



Supplement provider’s larder is well stocked Quoted on AIM since 2010, Anpario is an “international producer and distributor of natural feed additives for animal health, hygiene and nutrition.”

The company’s history can be traced back to its birth in 1920. Since then, Anpario has established a collection of operations, targetting the international agriculture industry. The last five years have been characterised by strong growth in profitability despite a lack of significant sales growth. The improved profits have flowed through to strong dividend growth, with payments increased by an average of 20.1% a year in the last five years.

used by farmers around the world The company website carries the motto ‘enhancing nature through science’. This neatly sums up Anpario’s operation. Anpario’s additives are used by farmers around the world in the production of meat, fish and dairy. Products include acidifiers, enzymes and antioxidants. The end goal is to “optimize the performance of the animal”. Anpario trades through three brands: Kiotechagil, Meriden and OptiVite. 6

Anpario products increasingly relevant Anpario was admitted to AIM as Kiotech in 2000. The company then acquired Agil to form Kiotechagil in 2005. One example product is Bacta-cid, a pig acid/mineral compound that reduces bacterial output in faeces, thus reducing the risk of piglets acquiring infections from their mother’s environment.

result is greater absorption of nutrients Meriden produces Orego-Stim, a supplement brand that is reformulated for the aquatic, poultry, swine and ruminant industries along with the pigeon fancying community. The product acts as an appetite enhancer and improves intestinal health. The result is greater absorption of nutrients and enchanced yields. Formed in 1988 (and acquired by Anpario in 2009), OptiVite supplies a large range of antibacterial products, across a full range of species. The product range also includes water purifiers and disinfectants. Half-year results, announced in the middle of September, showed a 3% increase in gross profit. The cash balance increased by £3m to £10.9m with total liabilities amounting to £5.1m. Management highlighted the dairy opportunity in the USA that is being addressed by a recent product launch. A new regional office in Dubai

was also announced. Anpario remains on the lookout for acquisitions. Anpario is forecast to report normalised EPS of 16.0p for 2016, rising to 17.7p next year. Dividend growth is expected this year and next. If achieved, this would see Anpario reach ten consecutive years of dividend growth. Anpario is well-established, in a sector that will continue to be pushed to produce higher yields as global population growth drives demand. This powerful trend makes Anpario products increasingly relevant. Anpario is yet to capitalise on this, with moves in recent years being away from high volume lower margin product. The share price rating reflects the reliability of earnings. The company is well financed with a considerable track record of success. I conclude that Anpario is top quartile. Anpario (LON:ANP) FOR Long-term growth market Strong balance sheet AGAINST Lack of sales growth Competitive industry Market cap Bid:offer P/E (forecast) Yield (forecast) 52week low:high

£62m 275p:290p 16.4 2.1% 223p:375p


Executive Insight In this Executive Insight, David Smith of Druces LLP examines how the EU Market Abuse Regulation changes will likely force boards to more frequently consider the need to announce information to the market. David Smith, Druces LLP

The Market Abuse Regulation, or MAR, came into force across the EU on 3 July this year and has increased the regulatory burden on AIM companies. While there are areas of overlap with the AIM Rules for Companies, the purposes of the two regulatory regimes are different — while the AIM Rules are generally intended to preserve the integrity of the market, for example through prompt and accurate disclosure, MAR is fundamentally about the protection of investors. While AIM itself has the power to grant derogations from its own Rules, the FCA, which polices MAR compliance, has no such discretion. The different approaches and terminology are resulting in some interesting challenges to management and their advisers, as well as imposing an additional administrative burden on smaller companies whose resources are often already stretched. The key areas on which MAR compliance is having an impact are: public disclosure of inside information (and when disclosure can legitimately be deferred); when it is permissible to make selected private disclosure of inside information (“market soundings”); maintenance of insider lists, and disclosure of dealings by directors and other senior staff (“persons discharging management responsibilities”). It is the first of these which is posing the most significant challenges to management. MAR requires an AIM company to inform the public as soon as possible about inside information which directly concerns it. Information is “inside information” if it is of a precise nature and is likely, if made public, to have a significant effect on the company’s share price. It is at least arguable that the obligation to disclose “as soon as possible” imposes a higher obligation than AIM Rule 11 which requires disclosure “promptly” but the real challenges come from the confirmation within MAR that an intermediate step in a protracted process may itself amount to “inside information” and may need to be made public, and the arrangements around the right to defer disclosure. Following an earlier ECJ decision, MAR records that, for example, the state of contract negotiations, terms provisionally agreed in contact negotiations, and the possibility of a share placing, might amount to sufficiently precise “information” which should be made public.

Similar regulation applied to listed companies before MAR, but MAR has extended this to AIM companies, whose management now have to wrestle with the determination of whether, for example, subject-to-contract negotiations or the signature of heads of terms have become announceable. MAR does, fortunately, permit an issuer to defer announcement of inside information if it has legitimate interests to protect, provided it meets certain conditions, the most important being that the decision to defer is not likely to mislead the public. Formal EU guidance confirms that negotiations for major transactions which need to be conducted in confidence, discussions about the financial viability of an issuer, and similar major events, may amount to “legitimate interests”, although circumstances will differ in every case. The same guidance includes a non-exhaustive list of circumstances in which delay is likely to mislead the public — where the information withheld is materially different to earlier public announcements; the withheld information indicates that the previously disclosed financial objectives are unlikely to be met, or the withheld information contrasts with market expectations which have been encouraged or endorsed by the company. If a company does decide to withhold information in this way, it must, when the information is finally disclosed, provide the FCA with a written explanation of the fact that it did so and how it satisfied the various conditions, including its “legitimate interests” and why the delay was not likely to mislead the public. Of all the new rules MAR has imposed on AIM companies, the rules around disclosure and non-disclosure of inside information are likely to be the ones on which AIM companies need sound and experienced legal advice as well as advice from their corporate finance advisers.

David Smith is a partner in Druces LLP, the City-based business and private wealth law firm.



Ridgeway deal to turbocharge profits at Marshall Motor

Marshall Motor Holdings (MMH) is a Cambridge headquartered group of car dealers. The company joined AIM in April 2015. The firm is family controlled but employee managed. The Marshall family own 65% of the shares and another three investment corporations together account for nearly 20%. According to the group website, Marshall sells 24 car brands, via its 103 franchise dealerships. Marshalls sells a broad range of vehicles, from SEAT and Kia through to Jaguar, Mercedes and Maserati. In November 2015, MMH acquired Kent/Surrey/London dealer SG Smith for “approximately £24.4m”.

Ridgeway looks the perfect bolt-on The company was transformed in May 2016 with the acquisition of Ridgeway. This added 30 francished dealerships at a price of £107m. Ridgeway looks the perfect bolt-on for Marshall Motor. The new dealerships acquired are in “contiguous locations with attractive demographics and no overlap to MMH’s existing locations”. The acquisition also added five used car centres and a small collection of automotive service businesses. The Ridgeway acquisition is expected to be materially earnings enhancing to the 2016 and 2017 financial years (MMH has a calendar year end). The company reported earnings per share of 19.7p for the full year 2015. At first glance, the shares appear


very cheap. However, the rating is similar at midcap peer Lookers and £2.8bn Inchcape offers a comparable yield. Earnings in the sector are regarded as less secure. New cars are a discretionary item and sales are heavily influenced by consumer confidence. While new sales have been increasing since 2011, the recession saw new sales fall by around 20% in the UK and did not recover fully until 2014. This recovery is reflected in MMH’s profit figures, where the net profit figure increased more than threefold from 2012 to 2015.

rating is similar at midcap peer Interest rates complicate things further. Low rates facilitate lease/ financed transactions and will have provided a significant fillip to sales in recent years. This leaves the concern as to whether MMH went into debt to buy Ridgeway at a peak in the cycle. It is hard to imagine that management would not have been live to this possibility at the time. However, acquirors don’t decide when vendors choose to sell and Ridgeway does look the perfect addition to the group.

net assets of 178p per share 2015 saw a 13.5% increase in turnover produce a 21.4% uplift to adjusted profit. The end of year net cash position was £24m. New car sales were reported 9.9% higher, with used car sales showing a similar rise. MMH reported big rises in sales and profit numbers at the half-year stage, as SG Smith made a full six month contribution. Bulls will take heart from net assets of 178p per share but the bears will point to the emerging threat from online deal brokers.

Marshall Motor Holdings (LON:MMH) FOR Low valuation Asset backing AGAINST Possible market peak Online threat Market cap Bid:offer P/E (forecast) Yield (forecast) 52week low:high

£110m 134p:142p 5.9 3.8% 130p:217p


Event Review AIM Investor Focus ran on October 18th at the offices of Edison Investment Research. Executive management from AIM firms Orchard Funding Group, Next Fifteen Communications, James Halstead and Volvere all presented to an audience of investors.

Orchard Funding Group Shares in niche lender Orchard Funding have underperformed following a profit warning in July. The company blamed slow recruitment of sales personnel and longer FCA approval lead times for the setting up of insurance broker credit services. Yet the dimensions of the company’s specialty lending sector and current market environment of cheap money combine to make a very interesting investment case. Given the company’s declared intention to maintain a relatively modest lending ratio (c.f. the banks), the rate of balance sheet growth will be constrained by capital. Orchard Funding Group may have to tap the market for more money if management aims of gaining significant market share from dominant rivals are to be achieved. Orchard Funding (LON:ORCH) Unaudited interims (six months to 31 Jan 2016), showed Market cap £19m static interest income and a jump in gross profit margin but Bid: offer 85p:91p a pedestrian rise (+6%) in PBT as admin costs leapt 20%. P/E (forecast) 18.1 FY 2015/16 results are expected imminently. There is a Yield (forecast) 3.5% dividend and a commitment to continue paying.

Next Fifteen Communications It would seem that a significant component of robust recent Next Fifteen Communications’ growth is the contribution from acquired high growth companies (e.g. 2017 H1 total revenues +30.3%; organic revenues +12.8%). Margins have also widened impressively through both efficiency gains and the timely acquisition of high margin businesses in the fast growing tech sector. The market has rewarded skilled acquisition management in a strong absolute and relative share price performance. Two issues arise from this growth strategy: 1) the 17 (and soon to be more!) different acquired companies will need to be managed in a structured way so that as their sectors mature, the companies will continue to deliver the appropriate quality of results; 2) the typical acquisition price multiple of 5-6x ebitda has succeed so far but as competitors also buy up small players, the diminishing pool of potential target companies could lead to uneconomical prices being paid. For the moment the stand-out attraction of Next Next Fifteen Communications (LON:NFC) Fifteen is that 85% of profits are non-UK based. Earnings will benefit significantly from the current weakness of Market cap £267m sterling particularly against the US dollar. The shares will Bid: offer 334p:343p also continue to benefit from the increasing weight of P/E (forecast) 16.3 ‘tech’ agencies in the group. Yield (forecast)




Event Review James Halstead Recent share price underperformance at flooring manufacturer James Halstead is something of a myster, given that only 35% of James Halstead revenues are UK based and that sterling has weakened significantly against the dollar and euro. Moreover, one should have expected that a company that manufactures a commodity product (and through discipline has managed continually to increase margins over the past decades) would benefit massively from the currency bonus — yet this is not reflected in the share price. Perhaps it has not helped the share price that the company valuation would already seem to be at a premium relative to its sector peers — in recognition of its good management. It may also be possible that investors are not yet fully aware that James Halstead is a major beneficiary of sterling weakness. The company has stated its intention to use its unexpected currency advantage to gain market share overseas, especially in Asia. Increased sales volume will drive up capacity utilisation in UK plants (new machines have been working James Halstead (LON:JHD) at 60% capacity) leading to margin gains. Higher sales Market cap £943m volumes overseas, rising margins and favourable currency Bid: offer 454.75p:448.75p translation comprise a substantial tailwind. P/E (forecast) 25.6 James Halstead is a high quality company that perhaps Yield (forecast) 2.8% deserves to be priced at an even greater premium.

Volvere Volvere is essentially a 2-man (brothers Jonathan and Nick Lander) operation that specialises in turning around either loss-making or marginally profitable companies. The Landers implement their management skill set and sell rehabilitated companies at a profit. Volvere has typically worked on two to three turnarounds at any one time, selling them after three to five years. Since 2002, IRRs of between 40% and 160% have been achieved upon sale of acquired companies. Accumulated cash accounts for nearly 75% of the NAV. Dividend policy is “no dividend” but Volvere does have a history of share buybacks. The company does not feel any pressure to distribute the cash pile because such liquidity is required to maintain Volvere’s standing as a capable acquirer with turnaround project vendors. The operational track record has been rewarded with a share price that has grown at a CAGR of 13% (vs. FTSEAll Share 5.2%) since the 2002 IPO, notwithstanding the intrinsically high-risk policy of taking on such Volvere (LON:VLE) concentrated investments. Can they keep up this amazing Market cap £21m track record? The shares are valued in the market like a Bid: offer 500p:515p holding company — which Volvere is not — and provides P/E (forecast) 576p a comfortable (and potentially very rewarding) entry price Yield (forecast) 0 for disciples of the Lander brothers.

If you have not previously attended AIM Investor Focus and would like to in future, please contact the organiser here. 10


Reinvented recruiter improving fast Parity Group is a recruitment company that joined AIM from the main market in 2013. The company is one year into a significant restructure. There has been massive upheaval at board level since the appointment of Alan Rommel as CEO in August of last year. September 2015 saw Michael Aspinall take the role of Group FD and two founder directors stepped down in November 2015.

stock was beginning to look untradeable Mr Aspinall then left the group in April 2016 and was replaced by Roger Antony, an internal hire. A new nonexecutive director was appointed in September of this year. In October, it was announced that the Group Chairman would depart “in the next few months” and another nonexecutive left. It may appear that no-one wishes to work alongside Mr Rommel. However, the share price graph of recent years suggests a failing company in desperate need of massive change. Shareholders may be telling themselves that “the new lot cannot do a worse job than the last”. The Parity board was clearly failing and with a declining market capitalisation, the stock was beginning

business refocussed on Parity Professionals

to look untradeable to serious investors. On assuming leadership, Mr Rommel announced a £1m costcutting exercise. Ambitions to acquire businesses operating in the digital communications space were scrapped as the business refocussed on Parity Professionals, a division dedicated to ensuring that client staff are “sourced, developed and informed in today’s dynamic decision making environment.” Mr Rommel’s first set of full year results showed Group revenues of £84.5m and positive cash flow for the first time in five years. The group reported net debts of £7.4m, ahead of the £6.6m reported at the end of 2014. Parity reported trading across two divisions in 2015, Parity Professionals (recruitment) and Parity Consultancy Solutions, an IT consultancy providing Business Intelligence solutions. In 2015, Parity Professionals delivered £78.2m of revenues and a “divisional contribution” of £2.3m. The consultancy operation was vastly more profitable (likely skewed by the fact that much of the recruitment division revenues will be pass-through i.e. contractor pay), reporting a contribution of £0.8m from £6.7m of revenues. Management’s plan is to deliver growth by assisting businesses with

consultancy division was 17% ahead significant management and staffing strategy (via consultancy operations) and then to provide the people to facilitate via the traditional recruitment operations. This strategy appears to be working. Results for the first six months of 2016 showed all the headline figures moving in the right direction and an extension of banking facilities out to 2018. Parity Professionals enjoyed a 15% increase in revenues and the consultancy division was 17% ahead, where a significant contract with the Ministry of Defence was extended. It will be a long way back for Parity but newsflow demonstrates that the recovery is underway. Parity Group (LON:PTY) FOR Momentum in recovery Winning contracts AGAINST Small scale operations Significant debt Market cap Bid:offer P/E (forecast) Yield (forecast) 52week low:high

£10m 9.25p:9.75p 10.1 0% 6.8p:15p



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