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Interquest Results - still a recovery buy

By Tom Winnifrith & Steve Moore | Thursday 16 March 2017


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Technology sectors-focused recruitment group, InterQuest (ITQ) has announced results from a “challenging” 2016 year of“transformation” following a change in executive management, though is “cautiously optimistic about 2017”.

The results show a pre-tax profit before exceptionals of £3.3 million, down from £4.8 million in 2015, on net fee income of £21.7 million. A dividend per share of 1p is recommended to be paid on 16th June with an ex-dividend date of 18th May, taking the total for the year to 1.5p per share (2015: 3p per share).

After particularly exceptionals, £0.8 million of income taxes, £0.8 million of acquisition spending in excess of new equity raised and £0.9 million of dividends paid, net debt was reduced by £0.4 million to £5.6 million. Current assets were a further £1.1 million more than liabilities at £4.1 million.

CEO Chris Eldridge emphasises “we have addressed the areas of the group that have underperformed during the year and developed our service offering both in the UK and in the US following the acquisition of RDW” and broker to the company Panmure Gordon is forecasting pre-tax profit recovering towards £4 million this year, generating earnings per share of 7.5p.

The results announcement has seen something of a further share price recovery – to a current 36p – though such a valuation still looks mighty lowly. Admittedly, the 2016 decline in trading does not encourage, but there looks enough on offer here now to continue to merit a recovery buy.

This article first appeared on the Nifty Fifty website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website ahead of the next TWO share tips from Tom & Steve within four weeks and ahead of a new shorting idea from Lucian Miers this Friday click HERE


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