Companies: ACG    TAN    WTL   

In the fast growing IVA sector, analyst Roger Tejwani says that Accuma’s recent acquisition of profitable consumer debt advice company, Thomas Charles & Co Limited, increases the group’s IVA market share and mortgage revenues whilst lowering average client acquisition costs. The initial consideration is £2 million with a three-year earn-out worth a maximum £10.5 million. The deal is expected to immediately enhance earnings and leads Tejwani to upgrade his FY07 adjusted and diluted EPS forecasts by 28 per cent. Macroeconomic conditions favour Accuma’s model and with the shares trading on a July 2007 p/e of 15 times (for 196 per cent EPS growth) Tejwani retains his buy recommendation.

Tanfield, maker of electric vehicles, aerial access platforms and technical engineering services, has grown significantly over the last two years, targeting acquisitions of underperforming operations in growth niches that have a strong product/brand base but need additional sales and marketing effort. The acquisitions of SEV and most recently UpRight are both being rejuvenated. SEV is seeing strong interest in its new product range of zero emission vehicles and an early contract win for UpRight aerial access platforms helps reinforce David Buxton's forecast of 22 per cent EPS enhancement. The shares have been good performers, but remain substantially lower than his 48p price target. Buy.

David Johnson says that Waterline, the UK's largest independent supplier to the fitted kitchen industry, represents good value at current levels. The company recently announced adjusted PBT of £2.0 million (up from £1.0 million in FY05) plus a maiden dividend of 2.75p per share. Waterline's management reports that 'current trading is encouraging', a view borne out by newsflow from other suppliers to the mid and high end kitchen market (AGA, Smallbone and Omega International). At the current price (70p), the stock is trading on a current year p/e of 7.4 times, yielding 4.2 per cent.