Support services is one sector that has consistently provided AIM investors with intriguing situations, and I have found two more counters that could offer punters a very profitable future

I recently shot the breeze with Andrew Goodman, chairman and chief executive of Public Recruitment Group, the provider of staff to healthcare and education that floated on AIM in April at 136p a share. Recruitment industry guru Goodman was talking me through the 'buy and build' venture's maiden public company results.

And strong interim figures to June they were, with profits coming in at £1 million – ten per cent ahead of expectations at the time of the float – on turnover 79 per cent up at £22 million.

Since the half-year, PRG has spent over £17 million buying Academy, Teach London and Action First Recruitment, the latter adding social work as a third business stream. Goodman is sure these deals will give profits a significant shot in the arm, especially in 2005, once the acquisitition dust has settled.

Goodman concedes that valuing PRG today is a tricky task, given its recent transformation. For 2004, analysts are going for pre-tax profits of £2 million, giving 8.1p of earnings. By 2005 the City thinks sales could reach £81 million, dropping £5 million down to the bottom line – earnings should grow to 14.8p. Analysts conservatively forecast a £5.6 million surplus and earnings of 16.7p by December 2006.

So at the current 145p, PRG trades on a forward p/e of 17.9, falling to 9.8 times next year and to just 8.7 times for 2006. That's dirt cheap for a profitable, fast-growing business. 'We're growing faster than other recruiters and we've got greater visibility of customer spend,' raves Goodman, who recently snared another 5,650 shares at 146p, increasing his stake to 9.48 per cent. I advise readers do likewise.

Get the bug

Impressively, PRG has built itself into a top five player in the education, social care and health sectors. That it should focus on this latter sector is not a surprise, because this is a buoyant area.

One issue many listed companies are trying to solve (and profit from, of course) is the nasty MRSA epidemic. The method of dealing with it at present is basic (fervent hand washing and isolation of patients) and current tests are very slow. Quite simply, quicker detection would save lives.

Thankfully, private Wiltshire-based venture Acolyte Biomedica has developed a rapid MRSA screening test – the BacLite MRSA System – that could launch in the UK as early as the second quarter of 2005. Dramatically, it can detect the bug from nasal swabs in hours, not days, with the drop in testing time based on technology originally developed by an agency of the Ministry of Defence.

And who holds 10.28 per cent of Acolyte's equity? Step forward ANGLE, a support services venture that listed on AIM in March at 144p. It founded Acolyte at the beginning of 2000.

ANGLE's chief executive Andrew Newland says Acolyte's technology can also speedily identify infections like meningitis and E.coli. 'It has huge applications,' he enthuses, 'because it can slash hospitals' patient healthcare costs. We've already had serious interest in acquiring our Acolyte shares. But we're holding for now. Down the line, we feel the company is a serious candidate for an IPO.'

ANGLE's maiden figures to April showed a £2.3 million pre-tax profit, swelled by a £2.3 million profit on the sale of Exago just after float. Impressively, ANGLE's return on this investment was over 1,100 per cent. Newland tells me he always looks for a high multiple from his progeny, since ANGLE forms each business and invests at the embryonic stage. Newland also waxes lyrical over Provexis, which has just announced a joint venture with another AIM newcomer, Nutrinnovator, to develop a new heart-healthy drink. ANGLE promises high returns for punters and deserves to be trading above its miserly 120.5p, which values the business at £20.2 million.