Financial services concern Berkeley Morgan has returned to the black, producing a £1.3m pre-tax profit during the year to April against a £2.7m loss last year. This happened as turnover rose 11% to £16.5m and overheads were reduced by 24.3% to £3.6m. Looking ahead, youthful chief executive Jon Pardoe hopes to increase the group's margins by focusing on selling its own 'white-labelled' financial products rather than those of other insurers and financial providers. Instead of being considered a typical independent financial adviser, Pardoe would prefer to be compared with AIM-listed Personal Group, which principally provides employee benefit packages and is consistently profitable. Nevertheless, half of Berkeley Morgan's business comes from traditional IFA sales work. However, Pardoe is not chasing growth at all costs in this business - choosing quality over quantity and refusing to take part in the predicted consolidation process in the industry. Turnover in this area fell 11.4% to £6.2m but a £750,000 loss became a £440,000 pre-tax profit thanks to cost cutting. The turnaround produced earnings of 8.4p a share. This puts the shares on a p/e of 8.3, even after they rose 7.5p on the day of the results. Looking forward, Pardoe says at least 50% of last year's turnover can already be predicted, because of recurring commissions. Sources suggest pre-tax profits could rise 15.4% to £1.5m, which would make the shares even more attractive. Buy.