A 50-50 split between private and public sector recruitment is driving healthy organic growth at acquisition-hungry BNB Resources. FD Paul Turner says the board is seeking acquisitions ‘that provide counter-cyclical revenues, greater geographical reach and have products that sit alongside the existing offering’.

BNB’s operations are split into recruitment solutions and recruitment consultancy. Solutions, led by brands such as Barkers and TCS, is increasingly focused on improving efficiency and expanding margins, the former by implementing new technology and the latter though an improved offering of added-value services. Clients in central and local Government as well as Norwich Union, Siemens and BP were won in the period.

The consultancy division, including brands such as Norman Broadbent and Exec2Exec, pulled in the biggest recruitment process outsourcing contract in the UK last year as Royal Sun stumped up £5m for a three-year contract. In the public sector Defra, The Cabinet Office and the Land Development agency are all now clients too. Further growth here is targeted through an increase in diversification of products and services as well as expanding its niche offerings and international reach.

In the 12 months to the end of December BNB beefed up sales by 16% to £175.8m, with pre-tax profit swelling 380% to £528,000. And within operating profits, which grew 87% to £2.6m, there was 56% organic growth.

For this year company broker Shore Capital forecasts £3.2m adjusted profit before tax on £165m sales, with EPS of 1.45p. For 2007 sales are expected to come in at £175m, profits at £4.3m and earnings at 1.77p. We last recommended BNB in May 2005 at 16.75p, but having come back somewhat since, the shares look good value at the current price, trading at 9.3 and 7.6 times those earnings, below peers. Add.