As foreshadowed in a summer trading update, business and IT management consultancy Charteris, a Growth Company Investor recommendation at 28.5p, beat forecasts with excellent results for the year to July.

In the second year of a three-year strategy for growth, adjusted pre-tax profits powered 63% ahead to £1.2m, on a 40% revenue rise to £19.3m, as Charteris delivered strong organic growth in parallel with the acquisition of Cedalion, which now forms a key fourth practice within the business. This £3m October 2004 acquisition, an Edinburgh-based technical consultancy, contributed £1.8m to the top line and proved decisive in Charteris beating off rivals for work with ITV Broadcast.

Cedalion aside, Charteris also enjoyed decent organic turnover growth of 27% in an industry still recovering from recession, and reported strong cash generation – £1.4m from operations – closing the period with £2.1m cash, despite using £2.7m to fund the Cedalion deal. Chief executive David Pickering says the company has now returned to strong growth but on a broader business base. Last year, the strongest growth was in government and in financial services & media, whereas in the previous year it was in retail, manufacturing and services.

Pickering said last year, the company’s skills were deployed on some of the largest technology-enabled change programmes in the industry, and Charteris’ expertise in the strategic application of Microsoft technologies proved a driver of growth yet again. This year, he reckons further he will deliver more turnover growth and gradual operating margin improvements. For 2006, the market forecasts a profits leap to £1.5m off £21.5m sales, giving earnings of 2.5p and a forward p/e of 17. The shares are well worth holding.