Construction and property consultancy Cyril Sweett is a play on the consolidation of a fragmented UK market as well as growth in emerging overseas construction markets.

Floated on AIM in October, the ambitious group provides quantity surveying and project management services in the UK, Europe, the Middle East, Australasia and India. Recently unveiled annual results to March were impressive, showing pre-tax profits up 28% at £5.9m, on revenues increased by 20% to £62.7m, with growth delivered largely organically and acquisitions adding spice. Following a year of strong cash generation, a total dividend of 2.4p was proposed, whilst operating margins widened to 9.3% (2007: 9.1%).

Moreover, chief executive Dean Webster cheered with news of a record £86m order book, 28% of which consists of overseas work. As well as demonstrating the rapid growth Cyril Sweett is enjoying internationally (non-UK work represented only 15% of last year’s revenue), the burgeoning order book also means 74% of 2009’s forecast sales are already in the bag.

On target to evolve into a £100m sales business by 2010, Cyril Sweett is forecast to deliver a rise in pre-tax profits to £8.5m from £86.5m turnover this year, producing earnings of 9.7p and placing the income-yielding shares on a prospective multiple of only 7.1 times. Given the group’s robust growth prospects, which are underpinned by its increasing diversity, that rating is too low. Strong buy.

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