Companies: CTG   

Recently profiled by Growth Company Investor at 124.5p, business services and software concern Christie Group’s key attractions included a formidable track record and the diversity of its operations.

Indeed, the company enjoyed another record year in 2007, increasing profits by 17% to £7.2m, on turnover of £87.4m (2006: £87.1m). From earnings increased 13% to 19.12p, the total dividend was increased from 4p to 4.25p.

However, in June the company warned that trading had taken a turn for the worse within its business agency, Christie & Co, which values and sells businesses. Volumes had begun to reduce, it said, alerting the market to the impact that the credit crunch was having on its core business.

While enquiry levels within the business agency were good, deals were taking longer, ‘where purchasers have existing property to dispose of and new finance facilities to arrange’. Encouragingly, the group’s consultancy and valuation operations were said to be remaining busy and the stocktaking and inventory services division was continuing to grow.

However, the board warned that trickier trading and the need to spend money to reduce costs within the business agency would ‘significantly reduce’ trading profits for the year. It also revealed that it was looking for a strategic partner for its software division, to ‘relieve the group of development funding requirements for the new software’.

While Christie Group has been through downturns before, given increasing uncertainty and the poor performance of the shares to date, we feel investors should perhaps cut their losses and switch into other stocks.

Save 50% off your first year’s subscription to Growth Company Investor magazine, and gain immediate access to all the recommendations online. Click here.