Some readers may be unfamiliar with Interactive Prospect Targeting, which joined AIM in December 2004 at 68p. This company is a rising star in the UK’s rapidly growing online direct marketing industry.

Boasting a database of millions of ‘opt-in’ email addresses compiled from completed questionnaires from prize draw websites, IPT leases these addresses out to blue chip clients for direct marketing campaigns.

Chief executive Lionel Thain recently delighted investors with a bullish trading update for the year to December 2005. Since announcing the half-year figures, trading has remained strong, and 2005 sales will strike bang in line with forecasts. Profits should hit £1.52 million on sales of £13.3m. Thain also claims that, ‘based on the latest information available to the company’, profits for 2006 are likely to come in higher than City estimates.

The £4.3m August acquisition of Postal Preference Service also looks a winner, with this rival direct marketing company having achieved sales targets already. At the time of the Postal Preference deal, IPT also took the opportunity to raise £3m through a placing with institutions priced at 115p, which has boosted the free float from 20% to 33%.

For December 2006, investors might expect pre-tax profits of at least £3.84m on £19.4m sales, giving earnings of 9.1p and a 2006 forward multiple of 15. That is too low for a business going places. Buy