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Fire training equipment company IFTE impressed the market with its first full-year profit since listing on Aim three years ago. First recommended in Growth Company Investor as a 'long-term buy' at 91p in May 2001, IFTE buoyed followers with excellent figures for the year to April. Maiden pre-tax profits hit £1.8 million, against last year's £1.4 million loss. Sales meanwhile improved by 63 per cent to £21.2 million.

During the year, gross margins rose from 26 to 32 per cent, with margins in the European division lifting from 11 per cent to an impressive 21 per cent. Its US-based subsidiary, Symtron, which contributed roughly two-thirds of those sales, enjoyed a 'truly excellent year', with enquiries moving to record levels. 'We have delivered results that meet the City's high expectations,' comments 'delighted' chairman David Williams.

After May's year-end, the company raised £2.5 million via a share placing at 115p. Williams says the cash will be used to develop mobile training simulators and fund a number of roadshows. 'We're looking to invest more in the mobile trainer market, because we can lease them to fire brigades and it's financially easier for them to take them on.

'The market for fire safety is one of the few genuine growth markets that I can think of at the moment.'

Looking to the year ahead, he reveals that Symtron has a number of exciting prospects in the pipeline, the European market is starting to develop and the Middle East is 'totally untapped'.

House broker Teather & Greenwood expects £25 million sales and a £1.8 million profit for 2003, giving 7.4p of earnings.

At 117.5p, the firm is valued at just £29.2 million. There is much more to come.

Goldshield's mixed fortunes

Shares in healthcare and pharmaceutical play Goldshield glided 50p higher after it unveiled a sharp rise in profits for the year to March – its 11th consecutive year of sales growth.

The group, which was our Company Profile in July 2001, saw pre-tax profits jump 26 per cent to £15.9 million as turnover came in more than 40 per cent healthier at £100.4 million. Encouragingly, the full-year dividend was raised from 3.45p to 4.35p.

However, most of the recent market attention has focused on the Serious Fraud Office's surprise visit as part of an investigation into a suspected conspiracy to defraud the cash-strapped NHS. The enquiry concerned the pricing and supply of penicillin-based antibiotics and warfarin between January 1996 and December 2000. 'We were taken aback,' muses Patel, 'because we've always had a clean track-record.'

Patel later said that the company did not sell any penicillin-based products during the period under investigation. He also says that the warfarin side of the investigation only applies to the group in a 'very limited' way.

Goldshield has given the SFO its full support and cooperation, and believes it did not act 'in an unlawful or improper manner'.

In terms of trading, Patel believes house broker West LB Panmure's recent 2003 sales estimate of £125 million is 'not unrealistic'.

At 397.5p, the shares are well below our original recommendation price of 733p. But until the SFO wraps up its investigations Goldshield carries many risks. Stay clear for now.

Speedy rise

First recommended in the October 2001 at 197.5p, Speedy Hire's shares have soared as high as 358p over the past 52 weeks. However, they reversed to 316p on its full-year figures.

The company used to be a diversified building conglomerate, but these days its core business is hiring out tools to UK contractors and builders, industry, utilities and the public sector from 250 depots around the country. Over the past two years, the firm has lifted its number of depots from 170, and the ultimate target is to have 400 branches.

Back in January, Speedy Hire bought 37 tool hire depots from builders' merchant Jewson for £13.5 million, boosting its presence in the West Country, London and south-east.

Its preliminary numbers to March showed continuing profits before tax and exceptional items up an impressive 14.5 per cent to £15.4 million on a 21 per cent sales hike to £120.7 million. Earnings per share put on 26 per cent to 26p, but the dividend was cut from 13.9p to 8p, as the company had previously warned, to conserve cash for expansion.

'Our experience, almost without exception – from the major quoted construction groups to the local maintenance engineer – is that they remain busy, with strong forward order books. And we remain encouraged by the strength of our markets,' explains chairman David Wallis.

Broker Beeson Gregory forecasts pre-tax profits of £18.3 million this year, giving earnings of 30.8p. This leaves the shares trading on 10.5 times prospective 2003 earnings.

With the construction sector buoyant and plenty of deals to go for, those who have gained exposure to this stock should continue to hold. Those that have yet to buy in should seriously consider doing so.

Screen enters US market

We recommended security and communications systems provider Screen in November 2001 at 56p. Disappointingly, the shares have since fallen to 37p. Full-year figures to December fell some way short of expectations after several contracts failed to materialise at the back-end of last year.

Nevertheless, the case for staying invested remains a compelling one. Screen has just announced a move into the US market through a deal with Texas-based Applied Concepts (better known as Stalker Radar) for the distribution of a specially-developed version of its ProVida video evidence and enforcement product.

Apparently, Stalker Radar is North America's biggest manufacturer and supplier of speed radar systems. The new version brings together its radar technology with Screen's camera and video offering to record action 'in front, behind and to the side of a vehicle'.

The US has a potential market for video-based speed enforcement and surveillance systems of 20,000 units a year. Deliveries will start in June.

Investors liked a generally upbeat AGM statement in which chairman Owen Williams said Screen would meet market expectations at the half-year stage, with a particularly strong performance from its latest acquisition, Joyce-Loebl.

Demand for its defence and transport products is encouraging. Meanwhile, orders for its CCTV and information displays from Portuguese Rail, Bombardier and Alstom alone exceed £2.3 million.

Furthermore, the group remains a leading player in the 'blue light' (or emergency services) sector, where it supplies the in-car video evidence and enforcement market in Italy, Bulgaria and the Netherlands, among other countries.

Analyst Stephen Ford, of house broker Collins Stewart, has a 'Buy' recommendation on the stock. He expects profits before tax and goodwill of £2.4 million for the current year, giving 3p of earnings, with £3.2 million and 3.9p to follow in 2003.

At 37p, the shares are trading on an undemanding 12.3 times forecast earnings, falling to 9.4 next year.

Its markets are awash with growth prospects following last year's Manhattan tragedy, so investors should hold onto the shares. If you have not bought in yet, you should consider doing so.

Parkwood picks up third PFI deal

Those who followed our advice to buy shares in support services group Parkwood back in March will have welcomed news of its third private finance initiative (PFI) deal. Signed as part of a consortium led by Miller Construction and Bank of Scotland, called D4E Mulberry, in which Parkwood has a 10 per cent stake, the contract covers a 27-year concession period and is valued at £55 million.

In short, the deal involves Miller constructing a new building for Mulberry School in Tower Hamlets, after which Parkwood subsidiary Glendale will carry out the facilities management. Once the building is ready, Glendale should see about £600,000 of turnover per year.

Chairman Tony Hewitt tagged a positive trading update onto the announcement. It showed that trading this year is in line with expectations.

Back in March, the board reported a strong recovery from a disappointing year in 2000, with pre-tax profits for the year to December rising from just £19,000 to £1.3 million. Turnover rose by 8 per cent to £40.9 million, and at year-end the order book stood at £154 million, up from £132 million at the half-year stage.

House broker Beeson Gregory has pencilled in pre-tax profits of £1.5 million for the current year, giving earnings of 5.5p per share. Potential investors can expect £1.7 million and earnings of 6.10p to flow through in 2003.

On a forward p/e ratio of 11.9, falling to 10.3 next year, the stock – at 65.5p – remains excellent value in a pricey sector.

There is plenty of upside and this third deal has done nothing but boost the visibility of its earnings. Strong Buy.

Do not write off Total

Insurance software developer Total Systems has not been immune to the downward pressure of the market. Since we recommended the shares at 125p in our April issue, the price has slipped to 80p – through the 20 per cent 'stop loss' limit. So should you keep holding the shares?

According to John Dickinson of house broker Brewin Dolphin, there was no obvious reason for the price fall, other than the general malaise among TMT and software stocks.

'Results are due out in a few weeks time, and we are waiting to see how the order book looks,' he explains. 'And the order book is very important to a company such as Total.'

The share price has been fairly volatile, but this is not unusual for a small cap stock with a limited free float. Dickinson says its management is considering selling some of its stake, which currently stands at around 75 per cent.

Nevertheless, fans of the stock will say that the lower share price represents excellent value – a view with which with Dickinson concurs. 'At these levels, it is looking attractive. Total is potentially a very nice story, but it is not going to be a smooth ride.'

We recommend that you keep holding the shares.

Keeping its head above Watermark

May's Company Profile, airline amenity kit business Watermark, has performed creditably in the short period since we recommended the shares. The price has held up well against the background of a falling stock market, slipping back only marginally from 104p to 101p.

There have been some interesting developments over the past few weeks. At the end of May, Watermark bought Globe Services for £604,000. Globe, which supplies headsets for airlines, made a net profit of £135,000 in the year to December. Some £200,000 was paid in cash on completion, with the balance payable in shares over the next two years.

According to ebullient chief executive John Caulcutt: 'This picks up the acquisition programme that had been put on hold since 11 September. We picked up Globe for 4.5 times earnings, when we are trading on a p/e of about 15. And there are lots more businesses around which we can go for.'

Separately, Caulcutt has appointed Numis as joint broker to the company. He says: 'Quite simply, Numis is incredibly well connected in the support services world. It has an amazing bunch of guys who can get the Watermark message out to the institutions. We have done over 40 institutional presentations with Numis and, as a result, three major funds have come on board. The business remains very robust.'

We recommend you keep holding the shares.

Private comfort

'Trading continues to be healthy. Both divisions are... operating in line with expectations.' These were the comforting words from the board of Private & Commercial Finance, the speciality finance group that provides loans to consumers to buy cars, and to businesses to purchase plant equipment.

The group claims that it is on the verge of completing the securitisation of its finance portfolio (which should enable it to reduce the cost of funding new lending).

After a few uncharacteristic delays, the group is also on the verge of completing an upgrade of its internal computer systems. This should lead to the company being able to deal with a significant increase in transactions.

For the full year, the expectation is that PCF will produce profits in the region of £1.9 million and earnings per share of 7.5p. For 2003, profits of around £3.4 million are expected. But this figure has been arrived at by broker Seymour Pierce without taking into account the big improvements that the systems upgrade and securitisation could deliver. Do not sell.