Ten Alps has dramatically transformed since we recommended the shares at 44p last June and, having made a major move into publishing, looks a much more stable investment. Furthermore, the company has just announced more than 20 new TV and radio production contracts with a total value over £6.1m.

It has completed three acquisitions in the last few months: factual TV production company Hart Davies for up to around £1.1m cash, drama production company Cottage Industries for £75,000 in cash and public sector publishing company McMillan-Scott for up to £12.3m in cash.

McMillan-Scott, where average turnover over the past three years was £26.14m, is the largest in the company’s acquisitive history. It publishes and/or manages advertising sales in over 300 publications and 40 websites in the public and business-to-business sectors. Connock explains that Ten Alps decided on the purchase as it believes contract publishing is going to ‘go online’ in the next five years and sees exciting prospects in developing specialist digital channels for McMillan-Scott’s clients.

Hart Davies adds award-winning programming to Ten Alps’ strength in factual TV and Cottage Industries provides Ten Alps with two BBC1-financed projects and its MD Jo Willett as head of a new drama division. Says Connock: ‘Drama is about expertise – and Jo Willett is an expert. On day one she not only has her own impressive slate, but also a desk covered with drama projects and ideas from our existing companies.’

Joint broker Collins Stewart predicts that £40m sales for the year to March will produce £2.3m profits and 3p earnings. The broker sees the acquisitions pushing sales up to £71m in 2007, with £3.8m profits and earnings of 4.3p. With the share then trading at 15.8 times 2007 earnings, below the 18.3 sector average, we advocate topping up your holding.