Companies: DRV   

The prospects accelerate at Driver, a commercial and dispute resolution services provider to the construction industry. Backed by Growth Company Investor at 116p last year, the company has completed its first acquisition since floating on AIM in 2005, buying engineering and construction consultant CMC for £2.9m in cash and shares in a deal that excites chief executive Steve Driver.

CMC, set to boost earnings in its first full-year, provides site-based project services such as quantity surveying and planning to UK construction and engineering firms and has an established presence and brand in sectors such as rail, utilities, water and airports. Driver sees the acquired business, which made operating profits of £450,000 from £3.8m sales last year, as an excellent strategic fit, bringing complementary services with it, as well as opening up new markets.

‘There’s a great opportunity to introduce them to our existing clients and vice-versa,’ comments Driver. ‘There is also an opportunity to bring CMC into our framework deals.’ Moreover, analysts think there is substantial scope to raise the charge-out rates of CMC to the benefit of the group’s bottom line.

Broker Panmure Gordon has upgraded its September 2009 pre-tax estimate accordingly, by 13% to £2.95m, with earnings increased to 7.98p, placing Driver’s shares on only 11.4 times forecast 2009 earnings, a multiple falling to 10.9 for 2010. That is too low for a company flourishing in buoyant markets at home and abroad (the Middle East is a notable hot spot) and offering resilience to downturn based on exposure to diverse sectors. Buy/hold.

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Driver Group	AIM	£18.07m	68.50p	2.00p
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