Companies: SWG   

International engineering and design consultant Scott Wilson, recommended by Growth Company Investor at 312.6p in early 2007, has hit the acquisition trail again, taking over bridges and ‘metro sector’ specialist Benaim in a transaction capped at £5.5m.

This is the third and largest bolt-on deal of 2008 from Scott Wilson, led by affable executive chairman Geoff French, which has already worked alongside Benaim on projects including the East London Line and Malaysia’s KLIA Express Rail Link.

The high-margin Benaim made £1.1m pre-tax from £5.6m sales in the year to September and, together with the recent acquisition of Terence Lee Partnership, strengthens Scott Wilson’s skills in the metro sector. Benaim will also boost Scott Wilson's expertise in terms of working on major bridges in both the rail and road sectors.

Upgraded forecasts for the year to April 2009, from Numis Securities’ Francesca Raleigh, who has a 247p target for the shares, suggest adjusted pre-tax profits of £25.65m and 22.1p of earnings. For 2010, she expects £28.65m pre-tax and EPS of 24.5p.

Scott Wilson has doubled in size over the past few years, with its diverse operations now spanning Europe, South Africa, China, India and the Middle East. The company showcased its resilience in June, unveiling record results once again and reporting a bumper order book increased to a healthy £280m. While the shares have disappointed, in line with most small-cap companies, Scott Wilson’s operations are going from strength to strength. If you have yet to sell, there is little sense in doing so now.

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Scott Wilson	LSE	£143.19m	188.00p	5.50p
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