Empresaria Group is a diversified recruitment business with operations in the UK and abroad. From lorry drivers and maintenance workers to insurance clerks and butlers, the group aims to find the right people to fill both temporary and permanent positions.

Empresaria’s approach is designed to minimise the risk to its overall business from a downturn in a particular sector or country. Each of the companies in the group is run by experienced managers who own significant equity stakes in their own businesses or in Empresaria. Already Empresaria supplies recruitment to a number of distinct markets.

These include financial services, supply chain, construction, property services and engineering, and the public sector, among others. In line with the increasing trend for casual labour in employment markets around the world, the group is growing the proportion of net fee income that it gets from temporary staffing. In the first half of 2007 this was 62 per cent, compared with 52 per cent in the same period of 2006.

Empresaria’s shares have fallen sharply since the end of last year. While they were trading for as much as 187p each last summer, recently they have been changing hands for less than 90p each. This is in spite of a very upbeat trading statement, released in February, that revealed revenues and net fee income for 2007 were almost double those achieved in 2006, while profits for the year would be in line with market expectations.

The statement also revealed that the majority of net fee income was now being generated overseas, compared with just 33 per cent in the first half of its 2007 financial year – which fits well with the group’s diversification strategy. Meanwhile, Empresaria said that 2008 had started well, with trading in January ahead of management expectations. Empresaria is set to report earnings per share (EPS) of just over 9p for 2007 when it publishes its final results on 18 April. For the current year it is expected to deliver EPS of 12p.

This means the shares are rated at less than eight times prospective earnings despite those earnings being forecast to grow at more than 30 per cent this year. As well as the strong fundamentals, a purchase of 500,000 shares, at 82p per share, by chairman Tony Martin in February, along with a little institutional buying, gives us confidence about prospects for Empresaria’s share price in the medium to long term. Buy.

Empresaria Group	AIM	£21.73m	64.75p	0.00p
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