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A shortage of teaching staff in London helped Servoca (LON:SVCA) double pre-tax profits last year
The company, which supplies staff for the public sector, saw business surge in the second half as schools and colleges struggled to fill teaching posts.
Most of the jobs it filled were in London, with placements in the Capital accounting for 75% of the unit’s postings.
An overall profit before tax of £1.7mln in the year to September compared to £800,000 in 2013.
Revenues climbed to £49mln, a £6mln increase on the previous year.
Healthcare recruitment division also experienced a return to growth, with doctors and nurses filling spaces across the UK.
The firm also sources retired police officers for special operations, such as the ongoing Hillsborough enquiry, but has seen margins slip after government cuts to UK border staff.
Chief executive Andy Church said overall the business had seen positive momentum in the second half of the year and trading conditions have stabilised.
Recruitment counts for 80% of the firm’s operating profit, but Servoca’s security operations also picked up.
The company was one of a handful of firms that supplied stewards and other security staff for which the Commonwealth Games in Scotland.
Its security business, which has traditionally supplied guards, has been leaning more towards a specialist product-reselling strategy.
The firm resells ‘Red Tag’ (the red plastic security labels stuck on DVDs and video games) to UK stores.
It also has an exclusive UK contract with supermarket chain Iceland to supply Storevision, a CCTV system that monitors individual till transactions to monitor employee theft.
Broker finnCap said the results were results were better than expected.
“We are introducing new two-year forecasts which show EPS growth rates of 30% and 23%, and accordingly raise our target price from 17.5p to 21p.
The broker added that given improved visibility (thanks to the Commonweath Games) and encouraging growth prospects, the shares look compelling at the current levels and offer attractive upside.
Shares were 0.5p lower at 16p.