Bumpy ride at MSB continues

THE ROLLER-COASTER ride for investors in MSB International, the IT recruitment firm set up by Mark Goldberg, owner of Crystal Palace football club, shows little signs of being over.

Following last month's profits warning, which wiped 20 per cent off the value of MSB shares, there were no more nasty surprises in yesterday's hard numbers. The shares, which have regained most of their recent losses, closed up 4p at 217.5p.

However, that still leaves them at barely a fifth of where they were when Mr Goldberg sold most of his stake to finance his purchase of the club last May.

The beleaguered entrepreneur, whose Crystal Palace venture has been a financial disaster, now holds just 5 per cent.

Profits before tax for the year to 31 January were pounds 11.6m against the pounds 11.5m flagged on 23 March.

The firm has also broken down the pounds 3.5m exceptional charge which it said it would be taking this time.

Of that, pounds 2.4m is to cover the reorganisation of the workforce, with pounds 1.1m being set aside to cover the lease on the company's former premises.

The IT recruitment market is changing radically and the MSB chairman, David Sugden, rightly believes that the approach that served the firm so well in its early years is no longer suited to the more mature market that IT recruitment has become.

The problem is that he is trying to change the culture at a time when customers are holding back ahead of the Millennium.

Even barring no further upsets, the company will be hard- pressed this year to make the pounds 9m profits it made in 1998.

That puts the shares on a lowly forward multiple of just 7. Hardly one for the fainthearted but a speculative buy.