Select shares soar on strong growth

SELECT APPOINTMENTS, the fast-growing temporary recruitment specialist, continued its good run with yesterday's strong first-quarter figures, reflected in a soaring share price.

The shares closed up 37p at 837p after the group unveiled pre-tax profits of pounds 14.2m for the three months to 31 March, a 39 per cent rise on the previous year.

Analysts welcomed the results, particularly praising the group's 22 per cent organic growth rate. Six acquisitions have also been made this year, leaving Select with 68 new offices around the world and a foothold in two new markets, in South America and Finland.

Tony Martin, chairman, put the performance down to the company's diverse structure which he said would also serve to insulate it from the threat of economic downturn.

"Our solid performance is down to the way we're structured, dealing with 18 sectors in 25 countries. Diversity eliminates risk," he said.

Around 40 per cent of the group's business comes from IT recruitment, though Select also covers accountancy, healthcare and teaching.

Mr Martin added that structural changes in the workplace favoured both the growth of temporary work and the type of specialist business on which the IT-orientated group focuses.

"Worldwide this is a pounds 64bn business, growing at a rate of 14 per cent every year. Six years ago it was only half the size. People now plan for a flexible workforce," he said.

David Greenall, an analyst at Credit Suisse First Boston, said: "There is a trend towards this kind of work and we've seen deregulation of the sector in Europe. These companies will grow even in bad economic conditions."

Analysts forecast full-year pre-tax profits of pounds 77.2m which puts the shares on a forward multiple of 18. Good value, analysts say.