Investment: IT explosion boosts Spring

Investment: IT explosion boosts Spring

FOR THE past five years, Spring Group has been growing single-mindedly. Since 1993, the recruitment specialist, which changed its name from CRT earlier this year, has increased its turnover and profits almost fivefold thanks to a string of aggressive acquisitions and a booming market.

Last year pre-tax profits - boosted by eight bolt-on buys - rose 50 per cent to pounds 18.1m while turnover was up 46 per cent to pounds 279m. Most of this growth was due to the explosion in demand for IT engineers, with profits in the division more than double last year's levels.

Spring maintains that just a fraction of the increase was due to the millennium bug and the introduction of the euro - two of the usual suspects for the IT recruitment boom. Instead, the group insists that most of the advance was due to firms moving towards more sophisticated IT systems.

However, this is partly a knock-on effect of the millennium bug, and it is worth asking whether Spring's IT recruitment will hold up after the year 2000.

Even though the group reckons demand will remain strong, a slowdown from the present heady growth rates is almost certain and yesterday's 16p fall in the share price to 343.5p reflects the market's worries about the end of the bonanza.

However, Spring is not just dependent on IT. The group plans to expand its educational and general recruitment side through acquisitions. Provided that it does not overpay, this should give it a more balanced