Stocks to Double in 2006 - we name them

And the second on my list from the RECRUITMENT SECTOR would be a nice little company called -

STAFFLINE - STAF (Mid Price 88p)

Turnover for the first half rose by 19% to £26.4 million (2004: £22.1 million).
Operating profit increased by 16% to £991,000 (2004: £858,000). Pre tax profit
rose by 40% to £694,000 (2004: £494,000).


PRESS/TIPSHEET COMMENT

GrowthCompany Investor snippet - 14/09/2005
"15 new OnSite locations were opened in 2005, with Staffline securing contracts with the likes of Sainsbury's, Inter-Link Foods, Northern Foods and Del Monte. This, and growth in other areas, enabled it to boost profits 40% to £0.7m on sales up 19% to £26.4m. Net debt was £8.1m, although interest payments were covered more than three times by earnings. Following the array of contract wins, 70 per cent of the group's business is now in the food industry and no one client represents more than 10% of sales. For the full year, the expectation is for profits of £2.3m on sales of £58m. The forecast earnings target of 8.2p puts the shares on a forward p/e of 12.7.Worth a flutter."

Aim/Ofex Newsletter - Sept 2005
ORIEL Securities said that Staffline’s recent upbeat AGM statement was encouraging and reflected the group’s decision to focus on sectors such as food production – which now accounts for more than two-thirds of group revenues.
Staffline said that trading for the first four months of the year had been in line with expectations and significantly ahead of the same period last year. This, believes Oriel, is thanks in part to the food production sector being less
cyclical than markets such as manufacturing or logistics, where there is a degree of dependence on consumer spending.

Oriel said that the AGM statement suggested that the new OnSite Staffline locations announced in March are performing well and there remains continued momentum in the pipeline of OnSite prospects. The broker believes that the OnSite model remains highly scalable and it says it is well placed to capture a larger share of the market both through expanding its existing customer relationships as well as winning new customers.

Meanwhile, Oriel believes that gross margins have remained robust, and that Staffline’s Techsearch business has continued to see increased levels of demand.
The shares (currently trading on a prospective price-toearnings rating of around 13 times) have significant upside potential, according to Oriel, which is forecasting 20%-plus earnings growth between 2005 and 2006.

Hemscott Article Snippet 06/09/2005
Nottingham-based Staffline was floated last December so comparisons with the first half of last year are on a proforma basis. They show turnover up 19% from £22.1m to £26.4m and pre-tax profits up 40% from £500,000 to £700,000. There is a maiden interim dividend of 0.7p, which is covered more than three times by earnings of 2.3p a share.

The intention is to maintain a progressive dividend policy although we are likely to see the payout heavily covered until the company is more firmly established. One interesting aspect of Staffline is its growth of on site locations where its own staff are based at the client's premises rather than at a Staffline branch. Not only does the client get a dedicated service but the arrangement works out cheaper, since Staffline does not incur rent and rates. Also if the manager leaves he or she cannot take away the business, as tends to happen in traditional recruitment businesses.

Staffline now has 50 OnSites locations, having added seven in the first half and eight already in the second half of 2005. Their margins are lower, typically around 14% as opposed to more than 20% for staff supplied through traditional offices, but that is not important since costs are lower.


RECENT DIRECTOR BUYING

The Company has today been informed that John Crabtree, a Director of the
Company has today purchased 18,750 Ordinary 10p shares in the Company ("Shares")
at a price of 106.75 pence per Shares.

The Company has today been informed that Carole Harvey, a Director of the
Company has today purchased 22,800 Ordinary 10p shares in the Company ("Shares")
at a price of 86.5 pence per Shares.


Not a particularly risky play, but could see some nice recovery in the share price through 2006 - current share price back towards its initial low, coinciding with its float price of 12mths ago and looks set to run back above 100p in the short term. And if busines remains robust could retest highs and move higher through 2006.

Now I had better go and find some more speculative plays in a more lucrative sector just so I get to post something in the multi bagger region... :)