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Staffline - Transformational acquisition - eps forecast raised 45% for next year

June 2014

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • STAF
  • Price:
  • 940p
Staffline went into orbit after it confirmed the acquisition of Avanta for a cash-adjusted £45m,  of which £25m is upfront with £20m based on profits over the next two years. To help fund the cash element and ensure bang for shareholders bucks, Staffline has placed 2m shares at 800p to raise £16m and will fund the rest from debt. Directors subscribed for 55,125 shares as part of the placing. Avanta is a provider of employment and welfare-to-work services in the UK. It runs three Work Programme contracts and provides sub-contract work on five others. These contracts all started in mid-2011 and run for seven years. In a single move, the acquisition propels Staffline from a single Work Programme contract to the third-largest p ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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