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Staffline - 40% upgrade to next years eps forecast to 104.3p

May 2015

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:
  • 939.5p
The shares went up 150p after Staffline surprised the market with the acquisition of A4E for £34.5m, funded entirely in debt. We say “surprising” because the acquisition comes before the election and Labour has been critical of Work Programmes in the past. The acquisition looks an absolute steal on barely 2.5x EBITDA. In Staffline’s hands the deal could work out even cheaper, with a variety of synergies (back office and compliance).A4E is the second largest Work Program provider and holds 5 prime contracts and 5 sub-contracts. It also runs other long term contracts, e.g. for The Skills Funding Agency and the Ministry of Justice.  Post the acquisition, Staffline becomes the largest prime contractor for t ...

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