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Conchango

1 (low)-5 (high)

Management: 4

Market: 4

Product: 4

Financial strength: 3

TOTAL SCORE: 15/20

IT consultancy firm Conchango is set to join Aim next week following a reverse into Plus-listed investment cash shell Harrier Group. After flotation it intends to pursue an acquisition strategy and believes the Aim listing will help its progress. ‘One of the main reasons for getting on to Aim is it gives us currency with which to make acquisitions, and gives us the flexibility to deal using cash or shares,’ says joint managing director, Richard Thwaite. The company already has its eyes on a number of targets although he says the first acquisition it makes is most likely to be a cash-based purchase. It is not raising any money on flotation but Thwaite admits that his ambitious growth plans for the company mean this is not ruled out in the future, but he wants to establish the company on the stock market first.

It has no intention, however, of adding other sectors to its consultancy offerings. Conchango focuses on retail, media and entertainment, financial services and energy and natural resources, and already boasts blue chip clients, including Vodafone (VOD), BP (BP.), Tesco (TSCO) and Barclays (BARC). Thwaite says its important that the company is well known for its expertise in these areas and that despite fears about an economic slowdown its markets remain robust. ‘The great thing is that we are working in the most exciting part of technology as the web is getting bigger and bigger,’ he says, adding that clients constantly need to update their web offerings.

Its wide range of customers also protect it from individual client company and sector recession it says. Conchango was formed in 1991 and employs over 300 staff. It is profitable and generated revenues of £30 million in 2006, up 50% on the previous year. Thwaite will own 34.1% of shares after the flotation, as will fellow managing director Michael Altendorf. It is expected to have a market capitalisation of around £35 million on flotation.