Shares digital

Following the group’s announcement of a further acquisition four directors of engineering consultant Hyder Consulting (HYC) sold a total of 180,000 shares ‘in response to institutional demand’. This was not the first occasion when they have done so (Shares, 11 Aug ‘05, Shares 21 Dec ‘06). The group has been transformed since its flotation in October 2002. Profits have grown from £1.5 million in 2002-03 to £14.1 million last year.

The key to this expansion has been a series of sensibly priced acquisitions which have enabled the group to widen its geographical horizons. It is the architect of The Burj Dubai Tower, the tallest building in the world, as well as enjoying a wide range of more mundane contracts in the water, highways, rail and environmental sectors.

The latest acquisition of the Holford business is based in Dubai, and will increase its commitment to the Middle East, where it already generates 22% of its revenues. The deal will be earnings enhancing in the first year. Panmure Gordon is forecasting earnings of 32.1p in the year to 31 March, rising to 38.5p in 2008/9 and 42.2p in 2009/10 placing the shares on a PE of 13, falling below 10 in two years. The broker’s target price is 500p, 20%-odd above the current price.

Shares says: Rating is undemanding in view of the company's record and prospects.

The writer holds shares in this company