WH Ireland has outlined the investment case for recruitment and business group Norman Broadbent PLC (LON:NBB).

The house broker highlights that NBB is a leading specialist in its field of Human Capital Solutions.

“We view its service portfolio mix as innovative, effective and, perhaps, unique. The brand has been built over 40 years making NBB one of the best-recognised names amongst senior-level decision-makers,” it said a note on 23 February.

“The strong brand has facilitated the growth of complementary activities (via the brand ‘halo effect’) and helped drive high levels of cross-selling given the company’s array of relationships with these decision-makers.”

Elsewhere, providing skilled services – research & insight, interim management, leadership consulting and board advisory – has lifted the group’s earnings mix, protecting group’s margins, creating entry barriers, and enhancing cross-selling opportunities, says the broker.

The range of revenues from differing service lines also creates more balance and resilience as well as a hedge against market cycles.

As against traditional service line teams, NBB is now organised around sector or functional ‘Hubs’ meaning the client is better serviced, all service lines are represented, and opportunities for growth via cross-selling are increased.

“While we only have formal forecasts in place for the current year, and hence are not providing a fair value assessment, plausible scenarios clearly demonstrate good potential for fair value upside.

“We note that the company has been successful in obtaining CBILS loans and currently has little or no debt. Accumulated tax losses are an estimated £11.8mln.”

Shares were 5.55p, up 6% today, against 4.95p in the note.

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