Strontium in the News

Strontium - Speculative Buy

Key elements are falling into place at professional services minnow Strontium, whose corporate chemistry is being concocted by managing director David Barker. Looking to help clients become more profitable, Strontium is developing a number of services businesses and has its eye on acquiring and integrating further small, high-growth companies.

Strontium made encouraging financial strides during the year to June - on turnover up 50% at £828,000, losses were pared back by 33% to £147,000. The year-end cash balances were improved at £651,000 (£462,000) boosted by a funding this year as well as prudent cash management.

However, the real excitement is happening behind the numbers, with several professional services divisions sporting good growth prospects now in place. Strontium's business intelligence arm has inked a three-year research deal with €750,000 (£520,000) with Toyota Financial Services while prospects at the executive services operation are being reinvigorated. The training arm, augmented by April acquisition of Miad, a historically neglected business specialising in management training for doctors, boasts good growth prospects in the NHS training market.

On top of this is the Strontium Alliance, a network of service businesses meeting regularly to leverage new business contacts. The concept is that smaller members lacking sufficient clout or contacts to win deals with large multinationals should profit from membership, while the alliance should act as a means of sourcing and screening potential acquisitions.

Due to its size and dependence on Barker, loss-making Strontium is not for risk-averse investors. However, given Barker's enthusiasm, a cautious approach to investing cash to date and potential upside from the Strontium Alliance, the shares have compelling speculative appeal.

This article first published in Growth Company Investor, November 1st, 2007

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