Servoca surges thanks to UK teacher shortage

Outsourcing and recruitment services group Servoca said its first-half trading has improved "significantly" thanks to the UK teacher shortage and strong demand for nurses from the NHS and private hospitals.

The AIM-listed group, which is chaired by serial entrepreneur Bob Morton, said that trading performance "has shown excellent progress and results for the first six months will be significantly ahead of the corresponding period last year".

Servoca, which is due to announce interim results for the period to 31 March 2016 on 14 June, said in January that its education and healthcare recruitment businesses had both performed well into the new year, continuing the strong trading from last year.

Operating from regional offices in the UK and one in Melbourne, Australia, the education division supplies school staff ranging from UK- and overseas-qualified teachers to headteachers and deputies, business managers and support personnel.

Having disposed of its doctors business early last year, the healthcare arm focuses on the supply of nurses and is an approved framework supplier to all NHS Trusts as well as supplying private hospitals, nursing and care homes, GP surgeries and other public and private sector bodies.

Broker FinnCap said it was not making changes to its full-year forecasts at this juncture, but was very pleased by the statement, "which should provide more confidence in the shares".

"The shares have drifted over the past couple of months and appear attractive trading on a P/E of 10.1x, a substantial discount to the recruitment peer group average."

Shares in Servoca hit a three-month high of 28p in early trading on Wednesday but by noon were at 26p, a rise of 16% on the day.