Was rather bearish on tech stocks up to about a month back, but for sure the markets seem to have weathered the spring and summer storm and are starting to look intertesting again.

Compel Group as a leading market position in short term IT rental and enterprise solutions. Yesterday it released some cracking results which are summarised below.

The Highlights:

Compel returned a strong performance for the year, continuing to
outperform its competitors

Substantial improvements in turnover and profitability

- turnover increased by 20% to 63 million

- operating profit, before exceptionals and goodwill amortisation, improved
by 140% to 1.2 million.

- after exceptionals and goodwill amortisation, Compel returned an operating
loss of 0.5 million (2003: operating loss of 1.5 million).

Markets have stabilised during the year; the decline in IT expenditure
levels has halted and, in some areas, is showing evidence of increases

Two acquisitions during the year, Syscap and Sysao, strengthened the
Group's already leading market positions in short term IT rental and
enterprise solutions

The outlook and prospects for Compel are very good and better than they
have been for several years



CHAIRMAN'S STATEMENT

I am pleased to report on a strong performance by Compel for the year to 30 June
2004.

The Group achieved substantial improvements in turnover, which grew by 20% to
63 million, and operating profitability, which improved by 140% to 1.2
million, before exceptional costs and goodwill amortisation. Operating loss,
after exceptional costs and goodwill amortisation, was 0.5 million (2003: loss
of 1.5 million).

Two acquisitions during the year, Syscap and Sysao, strengthened our already
leading market positions in short term IT rental and enterprise solutions. Both
have been successfully integrated into the Group and are performing to
expectations.

After a number of years of uncertainty, it is encouraging to report that our
markets have stabilised over the last 12 months. The general decline in our
clients' and potential clients' expenditure levels drew to a halt during the
period and, in some areas, we are seeing evidence of increases. Our businesses
do not rely on substantial market growth - they have, as in previous years,
outperformed our competitors and increased their market share - but improving
conditions will clearly be to their benefit and increase their speed of growth.

None of this good progress would have been possible without the consistent
excellence of our employees. They have as always seized the opportunities
available to us with drive, aggression and commitment. On behalf of the Board I
express my thanks for their hard work.

Our markets are now stable and sales momentum is healthy. The increasing
emphasis on value-added solutions and services, coupled with our operational
leverage, gives us scope to target improvements in operating margins. We believe
that the outlook and prospects for Compel are very good and better than they
have been for several years.

Sir Michael Bett
Chairman.

Fundies

Share price is very near its nav per share, the market cap being circa 24.7 million versus NAV at 20 million.

Cash balance is a positive 6.4 million and the company have been generating good cash flow over the last 6 months.

EPS were 3.6p above forecasts of 3.2p

Historic P/E of 22 (low for the tech sector)

Forward forecast P/E of 13 based on EPS of 5.6p.

Conclusion,

You can buy the shares today for around 93p, I like the look of this one and it appears to have a high Beta. Contract wins through the second half and improved trading should move the share price northwards.

Please DYOR

Excelent, cheers mate.

GF.