In the last fortnight Healthcare Locums, Morson and Spring have all announced that they are likely to report full year numbers in line with market expectations. In a week when Caterpillar announced it is to cut 20,000 jobs it was a relief to have some good news to reflect upon in the listed recruitment sector.

Healthcare Locums has been the best performing stock in the sector over the past 12 months. In that period its share price has more than doubled, in stark contrast to the rest of the sector which has seen significant falls.

Following a bullish update in December, which was accompanied by analyst upgrades, Healthcare Locums issued a brief follow-up confirming that the results to 31 December are likely to be in line with market expectations. The company is performing strongly in the
UK, where it is market leader in each of its core areas, and has ambitious targets for expansion into the Middle East and North America.

Morson also issued a brief trading update confirming that its results to 31 December 2008 are likely to be in line with market expectations. Similar to Healthcare Locums,

Morson too has a strong defensive position, as it is the leading technical recruiter in both the rail and power sectors, which should benefit from greater public spending. Spring announced it is likely to announce results to 31 December 2008 broadly in line with market
expectations and that year end cash is expected to be around £40m, which gives it a very solid financial footing. While its perm business is facing challenging markets,

Spring appears to be making good progress with its recruitment process outsourcing (RPO) model and has made some big customer ins, including Aviva, which increase visibility into 2009 and beyond.

As we go to press, the large cyclical recruiters Hays and Michael Page have managed to stage a mini rally on the back of support from some of the large broking houses who have moved to overweight.

Michael Vassallo, equities analyst, Brewin Dolphin
Investment Banking