Really Pleasant Surprise this morning....

....from a stock that I wrote up towards the end of last year as a Really Puzzling Share. This featured the picture below

which was taken from their report accounts and shows the growth in their dividend over the years. I said it was puzzling because here is the share price since the year 2000.

When I wrote it up in December I highlighted the fact that they said two thirds of their underlying profit is earned in the global energy and associated energy infrastructure markets. Given the fall in the oil price in the second half of last year and the likely cut backs in capital expenditure on the back of this I feared that their profits might suffer.

However today, we have had the really pleasant surprise as RPS Group has put out an announcement about their 2014 results in which they say the results will be towards the top end of market forecasts. They go onto say:

"Despite the steep fall in the oil price since June 2014, our Energy business, which represents about 40% of Group fee income, grew its profits significantly in the second half compared with the first half of the year.  This was without the benefit of acquisitions and reflects the resilience and long term nature of this business resulting from its broad range of clients and services, as well as its geographical diversity."

So they are suggesting that their oil related business is more resilient and longer term than I had feared, although I guess it could still mean they see a down turn but this might come through later if the nature of their work is longer term. Aside from that they completed several add on acquisitions last year and flagged up a couple more that they expect to complete shortly.

On the back of this they also stated that they believe that the Group will have another successful year in 2015 and will deliver further growth. So with this years forecasts of 21 pence of earnings and an 8.5 pence dividend and at the current 188 pence share price this leaves them on a cheap looking 9x with a 4.5% yield as the company seem to be offering a more resilient performance than I and the market seemed to be expecting.

Forecasts for the current year currently take the rating down to around 8x with a 5%+ yield. So on that basis, plus the fact that it is in the top decile of the Compound Income Scores and it is looking very oversold, it looks an attractive contrarian value buy down here, but of course don't take my word for it and do your own research.