Investment: Spring waits for the new year

SPRING HAS had a rotten summer. The recruitment and training group - formerly known as CRT - used to be one of the market's favourite growth stocks. But worries about the recruitment industry, combined with plunging stock markets, meant that Spring shares were suddenly out of season. Since peaking in June they have lost 70 per cent of their value. They dipped another 22.5p to 147.5p yesterday.

Not that Spring's trading update contained much to rattle investors. True, the group's general recruitment business is feeling the effects of the economic slowdown, especially in the North. And the vocational training business has been hit by the rule change which keeps potential school leavers in school until July, rather than April as before.

Rather, Spring seems to be burdened by general worries about the recruitment market which investors think will be hit by an economic downturn. Aggressive noises about acquisitions - Spring recently arranged a pounds 50m overdraft facility and has pounds 5m of cash in the bank - also seem to have rattled its shareholders.

These worries look overdone. Spring has a broader spread of businesses than most of its peers, supplying teachers and general staff as well as computer specialists. What's more, it has almost no exposure to the banking sector, where rumours about job losses are strongest.

As for acquisitions, Spring has a record of quickly integrating its purchases. And the recent shakeout may well throw up some interesting bargains - the chief executive, Karl Chapman, is keen to beef up the education division.

On unchanged profit forecasts of about pounds 24m the shares trade on an undemanding forward earnings multiple of just 12. Although Spring may have to weather a difficult winter as worries about the market persist, the shares look a decent recovery play for the new year.