The Investment Column: Goldshield

THE DIRECTORS of Goldshield Group may be a bunch of middlemen selling treatments for sore nipples and diarrhoea, but they have nothing to be embarrassed about. The marketing-led approach of the healthcare and pharmaceuticals group has helped it to deliver per-share earnings growth of 52 per cent, even after a placing to fund the acquisition of a suite of SmithKline Beecham products.

Since coming to the market last year, shares in Goldshield, which picks up products jettisoned by big pharma companies, have more than doubled. The organic sales growth of 60 per cent in over-the-counter products, now 61 per cent of the business, coupled with 14 per cent sales growth in pharmaceuticals posted yesterday, comfortably justified the market's confidence.

Goldshield lacks any single blockbuster. Ajil Patel, chairman and chief executive, prefers to have more rather than fewer products than he can sell. Still, the portfolio is now so widespread he's having to strengthen his 28-strong crack sales team and there'll be an "operational board" beneath the executive. With a basket of 10 SB products entering the group in the next five years and a push into Europe via mail-order, Goldshield's senior appointment spree shouldn't cause concern.

Meanwhile, the group is pioneering innovative marketing techniques, with a second Complementary Health Centre, which sells alternative therapies in London, in the pipeline. The Regina brand, currently restricted to royal jelly, is to be spread to other products.

On analysts' expectations of pounds 9.4m pre-tax profits and 17p earnings per share, Goldshield trades on 31 times earnings. For a company growing so rapidly, that's cheap. The shares, up 23.5p at 536.5p yesterday, are a strong buy.