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Professional services provider MHA (LSE:MHA) joined the UK’s AIM stock market in April. That alone is significant given how few companies have been listing here in recent years.
Since its debut, the share price has gained 30%. The company has quickly caught the attention of investors hunting for new growth stories in the UK small-cap market.
MHA operates in the business services sector. It provides accountancy, tax, and advisory services for small to medium-sized businesses and growing enterprises.
This sector is fiercely competitive, with peers such as Begbies Traynor Group operating in similar areas. MHA focuses on combining traditional accounting with digital solutions tailored for modern businesses.
Growth and value
However, MHA caught my eye after Chair Rakesh Shaunak appeared on Bloomberg TV on Wednesday morning. After further inspection, it’s clear that MHA’s forecasts and valuations are rather attractive.
Net sales are forecast to rise from £224m in March 2025 to £257m by March 2027. Earnings progression is also clear. Earnings per share (EPS) are expected to hit 8.5p in 2026 and then rising to 9.8p in 2027.
With that in mind, the price-to-earnings ratio moves from 15.6 times in 2026 to just 13.6 times in 2027. Meanwhile, the price-to-book is set to fall from 5.64 times to 4.65 times over the same period.
Strong balance sheet
The above valuation metrics are great, but investors need to look at the balance sheet. And thankfully, MHA’s balance sheet looks really strong. The forecasts suggest a net cash position of £18.7m at the end of 2025, falling to £16.5m in 2026 before rising to £27.6m by March 2027. The fluctuations may reflect the desire of the business to grow, potentially through acquisitions.
And this strong balance sheet also allows the business to deliver an attractive dividend. The dividend per share is forecast to be 5.1p in 2026 and 5.5p in 2027. This equates to dividend yields of 3.83% and 4.14% for 2026 and 2027, respectively. These rates compare well with many of its AIM-listed service sector peers.
The bottom line
MHA has set ambitious medium-term goals, aiming to break into the UK’s top 10 accounting and professional services firms, with aspirations for over £500m annualised revenue and entry into Europe. Its decision to pursue an IPO rather than a private equity buyout also allows targeted investment in technology, AI, and bolt-on acquisitions. It could be an exciting period for the firm.
However, macroeconomic challenges require acknowledgement. The UK economy is forecast to be sluggish, with GDP growth below trend and persistent inflation weighing on margins and client demand. Tax increases and subdued business investment also pose risks. The current, challenging economic situation shows no signs of abating.
Nonetheless, this is a stock I’m going to add to my watchlist. The growth trajectory looks positive and the forecasted dividends are appealing. It arguably deserves more consideration from investors.
