SHARE PUNT OF THE WEEK

PRICE: 189.5p

WHO IS IT? Xafinity provides advisory, compliance and administration services to final salary pension schemes.

It also provides reports, communications and manages payments for more than 585,000 pension scheme members.

Although Xafinity was founded more than 40 years ago, it didn’t float on the stock market until February last year. It has 900 staff in 15 locations.

WHAT’S THE LATEST? It bought the consulting, pension administration and investment businesses of Punter Southall Group for £153m. Xafinity says the deal has created the largest pure pensions consultancy in the UK.

WHO BACKS IT? Xafinity’s list of shareholders reads like a who’s who of the investment world. Asset management giants such as Blackrock, Schroder, Invesco, Threadneedle and French insurer Axa all have stakes in the Reading-based firm. WHY SHOULD YOU INVEST? Savers have seen the value of their shares rise by more than a fifth in the 11 months since Xafinity floated. On top of that, the company increased its profits by 188pc to £4.9m in the six months to September 30 after adding five clients.

Russ Mould, of stock broker AJ Bell, says: ‘What Xafinity does might not sound exciting but the need for this type of service is there and Xafinity fulfils it.

‘Not only that, but it has good recurring earnings, which are growing pretty consistently, and its clients tend to stay put, which is good for a company.

‘It has gone under the radar so far but it will be an interesting firm to watch and should be a steady burner, without causing fireworks.’

… AND WHY YOU SHOULDN’T Experts say Xafinity needs to be careful that the purchase of three businesses from Punter Southall doesn’t hold it back.

Mould adds: ‘Big acquisitions can always go wrong. The biggest challenge for the directors is to keep their eye on the day job while they integrate the staff and the businesses.

‘With firms such as this, the people are the biggest asset. So the challenge will be to keep the new staff happy and willing to stay.’