A lot of FTSE companies are making investors money at the moment. Already this year, some UK shares have risen more than 30%.
Looking for a stock with significant potential? This small-cap company that’s helping the UK government with digital transformation may be worth considering.
A tech stock with momentum
The stock in focus today is Made Tech Group (LSE: MTEC). It’s a leading provider of digital, data, and technology services to the UK public sector.
It came to the market back in 2021 (via an IPO) at the height of the Covid tech bubble. It then crashed spectacularly in 2022 as interest rates rose and investors lost interest in growth companies.
It’s now rising though, thanks to strong growth in the business (as the UK government scrambles to get itself fit for the digital age). Over the last two years, it has roughly quadrupled in price.
Currently, it trades for about 40p. That means a £1,000 investment buys approximately 2,500 shares.
Supporting the government in the AI era
In my view, there’s a lot to like about this company from an investment perspective. For a start, the backdrop looks very favorable.
Today, the company is helping the government adopt modern technology and get itself up to speed digitally. Think better, more reliable data along with artificial intelligence (AI) solutions designed to drive efficiency.
In its recent H1 results, it noted that UK government strategy papers and reviews have consistently reinforced the role of digital, data, and technology in generating better outcomes in public services. It added that, against a backdrop of ongoing fiscal pressure, these priorities remain firmly embedded within departmental plans.
So, assuming that the government doesn’t do a U-turn on its digital transformation plans, Made Tech looks well placed for growth. Note that in its H1 results, it said that it looks forward to sharing the details of contract awards over the coming months.
“AI continues to be a significant focus across government and the public sector, with the potential to drive meaningful improvements in public services, from improved healthcare outcomes to more efficient administration. The successful application of AI depends on reliable data, modern platforms, and robust digital infrastructure, areas in which Made Tech has deep expertise.”
Made Tech Group, H1 2026 results
Strong results
Recent performance has also been very strong. For example, for the six months to the end of November, revenue was up 28% year on year to £27.8m while adjusted EBITDA was up 35% to £2.4m.
Looking ahead, the company said that adjusted EBITDA for the full year is likely to be “materially ahead” of market consensus as contractor mix, utilisation, and operational leverage continue to improve. Note that it had a contracted backlog of £74.4m at the end of the period.
Attractive valuation
One other thing to like is the company’s valuation. Currently, the price-to-earnings (P/E) ratio here is under 20.
As for the price-to-sales ratio, that’s close to 1 (which is really low). So, we have growth at a reasonable price.
It’s worth pointing out that contract awards can be lumpy with this company. In other words, growth in the future may not be linear.
All things considered though, I see a lot of investment potential. I believe it’s worthy of further research.
