Despite this, the Staffline share price remains 95% below where it was at the start of 2019!

So, might this penny stock be worth considering, just in case it ever gets anywhere near its previous highs? Let’s take a closer look.

A strong year

Staffline is the UK’s largest recruitment partner, providing 40,000 flexible blue-collar workers per day on average for the likes of Argos and BMW.

The stock jumped this week because the company provided a strong full-year trading update. In this, it said results were “expected to be significantly ahead of market expectations“. That’s never a bad thing to say in an update!

Revenue is anticipated to have risen 11.5% to £1.1bn, largely driven by “a significant new strategic partnership with a leading logistics provider and continued market share growth in the blue-collar sector“.

This partnership helped drive temporary worker hours to a five-year high during the critical Q4/Christmas peak season. 

The other end of the income statement was even better, with operating profit up 28.3% to £12.7m, and pre-tax profit surging 42% to £7.1m. Both figures were well ahead of market expectations.

Furthermore, net debt was reduced to £1.9m from £4.1m. For context, net debt was £68m back in 2019. So the company’s balance sheet is much stronger today. 

Staffline’s scale and reach, combined with its financial strength and high governance standards, ideally positions the business in a market where competition remains fragmented and customers, both new and existing, continue to consolidate their labour suppliers.
Staffline

A very cheap penny stock

The reason the stock trades for pennies today — down from £13 in 2015 — is because Staffline has previously been embroiled in scandals. It was found to have underpaid workers the minimum wage, which led to a fine, significant losses, and complete breakdown of investor trust.

However, the recruitment specialist has worked hard to rebuild itself in recent years. And despite this slowly being reflected in the share price, the valuation remains dirt-cheap.

The forward price-to-earnings (P/E) multiple is a lowly 8.5. Meanwhile, the P/E-to-growth (PEG) ratio here is just 0.3, which is well below the widely used fair value benchmark of one.

There’s also a £7.5m share buyback programme that’s almost completed. This has helped reduce the share count, which ballooned during the pandemic.

Worth a look?

Of course, Staffline operates in a very fragile UK economy, with rising unemployment. So any sudden downturn wouldn’t help the business (or share price).

Moreover, this is an industry where profit margins tend to be wafer-thin, as we can see by the £12.7m in operating profit on £1.1bn of revenue. There’s also no dividend today.

On balance though, I would say this is one of the more interesting penny stock opportunities out there. Staffline is an industry leader, with improving fundamentals and very established relationships with a handful of large companies.

Only one broker follows the stock, according to my data provider. But they have a 60p price target, which is 23% above the current price of 48.6p (on 21 January).

For investors searching for a cheap penny stock with strong turnaround potential, I think Staffline deserves closer attention.

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What might look like a soaring success story today can quickly turn the other direction next week.

So when I saw a UK penny stock that was up almost 100% this year, I was sceptical. However, upon closer inspection, the strong performance appears to be backed by a legitimately well-run business.

So, are there still gains to be made — or did I miss the boat?

A closer look at Staffline

Staffline (LSE: STAF) is a recruitment and training group supplying around 35,000 workers in the UK and 4,500 in Ireland. Its operations are split across three areas: Recruitment GB, Recruitment Ireland, and its training division, PeoplePlus.

Its client base is impressive for such a small company. Tesco, Sainsbury’s, and Bunzl are among the blue-chip firms relying on its services. Competitors in the staffing space include larger players such as Adecco, Hays, and PageGroup, but Staffline has carved out its own niche, particularly in high-volume placement and training programmes.

Strong financials for a penny stock

With a modest £54m market cap and shares currently priced around 45p, Staffline is firmly in penny stock territory. But its financials are much stronger than one might expect from such a small company.

The balance sheet looks healthy, with debt comfortably covered by cash flow. Efficiency metrics are particularly eye-catching, with a 40% return on capital employed (ROCE). That’s far higher than many larger, more established recruiters.

Revenue grew almost 9% in the first half of 2025, while pretax profit doubled. Underlying operating profit climbed 54% — not a bad showing at a time when UK hiring demand is being dampened by higher interest rates and broader economic challenges.

Currently, it doesn’t pay a dividend but I wouldn’t be surprised to see a company of this caliber introducing dividends as it grows.

Risks to consider

Of course, risks come with the territory. Penny stocks like Staffline often have low liquidity, meaning that while shares can soar on positive news, they can be just as hard to sell if sentiment turns sour.

Volatility is another factor. Staffline’s share price swings have been larger than most FTSE-listed recruiters, which could unsettle more cautious investors.

There’s also the policy backdrop. Increases in UK National Insurance obligations could push up costs for employers and potentially reduce demand for staffing solutions. For a recruitment business, that’s a clear risk.

Still cheap despite the surge?

Despite nearly doubling this year, Staffline still looks inexpensive on a valuation basis. Its forward price-to-earnings (P/E) ratio of 12.3 is below the sector average, suggesting there could be more growth to come if earnings momentum continues.

To my mind, the combination of strong efficiency, improving profitability, and a relatively low valuation makes Staffline an intriguing candidate in the penny stock space.

Of course, these types of investments aren’t for the faint-hearted.

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Take Staffline (LSE:STAF), for instance, which has more than doubled in value. Total price gains are 107% since the turn of the year.

Here’s why I think the recruiter is a top small-cap share to consider today.

Strong results

In the context of a weakening domestic labour market, Staffline’s performance has been remarkable. The business — which supplies around 35,000 blue collar staff in the UK, and 4,500 in Ireland — said in May that it continued to enjoy “strong momentum” in the first four months of the year following a robust 2024.

Gross profit was up 6.2% in the period, it said, driven by robust demand for temporary and agency staff. With job vacancies across Britain having fallen every month since mid-2022, that’s no mean feat.

This strength reflects in part Staffline’s great relationships with blue-chip clients in defensive sectors, like Tesco, Sainsbury’s, Bunzl, and Pepsico. In May, Staffline also announced a three-year contract with a “leading food and drink logistics provider” that it said “materially” improves its outlook for the period.

Cheap as chips

Perhaps unsurprisingly, this news alone gave Staffline’s share price an extra dose of jet fuel.

Yet, despite this year’s price gains, the employment specialist’s shares still offer excellent value for money today, at 48p. Earnings are expected to rise 17% in 2025, leaving Staffline trading on a sub-1 price-to-earnings-to-growth (PEG) ratio of 0.7.

This cheapness perhaps reflects the broader state of the UK economy and the threats it poses to recruiters. In the case of Staffline, it’s important to note its large exposure to more cyclical sectors like manufacturing and sales, and what this could mean for short-term profits.

Businesses in this sector also face challenges following changes in last October’s Budget. A rise in both the National Living Wage and employers’ National Insurance contributions could crimp margins and impact demand from its clients.

A top growth share

Encouragingly, however, City analysts expect Staffline’s profits to continue growing at breakneck speed. City brokers are expecting earnings to rise another 51% in 2026, pulling the firm’s corresponding PEG ratio even lower, to 0.2.

It also means the penny stock’s price-to-earnings (P/E) ratio of 12.8 times for 2025 falls to a bargain-basement 8.5 times for next year. While Staffline shares are perhaps high-risk in the current environment, these low valuations provide a margin of safety.

It’s also good to see the business still strengthening its balance sheet, giving it more breathing room to weather an industry downturn. The sale of its underperforming PeoplePlus unit in February gives Staffline — which swung back to a net cash position in 2024 — an extra £6.9m boost.

For investors seeking top penny stocks, I think it’s worth a serious look.

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So far in 2025, the Footise’s been fairly steady, led by familiar heavyweights. Rolls-Royce shares are up an impressive 66%, with only Babcock and Fresnillo ahead among the blue-chips. But dig beneath the surface and there are some tiny UK shares doing even better — and crucially, with more than just a speculative bounce behind them.

Many small-cap stocks racing ahead this year have shaky profits and stretched valuations. However, I’ve found two penny stocks that not only boast strong share price gains but also seem to be trading on reasonable fundamentals.

Staffline Group

Staffline Group‘s (LSE: STAF) a small recruitment firm that supplies workforces to major UK retailers such as Tesco and Morrisons. Given its ties to defensive consumer staples, it’s perhaps no surprise that demand has remained stable.

In May, management reaffirmed it’s confident full-year 2025 results will meet expectations. Investors clearly took notice. The share price has rocketed 102% year-to-date, comfortably leaving Rolls-Royce in the dust.

But this isn’t just a hype story. Under the bonnet, things look reasonably solid. Diluted earnings have grown 20% year on year, while revenue’s up nearly 6% to £993m. Profitability’s still tight — the operating margin’s only 1%, with return on capital employed (ROCE) at 8%.

On valuation, the stock doesn’t look overly stretched, trading at a forward price-to-earnings (P/E) ratio of 13.

However, there are some risks. In particular, recent UK budget changes have increased National Insurance obligations for businesses. These costs could squeeze margins, and in a downturn, big employers might trim staff, hitting Staffline’s core business hard.

SDI Group

SDI Group‘s (LSE: SDI) another under-the-radar winner, up 66% so far this year, roughly matching Rolls-Royce’s gain. The company makes specialist industrial and scientific sensors and laboratory equipment — hardly glamorous, but clearly in demand.

In June, it acquired Severn Thermal Solutions for £4.8m, a move expected to bolster earnings. Profitability looks more than sufficient for a micro-cap, with an operating margin of 11.4% and return on equity (ROE) of 7.7%.

It trades at a forward P/E ratio of 15.3, which seems fair given the growth story, although the price-to-book (P/B) ratio of 2.13 is a touch high. Encouragingly, the balance sheet looks healthy, with debt well-covered by earnings and cash flow.

Still, there are some clear risks. Small firms like SDI often have limited analyst coverage, volatile trading patterns, and depend on relatively narrow customer bases. A single contract loss could materially dent profits.

Digging out gems

I’m a fan of blue-chips, but at times it can pay to look past the headlines — often, the real gems hide where few bother to look. While penny stocks are always risky, these two seem to have some real substance behind the soaring share prices. 

Staffline’s rebuilding steadily, while SDI continues to expand its product reach and tuck-in acquisitions. For adventurous investors looking to diversify into promising penny stocks, I think both are worth considering. 

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However, if savvy investors had bagged Staffline stock at just under 19p in early February, they’d currently be sitting on a 149% gain. Or £24,900 from a £10,000 investment.

Zooming further out though, the Staffline share price is down a staggering 96% since the start of 2019! Ten grand invested back then would be worth just four hundred quid today, even after the stock price surge this year.

Labour outsourcing

For those wondering, Staffline is a recruitment company that specialises in blue-collar sectors. It gets staff in for the likes of Tesco, Morrisons, and BMW. It also has a strategic partnership with An Garda Síochána — Ireland’s national police service — to handle recruitment for a variety of civilian roles.

Looking at the stock, I can see a number of attractive things. Firstly, the price-to-sales (P/S) ratio is just 0.06. At such an incredibly low multiple, I’d expect Staffline to be reporting significant losses. But it’s not.

Indeed, according to forecasts, earnings are expected to jump 50% in 2026. This puts the the stock on a forward-looking price-to-earnings (P/E) ratio of just 8.5. Again, that’s cheap.

Also, it’s encouraging that Staffline has been using share buybacks to take advantage of this. It has acquired 19% of equity over the last 20 months at an average price of 32p, all from trading cash flow.

Another thing worth noting is that Staffline is growing its top line. Next year, it’s expected to report around £1.23bn in revenue, up from £993m in 2024 (14% higher than the year before).

Thin margins and pricing power concerns

On the other hand, I see some key things that I don’t like. There’s no dividend, for one. It axed the payout in 2019 following a string of profit warnings, allegations of minimum wage underpayments, and mounting financial pressure.

This is what pushed the share price — and investor trust in the firm — off a cliff. Not ideal.

Meanwhile, the low P/S ratio means investors are effectively paying just 6p for every £1 of Staffline’s revenue. But that doesn’t convert to much profit because the underlying operating margin is barely above 1%.

The risk with this wafer-thin margin is that if demand weakens or the economy tanks, Staffline’s earnings could quickly take a big hit. There’s very little cushion.

Moreover, clients like supermarkets and logistics firms — which also have low margins — negotiate hard. Consequently, I worry about how much pricing power recruitment agencies ultimately have.

After all, there will always be rivals keen to get into Tesco warehouses. If another agency can supply similar workers at a lower cost, big clients could jump ship.

Therefore, I’m not interested in buying shares of the labour outsourcer myself.

A comeback play

Having said that, Staffline has all the hallmarks of a turnaround story. There’s rising revenue and earnings, coupled with ongoing share buybacks and a cheap valuation.

And after disposing of PeoplePlus for £12m, it has strengthened the balance sheet and has cash to fund organic growth.

Weighing things up, I think the recovery has further to run, so risk-tolerant investors might want to take a closer look at this 46p penny stock.

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Lower prices tend to lead to bigger spreads between buying and selling prices. And that can mean we need a bigger rise to break even. And I try to keep away from companies that are too small, as they so often seem able to go bust in the blink of an eye.

Back to growth?

I took my eye off Staffline (LSE: STAF) and missed a year-to-date gain of 40%+ so far in 2025. A trading update on 4 February revealed a 12.8% rise in full-year revenue, with underlying operating profit up 7.8% to £11.1m.

In what might be key to recovery, the recruitment and training company reported net cash of £3.3m at 31 December, compared to £0.7m of debt a year previously.

The big share price jump came from a disposal announcement on 25 February. The company sold its PeoplePlus subsidiary for £12m in cash (including £2m in deferred consideration). It’s subject to “a deduction of £5.1m of advanced payments received in respect of future revenue”. But the whole deal is expected to add another £6.9m to Staffline’s cash pile.

The main risk I see is that analysts still expect a loss per share for 2024. And the profit they’ve pencilled in for 2025 would mean a price-to-earnings (P/E) ratio of 11. That doesn’t leave a lot for safety. But it might just mark the start of sustained growth.

Full-year results are due on 8 April, and I’ll be watching.

Ready to take off?

I keep coming back to Helium One Global (LSE: HE1) and thinking it could be huge success. Or that it could be a spectacular fail.

It depends mainly on the company’s helium project in Tanzania, with that rare gas being short in supply and high in demand.

So far, the company has a mining licence offer, but there’s further approvals process still to come. It’s been slow progress, and the shares have crashed heavily from the high peaks of 2021.

That often happens with a new start-up that isn’t in profit yet. I often expect to see an early boom and bust before I risk any cash. And if first profits really are finally coming into view, I reckon there could be solid potential here.

But over the past few years, Helium One’s been issuing more and more shares to raise the cash it needs. The share count’s mushroomed 12-fold. And if it needs more money, existing shareholders could be diluted even more.

It’s good to see institutional investors including aberdeen and Barclays owning around half the company. But with the market-cap at £64m, it’s relatively small beer for them.

I’m really on the fence with this one, but it’s on the list.

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Andrada Mining

Digging for commodities can be a problematic and expensive process right from the exploration phase. Junior miners are especially vulnerable to setbacks as they don’t have broad mine portfolios or strong balance sheets to absorb trouble at one or two assets.

But I believe the possible benefits of owning Andrada Mining (LSE:ATM) shares could outweigh the risks. This is because demand for the lithium, tantalum, and tin that it produces in Africa is projected to soar as the electric vehicle and consumer electronics markets boom.

The quality of Andrada’s flagship Uis mine in Namibia also makes the company a great investment in my book. The company has described the asset as “a globally significant lithium and tin resource” and this month upgraded its lithium resource estimates there to 587,000 tonnes. This was up 30% from prior forecasts.

Staffline Group

Recruitment and training business Staffline Group (LSE:STAF) trades on a price-to-earnings (P/E) ratio of just 10 times today. As someone with a great love of value stocks, I’m considering adding it to my portfolio right now.

Recruiters like this can see profits tumble during economic downturns. When company profits come under pressure, hiring activity can freeze. Yet this penny stock’s focus on the more resilient temporary employment market could cushion this blow.

In fact, Office of National Statistics data this week suggests Staffline could remain busy as the cost-of-living crisis endures. It showed 113,000 economically inactive people returned to work between October and November.

Staffline’s revenues could also rise if unemployment increases and demand for its training services increases. A surge in the number of people seeking to change career in this post-pandemic landscape could also fuel income here.

Gensource Potash

Gensource Potash (LSE:GSP) has significant appeal to me as a long-term investor.

The increasing global population means that demand for food is also trekking higher. Furthermore, improving wealth levels in emerging markets is also rapidly boosting consumption for edible goods. This means that sales of potash — a key ingredient in fertiliser production — are also rising.

Encouragingly for investors, Gensource has ambitious plans for its Tugaske potash project in Canada. Late last year the business hiked its production capacity target to half a million tonnes of material a year.

Now there is some uncertainty surrounding financing of the mine’s development. Last month chemicals giant Helm withdrew its 33% ownership offer for the company Gensource has created to run Tugaske (KClean Potash). The penny stock said this was due to “an unappealing risk-return ratio for new investors”.

But I still believe the potential long-term benefits make the small cap a compelling buy. Indeed, the bright outlook for the potash market means sourcing capital from private equity may not be an obstacle.

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The market-cap rule can be flexible, but today I’m looking at three that strictly fit the categorisation. And I’m wondering if any if them might be good to buy in December, and could have a positive 2023 ahead of them.

As a general caution though, low-priced shares in very small companies can be volatile, so there’s extra risk here. I’d only consider buying them as a small part of a diversified stock portfolio.

Helium

Helium One Global (LSE: HE1) shares have been picking up in November.

After getting drilling back on track in Tanzania, the company is aiming for spudding at its Rukwa licence in the first quarter of 2023. So that’s what I reckon could drive the share price as we reach the end of 2022.

Helium has been increasing strongly in price over the past few years, as industry demand has outstripped supply growth. So a positive result might give the stock a boost. Conversely, a failure could send the shares plunging, and drive the company back below its £54m market-cap.

Helium One is also not yet profitable, so there’s added risk there. But I think it could be one to watch.

Real estate

The real estate business is in the dumps. And that makes me think Capital and Regional (LSE: CAL) might make a timely buy.

The real estate investment trust (REIT) invests in UK retail and leisure properties, including shopping centres. And with recession and inflation in double digits, it’s no surprise that the stock has performed poorly in 2022. Following on from the pandemic devastation, we’re looking at an 89% drop over five years.

But dividends were resumed this year after being suspended in 2020. The 2.5p interim for 2022 was only modest, though it’s a start. And the shares picked up in November.

There’s still huge uncertainty facing the REIT market at the moment, and we could be in for a couple more rocky years. But if 2022 has been a time of maximum pessimism, I wonder if 2023 might prove brighter?

Recruitment

Shares in recruitment specialist Staffline (LSE: STAF) have continued their decline through 2022.

The dangers to the business posed by the UK’s economic troubles seem clear enough, even if the first half looked reasonably steady. The firm saw a positive, if modest, underlying profit in the period. That did though translate to a small reported loss. And the balance sheet slipped to £13.9m net debt.

Whether Staffline is a good investment for 2023 will surely hinge on how the second half has gone. And to hear about that, we’ll need to wait for a trading update due on 25 January.

I think it might need bold nerves to take the risk of buying in December. But the share price has been regaining ground of late. And company directors have been buying.

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Robust markets

Staffline Group (LSE: STAF) is admittedly in some danger as the UK economy cools. If breakneck inflation persists and companies struggle then demand for its recruitment services could tank.

That said, I’m encouraged by the resilience of Britain’s labour market so far. And this could still encourage me to buy the penny stock today.

Indeed the Recruitment and Employment Confederation announced this week that, “Demand for permanent staff remains buoyant despite increased economic concerns”. Consumer price inflation hit fresh 30-year highs in April yet companies’ hiring intentions for the short-to-medium term has continued to rise.

“Strong start”

Staffline itself celebrated the ongoing robustness of the UK jobs market a month ago as it described the “strong start” it had made to 2022.

The company added then that while economic uncertainty had increased, its “strong market share in resilient sectors” like food distribution, e-commerce, and logistics helps give it decent earnings visibility.

City analysts believe conditions will remain favourable for Staffline as well. They think the penny stock’s profits will soar 246% year-on-year in 2022. And this leaves it trading on a forward price-to-earnings growth (PEG) ratio of 0.1.

Any reading below one suggests that a stock could be undervalued. At these prices I think Staffline is a steal.

Rewards vs risks

Pub operator Marston’s (LSE: MARS) is another penny stock that could suffer as the cost of living crisis intensifies.

It’s a danger that brewing giant Heineken highlighted this week. On Wednesday it said that it the impact of increasing inflationary strain on household disposable income poses “a consequent risk to beer consumption later in the year”.

In the UK, where all Marston’s pubs are located, inflation is tipped to peak at 8.7% in 2022 by the Office for Budget Responsibility. That could really weigh on drinkers’ budgets.

Another cheap penny stock

Naturally the danger of ballooning living costs to pub operators is particularly high. The cost of a pint or a glass of wine at one of Marston’s inns is far more expensive than what you or I would pay for a bottle at the supermarket to drink at home.

Still, as a long-term investor I’m tempted to buy Marston’s for my portfolio. I think a forward price-to-earnings (P/E) ratio of 9.8 makes it too cheap to miss.

Data shows that Brits continue spending larger proportions of their discretionary income on leisure activities like drinking and eating out. This is an established trend that I think Marston’s will profit handsomely from when those current dangers pass.

City analysts believe the penny stock will continue recovering from the damage wrought by Covid-19 lockdowns, too. They think Marston’s will bounce back into profit this year (to September 2022) following two years of losses and grow earnings 38% in financial 2023 as well.

Protection from rising inflation

I think buying property stocks is a good way to protect myself against rampaging inflation. This is because rents by and large rise in line with broader prices. It’s a quality that not all UK stocks share.

I think Empiric Student Property (LSE: ESP) in particular could be a top buy right now. As well as helping me guard against inflation today, it could make me a lot of cash in the years ahead as student numbers jump and the need for dedicated accommodation increases.

Latest figures from the Higher Education Statistics Agency showed the number of UK students leap 8% in the 2020/2021 academic year. The number of full-time first-year students also grew at the fastest pace on record. These numbers illustrate the massive opportunity for Empiric Student Property.

Chunky dividends!

City analysts are expecting the penny stock’s earnings to double year-on-year in 2022. Consequently the company trades on a forward PEG ratio of just 0.3.

I like Empiric Student Property too because of its healthy dividend yields. These sit at 3% and 4.1% for 2022 and 2023 respectively. I’d buy it despite the threat that Covid-19 poses to student enrolment levels in the near term.

Another dividend-paying penny stock to buy

Speaking of high dividend stocks, Centamin (LSE: CEY) is a gold stock whose big yields make it an attractive investment target. The forward yield here sits at a huge 5%.

There’s a couple of good reasons I think Centamin is a great buy today. The first is that I believe gold prices could be on the verge of soaring again as inflationary pressures grow. Demand for gold rises when the value of paper currenices come under scrutiny.

This week Bank of America said that it expects gold to hit $2,175 per ounce in the current climate. That’s around 100 bucks higher than summer 2020’s record peaks.

Production boost

I also like gold stock Centamin because of the steps it’s taking to boost production over the medium-to-long term. The company plans to deliver 500,000 ounces of the shiny stuff each year from its Sukari flagship mine over the next decade. Centamin is on track to dig between 430,000 and 460,000 ounces of gold from its Egyptian asset in 2022.

Centamin’s a great way to make money from a strong gold price in my book. But of course there’s no certainty that precious metal prices will rise. Rapid central bank rate hiking and a robust rise in the US dollar could send gold prices lower.

However, on balance I think — as a long-term investor — that the benefits of owning Centamin shares offset the risks. I also think its undemanding forward P/E ratio of 12.2 times makes the penny stock a great buy (it’s expected to enjoy a 10% rise in annual profits this year).

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However, they can also come with more risk than larger blue-chip stocks. Unlike their larger peers, smaller companies may not have the checks and balances in place to detect and deal with significant challenges. 

As such, I am not willing to include any old penny shares in my portfolio. I am looking for corporations with substantial competitive advantages and robust balance sheets. 

Both of the companies outlined below exhibit these qualities. I would not hesitate to buy both for my portfolio with an investment of £1,000 today. 

Penny shares to buy for growth

As the UK economy begins to recover from the pandemic, labour shortages are becoming a significant issue for many companies. I think this is the perfect environment for the temporary staffing operation Staffline (LSE: STAF). 

This micro-cap stock has lost over £100m during the past four years. Still, analysts are expecting a profit in 2021 and for 2022. Based on current estimates, the stock is trading at a forward price-to-earnings (P/E) multiple of just 7.7. Management has also cleaned up the balance sheet in recent years. The group now has a net cash position. This gives the company lots of financial flexibility to capitalise on opportunities as they emerge. 

Unfortunately, this is a highly competitive market with razor-thin profit margins. Overcoming these issues will be some of the biggest challenges the company has to deal with going forward. 

Despite these headwinds, I would buy the outfit for my £1k portfolio of penny shares today. 

Consumer demand 

Premier Foods (LSE: PFD) is another company that has been working hard to rebuild itself over the past couple of years. The business made a series of strategic missteps before the financial crisis, and it has taken it more than a decade to return to growth.

With a strong balance sheet and reconfigured pension plans, the establishment is in a better position than it has been for over 10 years to capitalise on growth opportunities.

City analysts are expecting earnings to grow by a double-digit percentage in the 2022 financial year, and further growth is expected in 2023. A key area of development for the business is the international market, where management is investing significant sums to capture market share. 

This is a great opportunity, but it could also be a significant risk. If the company expands too far, too fast, it could be an expensive mistake. This is something I will be keeping an eye on over the next few years. 

Even after taking this risk into account, I would be happy to acquire Premier for my portfolio of penny shares with £500 today. In a portfolio alongside Staffline, I think the company will help me build exposure to two fast-growing sectors of the economy. 

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