Lack of interest from third generation of the family running the business prompts move to sell
Surrey housebuilder Croudace Homes may sell itself to a rival because the third generation of the family that runs the firm does not want to take it on.
Shareholders in the company, which has been controlled by the Brotherton-Ratcliffe family since it was founded in 1946, ordered a wholesale review last summer and a decision is expected next month.
Chief executive Andy Yallop said: “The interests of the third generation lie in completely different areas, like art and sport, and they are not interested in becoming involved in the running of the company.”
PricewaterhouseCoopers is advising the firm on its options and the group has opened talks with all the major housebuilders about a sale. Yallop said: “We talked to the majors because I want to maximise value for shareholders.”
The three shareholders, AB Ratcliffe, DCB Ratcliffe and JM Brotherton, have been repaid for the £15.1m of loans they made to the company and it has been forced to seek a bank loan of £8.5m for the first time.
We talked to the majors because I want to maximise value for shareholders
Andy Yallop, Croudace
Although Croudace said the outlook for the housing market was not good, it denied the move has been prompted by the credit squeeze. “That’s as far from the truth as you can get,” said Yallop.
He conceded that it was not a good time to go to the market. “It’s a difficult time to be doing this but we are a quality business and people will always look to quality in difficult times. But it may be that the shareholders decide not to sell.”
One analyst said the downturn meant times were tough for smaller outfits but agreed Croudace was not in financial difficulties. “The balance sheet is healthy and the fact it is building houses in the South-east counts in its favour.”
What’s up for grabs
Year to 31 December 2007
Pre-tax profit £32.6m (2006: £9m)
Turnover £98m (£94m)
Completions 318 (328) private sales at an average price of £280,000 (£270,000) and 76 (57) dwellings for housing associations at an average price of £115,000 (£97,120).