support services group Peterhouse announced this week that it is planning to demerge its construction business, probably within the next two years.
Executive chairman David Jackson said the decision was made because Peterhouse was unable to grow the construction business while it remained part of the group. The business consists of two brands, Totty Construction and Jackson Building, and is expected to have a turnover of £200m this year.

Jackson said it had not been decided how the construction operation would be demerged, but it was unlikely to be put up for sale because he wanted to "make sure it was put in the right hands". The options would be a stock exchange listing or a management buyout.

He said: "It could become a public company in its own right, but the market conditions would have to be right. Construction is doing well at the moment so I think it would create interest."

He added that he would consider becoming chairman of both the services and construction companies.

A demerger would be delayed until the services division was big enough to stand on its own. This would be after a "major acquisition" in the facilities management sector. Jackson said: "It could be sold in 2002 but not before. But if we do make a substantial acquisition sooner than expected, then we'd have to look at it earlier."

The announcement about Totty and Jackson came as Peterhouse, which is listed as a support services company, announced a 23% jump in pre-tax profit to £6.4m for the six months to 30 June.

Turnover increased 11% to £170.6m. Construction turnover rose 21.5% to £72.4m, and services turnover was up 5.2% to £107.2m.