Try’s shares jumped from 27.25p to 30.5p, a rise of 12% and a considerable premium on last year’s low of 12.75p.
The increase followed speculation that the board was planning to offer shareholders, including fund manager Phillips & Drew, 45p a share for the company. This would value Try at £31m.
If the speculation is true, it could mark a trend towards smaller contractors and housebuilders leaving the stock market. Wainhomes went private after a £88.1m management buyout in March.
A Try spokesperson said: “There have been rumours floating around the City, but the position of the company is that we don’t comment on speculation.” However, one analyst said: “I would bank on a management buyout. The firm may well be saying to itself, ‘rather than having annual general meetings and analysts mauling over us, let’s go private because it would be cheaper and less hassle’.” Another said: “It is the latest in a list of rationalisation movements at the smaller end of the sector. Institutions no longer have an interest in companies of that size.” It is unclear whether the Try family would buy back the whole firm or sell its stake to the management.
One analyst said: “My bet would be that the Try family would exit into the sunset if the rumours are true.” Try finance director Frank Nelson refused to comment and chairman Hugh Try was unavailable for comment.
Try’s pre-tax profit rose 53 % to £3.41m in the year to 31 December 1998, and earnings per share were up 66% at 4.6p. Operating profit from contracting activities rose 30% on the previous year, and the acquisition of Amey Homes in October helped its housebuilding business increase operating profit 63% to £3.59m.
Try said: “We expect our results for the first half of 1999 to show a marked improvement on the previous year and that we will continue to show progress in the second half.” One analyst said: “The contracting business has done a lot of negotiated work and has a pretty reliable, if not spanking, record.
“But it has two problems. One is its size and the other is that the combination of housebuilding and contracting makes it less attractive to investors.”