Contractor Willmott Dixon is set to float its support services arm Inspace on the alternative investment market later this month, valuing the business at about £85m.

The flotation is part of its plan to focus on construction and development, especially in social housing. It will allow the company to raise extra capital to help with expansion and buy more land for development.

Colin Enticknap, who was appointed executive chairman of Inspace after 12 years as chief executive of Willmott Dixon, said the flotation on AIM was an “instrumental step in helping to unlock our growth plans”.

“We want a strong balance sheet because a strong covenant is so important,” he said.

Inspace was demerged from Willmott Dixon at the end of last year. It employs about 1000 people and turned over £107.3m in 2003 on the back of social housing. It made a pre-tax profit of £6.3m in the year to 31 December and had a £300m order book.

The Willmott and Dixon families are to get significant sums as a result of the flotation, but the company will retain a 7.5% long–term stake.

Enticknap said that the operational side of the business would not change.