Contractor sells social housing and speculative arms to its repairs spin-off for £64.5m
Willmott Dixon is creating the first stand-alone social housing business that offers both new-build and refurbishment.
The contractor has sold its social housing arm Willmott Dixon Housing and its speculative development arm Widacre Homes to its repairs and maintenance spin-off Inspace.
Inspace, which is listed on the alternative investment market, has paid £64.5m for the two divisions. Their combined turnover last year was £129m.
The two arms’ 300 staff will transfer to Inspace. This includes Chris Durkin, chief operating officer of Willmott Dixon Housing, and Fraser Wells, Widacre’s managing director. They will continue to run their divisions, reporting to Colin Entichnap, Inspace executive chairman.
Inspace was demerged from Willmott Dixon last year but the contractor retains a 60% stake in the spin-off – which, unlike the contractor, can raise equity through its AIM listing.
Jeff Zitron, director of social housing consultant Tribal HCS, said: “Inspace are reshaping themselves as an all-round social housing provider, building up something like an all-purpose commercial housing association.”
In a stock exchange statement announcing the sale, Inspace said Widacre would use Willmott Dixon Housing as its specialist contractor for the design, cost planning and construction of new homes.
The expanded company will also launch joint ventures with housing associations under the Willmott Dixon Housing and Widacre brands.
But Rick Willmott, Willmott Dixon chief executive, denied that the deal meant the contractor was exiting from the speculative development activity that Widacre was set up to carry out. Since its establishment in 2003, Widacre has signed joint ventures with two associations, Catalyst Housing Group and Circle Anglia, with which it has carried out its only development so far, of 67 units. Willmott Dixon Housing developed 1000 homes last year.
Willmott said the deal was prompted by the government’s decision to change the focus of its Decent Homes programme from stock refurbishment to wide-ranging estate regeneration.
Howard Hughes, Circle Anglia development director, said he was “comfortable” with the change. “We are anticipating that it’s going to be business as usual.”