Contractor Willmott Dixon is set to float its support services arm Inspace on the alternative investment market, valuing the business at about £100m
At an extraordinary general meeting held at the end of last month, Willmott Dixon shareholders agreed to the flotation, which is part of the company’s plan to focus on construction and development, especially in social housing.
Inspace, which employs 900 people, has four divisions, but its biggest growth area is Inspace Partnerships, the social housing arm. This was created two-and-a-half years ago and has since secured a large amount of work maintaining housing stock for local councils.
It accounts for about £80m of Inspace’s estimated sales of £130m.
Colin Enticknap, executive chairman of Inspace, is hoping to float Inspace at some point this year. The plan is to raise about £10m from the flotation, which will be reinvested in the company. It will also allow the company to acquire further land for development.
Enticknap said the rationale behind the float was to “unlock potential and create the context where capital does not become a constraining feature of growth”.
If the listing is successful, the Willmott and Dixon families can expect to receive significant sums. The Willmott family owns 65% of the firm and the Dixon family 20%.
Willmott Dixon will retain a 7.5% long-term stake in the listed Inspace business. The firm said this week that it intended to maintain strong links between the two businesses.
We can now move to the second phase of our growth plan
Colin Enticknap, Inspace chairman
The company restructured the board on 1 January as a result of the proposed float. Enticknap, formerly chief executive, has stepped down to take a hands-on role at Inspace. However, he has retained a part-time role at Willmott Dixon by taking over as chairman from Rick Willmott.
Willmott has taken on the chief executive role, becoming the first member of the founding family to tale the helm for almost 40 years.
Willmott Dixon is expected to report a 57% rise in full-year pre-tax profit to £10m, on a £400m turnover. For the half-year to 30 June 2004, pre-tax profit rose 50% to £3.47m.
Enticknap said: “The business has now reached the stage where we can move to the second phase of our growth plan. Five years ago we were profitable, but not profitable enough.”
Seymour Pierce has been appointed as broker and adviser.