Amey Group seeks pounds 10m to expand construction

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The Independent Online
THE PLANNED flotation next month of Amey Group will raise pounds 10m of new money and value the UK's sixth-largest road builder at about pounds 50m.

Amey comes to the market five years after a pounds 6.2m management buyout from Hanson, which acquired the company as part of its 1989 takeover of Consolidated Gold Fields.

Close Securities, which provided funding for the MBO, plans to sell shares worth pounds 10m at the time of the flotation. The issue will be priced on 2 June.

Amey's biggest division, providing more than 80 per cent of profits, builds roads for the Department of Transport and carries out work at civil airports and for the Ministry of Defence.

The public sector provided three-quarters of last year's turnover, and Amey believes that despite well-publicised cuts, spending on roads will remain above pounds 2.3bn for the next three years, substantially higher than in the late 1980s.

Other divisions include a general building arm, a facilities management business and a small housebuilder.

With no net debt to pay off, Amey plans to use the proceeds to expand its building and homes divisions and invest in construction plant.

Neil Ashley, chairman, said Amey would be in a stronger position to supply customers with performance bonds, increasingly demanded insurance against companies failing to complete contracts.

Profits in the year to December were flat at pounds 2.2m after an increased loss from a discontinued mechanical and electrical engineering subsidiary. Continuing operations increased profits from pounds 3.4m to pounds 4.7m.

Pillar, the latest in a string of property sector flotations, said it intended to come to the market in summer for about pounds 175m.

As at the end of March its portfolio of 25 properties was valued at pounds 330.4m. Annual rents amount to pounds 23.7m from mainly FT-SE 100 tenants including Barclays, BT and Tesco.