Paul Massey, chief executive, said one of the reasons for floating the company was to replace pounds 30m of debt with equity. Most of BSM's borrowings were fixed in 1990 at interest rates of up to 16 per cent.
Last year the company's interest bill soared after an initial interest-free period expired, sending it into the red. Operating profits of pounds 4.1m reversed into a pre-tax loss of pounds 528,000 on sales of pounds 21m. In 1991 there was an pounds 810,000 pre-tax profit.
BSM, which started life in a Peckham garage in 1910, taught 120,000 people to drive last year, about 15 per cent of the total. With lessons costing up to pounds 17.50 an hour demand had fallen sharply during the recession from a high of more than 150,000 learners two years ago.
The company uses about 2,000 self-employed instructors, who pay BSM a franchise fee equivalent to the takings from their first 16 hours' instruction a week. There is also an accident repair operation and a training business for the drivers of big company fleets.
BSM recently struck a 10-year deal with Vauxhall to replace its fleet of Rover Metros with 5,000 new Corsas a year.
The management team invested pounds 100,000 in the buyout and will retain 4 per cent of BSM after the flotation, worth pounds 2m if a pounds 50m valuation is achieved.
(Photograph omitted)Reuse content