Building arm dismantled for disposal by Tarmac

BRITAIN'S second largest home builder is not just being sold, it is being dismantled. Tarmac, the engineering and construction company, revealed this weekend that it will subdivide its house-building division into 16 parts and sell them off piecemeal.

"Emotionally I would like to see the business held together, but realistically it will be sold in bits and pieces," said Neville Simms, Tarmac's chief executive. He admitted, however, that Tarmac might get stuck with a rump of unsellable companies in the building division.

Selling the division as a block would have left a rival for Wimpey - which overtook Tarmac as the country's biggest home builder last year - but a carve-up will leave it a clear field.

The plan explains Tarmac's confidence in its ability to rid itself of the profitable but capital-intensive business for up to pounds 400m, despite criticism from industry observers who said no rivals were big enough to swallow the division.

Pundits considered a management buyout the most likely disposal, with a flotation a remote possibility considering the weakness of the sector.

But Mr Simms said regional builders, as well as at least one financial institution, were already queuing to view the 16 limited companies up for sale. But he cautioned: "It would not be true to say we have a buyer lined up."

Potential purchasers will have to wait at least three months while a prospectus is drawn up. The document will have a separate section for each firm on offer.

Most of the subsidiaries - all based in England except for the one in Paisley, near Glasgow - specialise in four-bedroom detached homes. A dozen of them are called Tarmac or McLean, while the others are Rivermead, Thameswey, Midland & General and starter-home builder Gotheridge and Sanders.

Tarmac's house-building division has been performing close to the average for the industry, which is down 15 per cent in volume from the mid-1980s and almost 40 per cent from the peak of the boom. Last year, Tarmac's division started 6,000 houses.

Mr Simms shrugged off criticism that this is a bad time to sell, saying that delaying the move once directors had decided on a new strategy would not have been in shareholders' interests. If the housing market improves before the sale goes through, Tarmac will benefit, he said. "If not, we'll be glad we got on with it."

Tarmac will invest the money it makes from the sale of its building division, along with pounds 67m it netted last spring when it disposed of its brick-making arm, in its quarying and contracting businesses. However, Mr Simms would not identify individual projects.

The company will also avoid having to rebuild its bank of land when retail prices for new houses are soft. NatWest Securities reported in May that Tarmac was suffering a net cash outflow because of that inventory expansion.

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Gabriel Agbonlahor, Alexis Sanchez, Alan Pardew and Graziano Pelle
footballAfter QPR draw, follow Villa vs Arsenal, Newcastle vs Hull and Swansea vs Southampton
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... with this review
Holly's review of Peterborough's Pizza Express quickly went viral on social media
New Articles
Arts and Entertainment
musicHow female vocalists are now writing their own hits
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam