Chesterton plans to raise pounds 5m in float

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CHESTERTON International, the property consultant, plans to raise pounds 5m of new money when it comes to the stock market later this month with an expected market capitalisation of about pounds 50m, writes Tom Stevenson.

The company has forecast pre- tax profits of pounds 5.1m for the year to June 1994, a 34 per cent increase on last year, putting the shares at a discount of almost a third to its quoted rival, DTZ.

Along with Jones Lang Wootton, the two are the leading firms of UK surveyors, although their approach to the property market through the recession has been markedly different.

In its pathfinder prospectus, issued yesterday, Chesterton emphasised the advantages of its decision to build up a regional network, which now has offices in 15 cities outside London.

The company has also concentrated on advisory and management services, which provide steadier income streams than deal- driven agency work when the property market is weak.

As a result profits, which reached pounds 4.4m in 1991, only fell to pounds 3.6m in 1992 before bouncing to pounds 3.8m last year.

DTZ's profits fell from pounds 4.1m to pounds 1.6m, recovering to pounds 2.9m in the same period.

After the flotation - an institutional placing with no public offer - employees will hold 50 per cent of the shares, down from 70 per cent currently. Former employees will reduce their stake from 30 per cent to 10 per cent with the remaining 40 per cent in public hands.

The 60 senior employees have said they plan to sell just 11 per cent of their holdings, raising between pounds 20,000 and pounds 100,000 each.

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