City Technology detects windfall

Two academics who bought their technology business from London's City University three years ago, are set for a multi-million-pound windfall when the company comes to the stock market in June.

John Finbow, 50, and Bryan Hobbs, 55, co-founded City Technology in 1977. It has since grown into a leading designer and maker of gas sensors such as those used by miners to detect dangerous gases.

When the company comes to the stock market with a valuation of around pounds 80m, their combined stakes will be worth pounds 12m. They will be selling pounds 3m worth of shares though will retain a sizeable stake.

Mr Finbow has a 14 per cent stake in the company while Mr Hobbs has 7 per cent. Though the stake would be worth almost pounds 20m, some of this will go to reduce the company's debts.

City Technology was originally set up at the university to work on a mine safety project for the National Coal Board. In 1993, Mr Finbow led a pounds 24.5m management buy-out of the company backed by venture capital group 3i. City University sold its entire holding so will not benefit from the flotation.

The listing will take place via a placing with institutions and is being sponsored by Cazenove, the stockbroker.

The City Technology gas sensors are used in safety monitoring such as those used by miners and other tunnel and sewer workers to detect gases.

They are also used to monitor emissions from chimneys for the purpose of fuel conservation and to help ensure compliance with government regulations. The company's current rangecan detect gases including Oxygen, toxic and flammable gases.

Sales have grown from pounds 5m in June 1990 to pounds 14m last year. Operating profits have grown from pounds 1.3m to pounds 5.8m in the same period.

As sensors have a finite life, replacement sales account for around a third of turnover.