Lawyer says launch on AIM

If you have a well-run family construction business, or one specialising in housebuilding, and you want it to grow further then you should go public by joining the Alternative Investment Market.

The call was made this week by John Jackson, partner with Dibb Lupton Alsop, the country's sixth largest law firm.

"There are people with money wanting to invest in such companies," said Jackson. "The interest in housebuilders came first, then more recently in contractors.

"Those who should make the move are the well-run family construction and housebuilder businesses who have survived the recession and are now seeing good profits, yet don't have the capital base for further growth."

While a full Stock Exchange listing might be difficult to swallow for such firms, the requirements of the Exchange's AIM section are less demanding.

A business can come to AIM with no track record, and there is no requirement to put a minimum of 25 per cent of the shares in public hands. Also, the amount of money that needs to be raised is less daunting.

"The AIM market is for young businesses and for family businesses," said Jackson.

"I'd like to see a dozen come forward from this market sector in the next 12 months; that's two from each region of the country.

The tax advantages of AIM have the attraction that, as the law currently stands, if the owners of a company float it and subsequently sell they can enjoy the proceeds free from capital gains.

This ruling could change under a Labour Government - a prospect that Jackson feels could result in something of a gold rush before the new administration has chance to put in place the necessary legislation for change.

For firms planning to step down the AIM route to market, the key document will be the Prospectus/Admission document. This calls for a working capital statement and profit forecasts and since the information will be for public consumption, the firm's directors will be called on to verify its contents.