Éas Allen retreats from big builders

Allen Group has put its housebuilding division up for sale to fund expansion of its more profitable hire business.

The division sold 532 units last year at an average £80,000, and achieved a 10% margin. However, it is struggling to keep up with larger national builders, according to Ken Fox, chief executive: "In housing we're hit both ways: we're not getting the same discounts as the national housebuilders when buying; and when selling we're not getting the same prices for our equivalent houses as a national builder. We lack a recognised name."

Fox said that on purchases of basic items such as kitchen units and bricks, Allen was offered discounts 2-3% poorer than those negotiated by larger housebuilders.

The housing business, which has a two year land bank, could fetch around £25m, and has already attracted interest from rival housebuilders.

Fox said: "We have already had talks with interested parties and are still having talks with a number more."

Most of the sales proceeds will be use to expand Allen's Speedy Hire business. Allen has a national network of 154 depots, and is the country's third-largest tool hire player, closing the gap on HSS (280 depots) and Hewden Stuart.