Buy-out goes ahead

The £23m management buy-out of Peterhouse's Propencity division, comprising Totty, Jackson and Dean & Bowes, has finally gone ahead.

The construction and development group will have an annual turnover of about £230m and will continue to use its three established brand names: Totty in the north; Jackson in the south; and Dean & Bowes, the fit-out contractor in Cambridgeshire.

The MBO team, led by Propencity managing director Phil Brierley, is backed by the Bank of Scotland. The deal went through last Friday (3 January). Brierley has assumed the role of chief executive of the group, Terry Cook is marketing director and Richard Jones is finance director.

Peterhouse put Propencity up for sale earlier last year when chairman David Jackson announced the division was becoming a drain. "It's a cash user, rather than a cash generator," he said when announcing the group's interim results in September.

Propencity's pre-tax profit slid to just £370,000 on a reduced turnover of £53m in the first six months of 2002, but Jones pointed to a pre-tax profit of £6m in the previous full year.

Jackson said: "Historically it has done [margins of] 3% net and I see no reason why it can't get back to that figure."

Propencity acquired Dean & Bowes at the end of September.

Brierley said: "We know we have quality businesses and excellent teams of people and the management buy-out will allow us to achieve our strategy of becoming a balanced property and construction business.

"Last year was one of consolidation and re-structuring, which led to reduced profits in the first half.

"However, we performed well in the second half and that, combined with record order books, gives us tremendous optimism for the future," he said.