A McAlpine to demerge; two firms due by 2008

Alfred McAlpine's torrid times have triggered a drastic response as the group's PFI concessions are to be sold as well as its slate division.

And that's only the start, as what's left - now run as three trading operations - will be reshaped to form just two core businesses. Then, once that's done, they will be demerged.

The plan is to have two small divisions of Alfred McAlpine listed separately by spring 2008.

Business Services (BS) will be one of the core businesses to be offered as a stand-alone on the Stock Exchange next year.

Infrastructure Services (IS) and Project Services (PS) will be brought together and put through the demerger process as a single entity.

"The board believes now is the right time to demerge BS and IS/PS to create two separately listed companies," said chief executive Ian Grice.

Grice announced the major shake-up as the group's interim results (six months to 30 June) were unveiled last week.

They show turnover higher at £620m (£550m). Pre-tax profit ran to £13m, with the comparable figure for the previous year being restated: it has been adjusted to £8m.

Turnover in the three trading operations was: business services £250m project services £230m and infrastructure services £150m.

The fourth division, slate, is much smaller with a turnover of just £9m. However, it managed to inflict a loss of £7m and this after running into the red to the tune of £6m in the first half of 2006.

Three infrastructure funds looking to pick up McAlpine's PFI concessions are already moving into the second round of the bid process, while 20 would-be buyers of slate have been on the phone.

Grice said he expected that the sales of PFI concessions and slate will clear the majority of McAlpine's average monthly debt. That figure ran to £80m in the first half.