Cyril Sweett raises £9m for growth by floating on AIM

Shares in Cyril Sweett, the construction consultant, will be traded on the Stock Exchange next Wednesday. The flotation has raised £8.5m thanks to the issue of a tranche of new shares.

Sweett’s shares have been priced at 110p.

Francis Ives, chairman of Sweett, said he was delighted to be admitted to the Alternative Investment Market (AIM). “The money raised will provide us with currency to make acquisitions both in the UK and internationally.”

Cyril Sweett was founded as a quantity surveying partnership in London in 1928. In the 1980s it expanded into project management. It was bought by Chesterton in 1994 but an opportunity arose for Sweett’s management team to negotiate a management buy-out in 1998 at a price of £7m.

At that point turnover ran to £11m and there were 186 employees. Fourteen acquisitions since that time have fuelled a period of growth and there are now 684 employees.

Sweett’s latest financial results show a £4.6m pre-tax profit in the year ending 31 March 2007, with turnover running to £52m.

Explaining the reason for the placing, the company said: “Sweett has reached a stage in its development where the directors consider that its strategic objectives can be most readily achieved in the public arena.”

The directors say that the UK construction market remains buoyant, with the total workload expected to grow from £113bn this year to £119m in 2009, this higher figure splitting between new work at £67bn and repair and maintenance £52m.

Sweett has issued 9m new shares, taking the total shares up from 37m to 46m.

The group’s existing directors, who hold the 37m shares, will retain 22m of them. They have converted the other 15m into cash by selling them to institutions.

To avoid distortions to the future value of the group’s share price, Sweett’s directors are locked into deals that restrict their ability to bring the balance of shares they hold onto the market.