Styles & Wood flags up possible sale to private equity buyer

Styles & Wood, the fit-out group that has suffered badly in the recession, is considering a potential sale to a private equity group.

With shares worth very little, Styles & Wood (S&W) is also “exploring options to strengthen its balance sheet” which might involve existing shareholders being asked to stump up more cash to buy new shares.

In recent months, S&W has made a push to increase its working capital.

A ray of good news is that once the group’s financial accounts for 2008 surface there won’t be any exceptional items.

Also, underlying trading since the year-end remains in line with management expectations.

The former management team who loaded the balance sheet with debt have gone and the new management team, lead by chief executive Ivan McKeever, took over in June 2008.

Since then S&W’s customer base has remained intact.

McKeever’s swinging of the axe to cut costs is in line to produce annualised costs savings of in excess of £4m.

Currently the group has an order book of £77m.

S&W’s bank is not thinking of pulling the plug and is reported to “remain supportive of the business and the above process”.

Stock Exchange rules mean that S&W is now in an offer period as set out under the code on takeovers and mergers.

“There can be no certainty that either an offer will be made, nor as to the terms on which any offer may be made for the company, or that it will be successful in raising any additional equity capital,” said a statement from S&W this morning.