26 August 2011 – sale of compliance division

The company has completed the sale of its Compliance Division for gross consideration payable at completion of £3.85m , which is likely to result in net cash of £3m being received after adjustments.  The services offered by the Compliance Division were the consultancy based provision of Health & Safety advice and the provision of Water Treatment monitoring and legislative compliance with water related legislation.  Net assets of the divested businesses as at completion were approximately a negative balance of £300k prior to consideration related adjustments to working capital.

The disposal was seen as sensible as the Group is not of sufficient scale to fund the development of two divisions by acquisition and has therefore elected to concentrate resources on the growth of the Building Services division.  The disposal leaves the Group in a much stronger financial position which should help further business wins and improve customer service levels.  We rate the shares as a LONG TERM BUY.