19th Oct 2006 07:01
Gleeson(M J)Group PLC19 October 2006 Thursday 19 October 2006 M J GLEESON GROUP PLC £36.0m disposal of Engineering Division As an important part of the implementation of the Group's strategic review,which is now nearing completion, Gleeson announces the disposal of itsEngineering Division+ to Black & Veatch Corporation, a US-based globalengineering, consulting and construction company, for a cash consideration of£36.0m. The Engineering Division is an engineering services business predominantlyinvolved in delivering water-related construction through alliancing with waterbusinesses. Its main office is situated in Leatherhead, Surrey and it operatesthroughout England and Scotland, with 950 employees working out of sevenbusiness units. The Engineering Division assets generated an unaudited operating profit of £2.8min the year to 30 June 2006. As at 30 June 2006, the Engineering Division hadgross assets of £40.1m, including net cash of £21.1m. The disposal has resulted in a cash balance transfer to Black & Veatch of £14.5mto zero the negative net assets (excluding cash) of the Engineering Division atcompletion, subject to any completion accounts adjustments. Hence, the net cashinflow to Gleeson as a result of the transaction is £21.5m (before tax andexpenses), which will be used to reduce its indebtedness. The Division is led by Tony Collins, 50, who has 28 years' service with Gleeson.He became Divisional Managing Director in October 2001 and oversaw theDivision's highly successful Asset Management Programme 4 strategy, whichresulted in all existing AMP3 Alliances (with South West Water, Thames Water andYorkshire Water) being renewed and two new Alliances (with Severn Trent Waterand Northumberland Water) being added. In addition, in 2006, the Division agreedan extension to the existing Quality & Standards 2 Programme with ScottishWater. Tony is ably supported by his leadership team, comprising Commercial DirectorCharlie Boyle and Executive Directors Steve Miller and Mike Robinson, all ofwhom are long-serving employees, with a total of 65 years' service with Gleesonbetween them. Dermot Gleeson, Chairman, said "I am delighted that we have found a purchaserfor our highly respected Engineering Division which, in addition to providinggood value for our shareholders, will be able to offer the Division's employeessignificantly enhanced career opportunities. I wish our engineering personnel,many of whom I have known for many years, the very best for the future. Selling the Engineering Division, which is a substantial and complex business,was always potentially the most challenging part of the implementation of theGroup's Strategic Review. Now that it is sold, we can focus on an appropriatelyreduced infrastructure for the Group going forward." Gleeson expects to issue its Preliminary Announcement for the year to 30 June2006 on 27 October 2006. +Only live contracts and associated assets and liabilities are being disposed aspart of the transaction Notes for Editors: On 31 March 2006, Gleeson announced the outcome of its strategic review. Gleesonwould concentrate on three related areas: housing regeneration, commercialproperty development and strategic land trading. Gleeson MCL Limited (aconstruction services business involved in railway engineering contracting) wassold in March and Concrete Repairs Limited (a specialist structural renovationbusiness) and the bulk of the commercial property portfolio were sold in June.The reduction in Gleeson Homes' activities outside the housing regenerationsector, involving the run down of its non-strategic land holdings, continues. Enquiries: Gloucester plc 020-8644 4321Paul Wallwork (Interim Chief Executive) Chris Holt (Interim Finance Director) Close Brothers Corporate Finance Limited Peter Alcaraz 020-7655 3139 Bankside Consultants Limited Charles Ponsonby 020-7367 8851 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MJGleeson