10th Dec 2007 18:04
Inspace Plc10 December 2007 Press Release 10 December 2007 Inspace plc Statement re: possible offer and trading update Inspace plc ("Inspace" or "the Company") announces that it has received anindicative proposal from Willmott Dixon Limited regarding a possible cash offerfor the Company at a price of 183 pence per share. Willmott Dixon Limited is aprivate company majority owned by the Willmott and Dixon Families. Colin Enticknap, in his capacity as Group Chairman of Willmott Dixon, has beenleading discussions on Willmott Dixon's behalf with the Independent Directors ofInspace, supported by their respective advisers. Whilst discussions are at an advanced stage, there can be no certainty that anoffer will be made. A further announcement will be made in due course. This announcement has been made with the consent of Willmott Dixon. Current trading Despite a more challenging second half year, overall trading is in line withmarket forecasts for the year ended 31 December 2007. As usual, there are issuesto be resolved before the accounts are closed, most notably the agreement ofannual performance-related incentive payments with clients. Whilst these arerunning at higher levels than normal, the Directors remain optimistic thatsatisfactory settlements will be reached. Social Housing Our core Social Housing market remains robust, particularly in terms of newbuild activity which is expected to provide the majority of future revenues forthis division. With many good opportunities on the ground, sales andpreconstruction teams are working across a variety of framework and projectspecific bids, and conversion rates are good. Sourcing land and securingplanning consents remain the key frustrations for social housing customers,creating the main constraint on what might otherwise be higher growth rates. Decent Homes work continues to be difficult for Inspace to procure with pricinglevels becoming more aggressive as existing programmes draw to an end. This hasnow translated into growing competitiveness on maintenance tenders, in part dueto Decent Homes contractors migrating into this area. Affordable Housing Recent uncertainty about house prices is now impacting our Affordable Housingdivision. In some instances, launch prices have been reduced in order to keepreservation levels at an acceptable level. Investor interest, which hastraditionally fed a material proportion of sales, has declined in broad termsalthough we are seeing some larger strategic investors prepared to speculate onmultiple unit deals in order to induce greater discounts. With just fourdevelopments currently on site, we are less exposed to short term marketfluctuations than the volume builders. One of those sites will be complete inthe first quarter of 2008 and is fully sold; the second, launched in the summer,is almost fully reserved. The two remaining sites have just been launched withall unit sales budgeted for the last quarter of 2008. Looking further ahead, thethree London Wide Initiative and Dee Park regeneration schemes provide thebackbone of our sales programme from 2009. Corporate Assets Our Corporate Assets division operates in two sectors: the property maintenancesector and the interior fit-out sector. The former remains robust in terms ofvolume, albeit the fragmented structure of the supply side and low barriers toentry continue to create a competitive pricing environment. Efforts to segmentour customer base, growing volumes with higher spending property portfolioholders and reducing volumes with those offering lower or less predicablespending patterns, continues and is progressing satisfactorily alongside theroll-out of the new technology platform aimed at improving efficiency. Interior fit-out remains our most volatile sector, being dependent upon thecommercial office market, particularly in central London. Whilst we have seengood growth during 2007, we are now seeing reduced confidence levels, acorresponding reduction in our sales pipeline and some pending orders beingshelved. Forward Order Book The forward order book at the year end is expected to be marginally lower thanour declared targets of 85% of revenue for the Social Housing division and 75%for the Corporate Assets division. The Social Housing shortfall, which relatesmainly to maintenance activity, will be rectified if we secure a maintenancecontract with Birmingham City Council where a decision is expected early in theNew Year. The Corporate Assets shortfall relates mainly to interior fit-outwhere we are more exposed approaching 2008 than we would have liked. Experiencehas taught us that volumes can also improve quickly, but we are monitoring theposition carefully and will retain the flexibility to reduce capacity ifrequired. Revenues in the Affordable Housing division are becoming less predictable, witha noticeable reduction in viewings and reservations over recent weeks. Enquiries: Dresdner KleinwortChristian Littlewood Tel: +44 (0) 20 7623 8000Robert Dawson Media enquiries:AbchurchHenry Harrison-Topham Tel: +44 (0) 20 7398 [email protected] www.abchurch-group.com Dresdner Kleinwort Limited, which is authorised and regulated by the FinancialServices Authority, is acting for Inspace plc and for no-one else in connectionwith any potential offer and will not be responsible to anyone other thanInspace plc for providing the protections afforded to customers of DresdnerKleinwort Limited or for affording advice in relation to any potential offer. Disclosure in accordance with Rule 2.10 of the City Code: In accordance with Rule 2.10 of the City Code on Takeovers and Mergers (the "Code"), Inspace confirms that it has in issue and admitted to trading on theLondon Stock Exchange 81,001,690 ordinary shares of 2 pence each under the ISINcode GB00B07NFJ53. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevantsecurities" of Inspace plc, all "dealings" in any "relevant securities" ofInspace plc (including by means of an option in respect of, or a derivativereferenced to, any such "relevant securities") must be publicly disclosed by nolater than 3.30 pm (London time) on the London business day following the dateof the relevant transaction. This requirement will continue until the date onwhich the offer becomes, or is declared, unconditional as to acceptances, lapsesor is otherwise withdrawn or on which the "offer period" otherwise ends. If twoor more persons act together pursuant to an agreement or understanding, whetherformal or informal, to acquire an "interest" in "relevant securities" of Inspaceplc, they will be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of Inspace plc by Inspace plc, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8, you should consult the Panel.-Ends- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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