Westbury, the homes business previously controlled by the Joiner family, which was the subject of a management buy-out last year, is coming to the stock market with a value of more than twice the buy-out price.
Chief executive Richard Fraser and his colleagues paid £12m, largely raised from institutions, to buy Westbury last year. Now, excluding the “new money” being raised in the offer for sale, the business is on offer for public subscription at twice that.
More than 10.9m shares are being put up for sale at 145p per share, a price which values the company at £39.2m. Virtually all the shares on offer come from the company itself — few are being sold by existing investors.
The cash will transform Westbury and provide the platform for the next round of growth. Borrowings will come down from £14.5m to £7.3m, while shareholders’ funds go up from £9.5m to £22.4m.
From its Cheltenham base, Westbury builds as far east as Berkshire and has built up a substantial land bank of over 7,000 plots. It concentrates on the lower end of the market, with some 50% of the output going to first-time buyers.
On the basis of the group as structured after the share issue, Westbury produced profits of £5.74m in the year to end-February 1986, and brokers predict a figure of over £6m in the current year.
On the historic earnings, the shares are on offer at 11.5 times earnings, but on market forecasts the rating falls to under 10 times, below the rating accorded many other housebuilders.
