Irish building firm set for AIM listing

An Irish building company is to launch on the Dublin and London stock exchanges this month in a flotation that will value the business at more than €50 million.

Fencing and scaffolding specialist Siteserv is gearing up for an initial public offering (IPO) that will see it listed on Dublin's IEX and London's Alternative Investment Market (AIM) on November 15th.

Its shares are likely to be priced in the region of 55 cents. The company intends raising €7 million from the flotation to fund expansion plans in both Ireland and Britain.

Siteserv is a combination of two businesses that provide fencing and scaffolding for major building projects. Its chief executive, Brian Harvey, set up the fencing operation, Rent-a-Fence, in 2004.

Earlier this year, that company bought Donohoe Scaffolding, a scaffolding and associated services business which had been operating for more than 20 years.

John Donohoe, who has more than 35 years experience in the building business, founded that company. He is a member of the Siteserv board.

Mr Harvey has 27.5 per cent of the business and other directors also have a stake in Siteserv. None of the directors will be selling shares in the flotation.

Private shareholders recruited through venture capitalist, Boundary Capital, hold the bulk of the business. Boundary's principal, Niall McFadden, who is well known in property and investment circles, is known to have a small stake in Siteserv.

Its financial director is Bernard McGlade, who worked previously with both CRH and civil engineering group SIAC, while Hugh Cooney, head of BDO Simpson Xavier's corporate finance division is the group's chairman.

According to a prospectus distributed by its advisers Davy Stockbrokers, revenues in the 12 months to April 30th were €39.4 million, an increase of 15 per cent on the previous financial year.

Operating profit before goodwill and exceptional items for the 12-month period was €5.9 million, Davy says. The scaffolding operation contributed 87 per cent of these earnings.

The company has been running investor roadshows for the last number of weeks in both Ireland and Britain, targeting mainly institutional backers.

Mr Harvey yesterday told The Irish Times that the response has been largely positive. He said English investors in particular were keen to buy into stocks with an exposure to the strong Irish economy.

Siteserv is selling itself as a play on the Republic's strong building sector. A tightening of health and safety regulations that govern construction mean that all sites have to be fenced off before any work begins and must remain in place until work is finished.

Rent-a-Fence specialises in manufacturing and erecting these boundaries. They are also used in events such as the annual Oxegen rock festival and the company has a large share of this business.

Similarly, scaffolding is required on virtually every site under health and safety legislation.

The company has more than 1,500 customers, according to Mr Harvey. These include big civil engineering players like SIAC and Sisk, as well as major residential builders like Menolly Homes, Maplewood Developments and Ballymore.

Mr Harvey said that the cash raised in the IPO would be used to fund growth beyond its current Leinster focus to the rest of the State, and ultimately into Britain.