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Amco bales out of construction

AIM-listed construction and engineering group Amco has sold its contracting business to part of its management.

Executive director David Jackson and finance director Ian Swire have been backed by management buyout specialists Endless in the deal worth £9.4 million.

The new group will include Amco’s property investment, manufacturing and development businesses. It will be called Amco Group and will have revenues of around £90 million.

The retained Amco business will concentrate on its existing structural steel and engineering operations which trades as Billington Structures. Amco will be renamed Billington Holdings Plc at an AGM next month.

Billington managing director Steve Fareham will step up to the Plc role while the company’s finance director Peter Hart and operations director Mike Fewster will also sit on the Plc board. Turnaround specialist Peter Hems, who was brought in last year, will stay as executive chairman.

An Amco spokesman said the retained business is being modelled on that of Severfield-Rowen and when the switch is made, Billington will join the former as the UK’s only listed steelwork contractors.

Billington works for a number of top 10 contractors including Laing O’Rourke, Sir Robert McAlpine and Kier. It has a forward order book of more than £40 million and in the year to December 2007 it will show a pre-tax profit of £4.5 million on turnover of £50 million.

Amco, which had group revenues of £137 million in 2006, will release its 2007 results later this month. In a statement, it said it will make an overall loss of £4.2 million thanks largely to the costs of the disposal.

The retained group will have a profit of £3.3 million while the outgoing business will show a £1.1 million profit – below expectations after being hit by provisions on a mining contract.