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Company spotlight: Abbey

FINANCE

BEFORE the recent resurgence in listings, a rash of construction-related companies moved down from the main exchange to the Alternative Investment Market.

Those making the journey down included contractor Montpellier and plant firm Andrews Sykes.

With no institutional buyers, these companies were better off trading in a cheaper, less regulated market but until this year, no house builders had moved down to AIM.

House builders such as Telford and Propan did float on AIM but these were smaller outfits looking to take advantage of the tax breaks or expand via acquisition.

Abbey is looking to do some deals but also wants its shares picked up by tracker funds, which do not pick up dual listed stocks on the main exchange but do follow any shares on the junior market.

The firm also wants to attract more retail shareholders, an admission that institutions are losing interest in small to medium-sized house builders.

Another small house builder, Raven Mount, recently moved to AIM after failing to sell housing subsidiary Swan Hill.

The failure of the sale was due to pension problems but also a sign that house builders do not want to increase already high gearing with take-overs that could become overpriced as the market cools.

In the past, consolidation and a buoyant housing market have driven rises in shares.

With the housing market slowing - as Taylor Woodrow testified last week - Abbey's move is a partial admission that the consolidation frenzy also looks to be ending.

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