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Totty looks to social housing af ter buyout

FINANCE - Interior Services Group pays £12.5m for Totty owner Propencity

TOTTY is targeting a return to social housing work with the backing of its new owner, Interior Services Group.

The Alternative Investment Marketlisted contractor bought privately-owned Propencity, owner of Totty, Jackson Building and retail fit-out firm Dean & Bowes, for an initial £12.5 million last week. Propencity chief executive officer Phil Brierley, who will stay with the business, said: 'We're also looking to do office, retail and industrial development work.

'A couple of years ago we'd have said 'no' to this but, having spoken to David King, Interior's chief executive, it's a good fit.

'We never come up against them on a list as we're mainly in the north and they're mainly in London.' Mr Brierley, 41, borrowed £18 million from the Bank of Scot land to buy P ropencity from previous owners Peterhouse in 2002 in a management buyout that valued the business at £23.3 million.

That debt to BoS was slashed to just £7.5 million in the first 18 months of trading but, as part of the latest acquisition, Interior has taken on £8.5 million-worth of Propencity's debts.

The initial deal comprises £2.2 million in cash and £1.5 million in new Interior shares with the debt making up the rest of the headline acquisition cost of Propencity, which made a £600,000 operating loss in 2004 on tu rnover of £201 m illion.

Totty provided £92 million of that workload with Jackson turning over £71 million and Dean & Bowes the remainder.

Mr Brierley said: 'The turnover will be the same this year but will probably rise 10 per cent next year.' Mr King, who is believed to have tried to take Interior off AIM in recent years, said: 'The acquisition of Propencity gives the group a new regional platform to work from and opens up opportunities for us in retail fit-out and social housing.'