Loss-hit MSS buys a slice of building services pie
Managed Support Services, formerly Worthington Nicholls, has made its first major building services acquisition by buying Redhill m&e firm Status Building Services.
On November 30, the air-conditioning group acquired Status Building Services for £3.7m in cash.
Status Building Services provides heating, air conditioning and electrical maintenance services. Its latest accounts show the company had net assets of £100,000 at completion and an annual turnover of £8m. The firm's customer base is focused in London and the South East.
'The Building Services market, which will now be the principal focus for the group, is diverse and fragmented' said the MSS board in its interim results announcement for the six months to September 30. It added:'MSS will primarily focus on technical building services with high levels of added value'.
In its interim results for the six months to September 30, MSS made a pre-tax loss of £2.6m, compared with a £730,000 profit last year. The group reported a turnover of £7.8m, down from £16.3m in 2008.
The board described the first six months in respect of the existing group as 'disappointing, reflecting poor market conditions'.
MSS has closed its Projects division and the cost of its closure and the related redundancy costs amount to £900,000.
Simon Beart, chief executive said: 'Following the strategic decision to concentrate on the technical Building Services market, the Board has decided that it is no longer necessary to continue to offer a standalone Projects capability. Whilst this activity was successful and profitable in the prior year, available margins are now unattractive and the offering is no longer core to the group's range of preferred services'.
Beart added: 'The rapid deterioration of market conditions led to a poor first half trading, primarily as a result of persisting with the Projects division. However, the acquisition of Status and the closure of Projects will transform the group'.
MSS has appointed Jamie Reynolds as chief operating officer.
Reynolds will be tasked with expanding the business and strategic acquisitions. He has more than 17 years experience in the facilities management sector.
1 December 2009