The transaction follows the group’s acquisition of a 40percent interest in the Byrne Group for £12m in June last year. WBHO chief executive Louwtjie Nel said that the group had been seeking growth opportunities in new markets to further diversify the group’s earnings platform and the UK was identified as offering the most potential at acceptable levels of risk.
“The acquisition of the Russells businesses is an excellent strategic fit for our UK operations and will add additional substance to our presence in the market,” Nel said. “The culture and values of Russells are based on teamwork, integrity and loyalty, and are strongly aligned with those of WBHO.”
Nel said family-owned Russells businesses had demonstrated strong, yet controlled and sustainable growth over recent years, adding that the Manchester and North West construction markets currently offered a healthy project pipeline and the business had a strong secured order book for the 2019 financial year.
Russells founders, Andrew and Gareth Russell, would remain shareholders and joint managing directors and retain day-to-day control of the businesses.
Russells Limited provides design, installation and project management capabilities across all main sectors and was one of North West England’s largest and most successful construction businesses, with a strong and reputable brand.
Russell Homes specialises in land acquisition and planning applications in respect of in-house and developer-led residential schemes and was experienced in delivering a full spectrum of builds, from cost-effective social housing to executive homes and luxurious bespoke builds.
Russell Homes offers WBHO entry into the UK residential property market and the business has a number of schemes in various stages from planning permission to build-out, with good potential for future growth in the region.
The Byrne Group made a loss in WBHO’s financial results for the six months to December, resulting in WBHO in February reporting a R28.8m after tax loss for its 40percent shareholding, despite it reporting revenue of R1.08billion.
WHBO said that following its acquisition of a 40percent interest in the Byrne Group and subsequent recapitalisation of the balance sheet, the company had experienced a slow order intake over the first quarter of its 2018 financial year.
It said this was compounded by delays to the expected start of a number of projects.
Margin performance was satisfactory, but the low volume of work was insufficient to cover the group’s overhead, it said.
WBHO declined by 0.97percent on the JSE yesterday to close at R146.
- BUSINESS REPORT