News on 26 September 2000

International property advisory and facilities management group Chesterton International reports pre-tax profits up 24% at £5m in its preliminary results for the year to 30 June 2000.

Chairman Alan Davis, who is standing down, said continuing healthy cash generation meant that the Group was now in a better financial condition than at any time since incorporation. However, the Board has decided not to recommend payment of a dividend. Profits have been increased while allowing investment of £0.8m on new businesses in order to strengthen the Group's range of property related services.

"The Group’s financial position now enables investment in organic growth and also provides the means to make acquisitions in areas that will strengthen its main businesses. These would include operations delivering contracted services such as facilities or property management, in line with the Group’s strategy to grow recurring income streams," said Davis in his statement.

These results reflect strong improvements in the residential and commercial businesses, offset by the start up costs of new businesses and by a disappointing result in consulting.

The company has identified growth opportunities in PFI, property partnering and e-commerce and is considering acquisitions to strengthen the Group’s main businesses.

Chief Executive Michael Holmes said: " The launch of Chesterton Property Partnering has led the Group’s involvement in PFI as well as property outsourcing in the private sector. This business is now well advanced in its development into a substantial long-term contract generator for the Group. Chesterton Structured Finance is establishing itself as a provider of innovative financial solutions in property related transactions.

"The e-commerce team is making encouraging progress. New products to address property performance benchmarking and property insurance have already been announced. Other launches in the area of property management and procurement should follow in the next few months."

The facilities management business, Chesterton Workplace Management, experienced a reduction in profits as a result of losing the Centrica business to Ameyearly last year. However, profits increased in the second half and the division has won new business in recent months.

"The FM business is now on a firm footing, is profitable and cash generative. Demand for FM services should increase as prospective clients search for procurement and other facilities related cost savings," said Holmes

Peter Brooks will join Chesterton as Chairman designate later this month. He is currently Chairman of Enodis plc (previously Berisford plc) and has held senior positions, both at Clifford Chance and in the investment banking arm of Deutsche Bank.