April 2007

Stategic merger follows £7m deals sealed in 1st Qtr

Left to right Barry Redford General Manager, Roger Day Regional Director and Adrian Reeve Chairman

A leading Midlands business services group bought out by its management 12 months ago is to merge two of its four divisions to meet a huge increase in business.

Welconstruct Group Ltd is merging its Interior Contracts and Customer Solutions divisions after both companies doubled their order books over the past year, creating a new division called "Welconstruct" focused on serving its ever-expanding fit-out and refurbishment client base.

The two divisions have secured a hat trick of deals worth more than £7 million in the first quarter of 2007 and united are forecast to hit a turnover of £30 million over the year.

Welconstruct Interior Contracts is a main refurbishment and fit-out contractor to the industrial, retail and commercial property sectors while Welconstruct Customer Solutions designs and implements workspace, supply chain, environmental and cleanroom solutions for clients in a variety of sectors.

The fit-out and refurbishment company also won its biggest ever contract to supply a £3.5m facility for Synergy in Wythenshawe in Manchester, the fourth project that Synergy has awarded to Welconstruct.

Synergy is the UK's largest provider of decontamination and sterilisation services for hospitals and Primary Care Trusts (PCT's) and is a partner to operating theatres providing wider surgical support services such as materials management.

A £2.1m expansion and fit out programme, secured in January is this week set to complete at Accident Exchange plc in Hams Hall where Interior Contracts has designed and constructed an innovative two-tier mezzanine floor within the existing 220,000 sq.ft. warehouse and office facilities, delivering a further 60,000 sq.ft. of office, storage and staff break out space.

Chief executive Adrian Reeve who led the MBO of the group last spring, said the combined expertise of both companies would help to provide an improved service to clients in a sector that continues to grow.

He said: "This merger is the result of an exceptional first year since the MBO and we are now looking to pool the complementary strengths of these two divisions to make us even more competitive in the marketplace. As the economy continues to grow there is a demand for improvement in all aspects of the working environment and this development will enable us to offer clients a fully integrated service to create bespoke work spaces that meets their aesthetic and practical needs. The new division, Welconstruct, will have the joint expertise to take a project from the drawing board right through to completion and beyond while introducing space and supply solutions that can increase efficiency for businesses in an increasingly competitive marketplace."

Welconstruct Group Ltd has grown to an organisation that employs 180 people at offices across the UK. The group also includes "Welco", its catalogue and internet distribution business for office products and workplace equipment, "QMP", a manufacturer of steel furniture, workplace equipment and urban furniture and "Davicon" the UK's largest manufacturer of mezzanine floors.

The company has seen a marked increase in turnover since a major restructuring programme was implemented 3 years ago and this trend has continued since the MBO just over a year ago with the two merging divisions enjoying their best ever quarters at the start of 2007. Mr Reeve believes the merger, which will take effect from May this year, will make the company stronger as it continues to grow.

He said: "This move is not about streamlining the business - initially it will create at least 10 new jobs - but expanding the services Welconstruct provides to its clients while making it simpler for them to do business with us. By creating a single fit-out and refurbishment brand we can consolidate the exceptional growth this part of the group has enjoyed in the past 12 months."