Social housing firm in financing deal

Date

An award-winning North West firm which specialises in refurbishing social housing has secured a financing package from Lloyds Development Capital (LDC).

Herbert T Forrest (HTF), based in Preston, has been owned by the Forrest family for over 50 years. Clearwater Corporate Finance advised the shareholders on the deal, which enables a number of them who are not currently involved in operations to realise their investment in the business, and allows the current senior management team to take an equity stake in the rapidly growing company.

HTF provides refurbishment, repair and maintenance services to housing associations and local authorities. The company has seen its turnover rise from £9 million in 2003 to £40 million this year.

Following the transaction, sales are expected to grow significantly over the next three years and the business is set to increase its workforce as it develops in-house specialist services such as electrical, mechanical and gas engineering, and painting.

The company operates from a network of branches across the North West including Blackburn, St Helens and Preston. It offers everything from a single service to a complete refurbishment package and runs its own joinery workshop providing bespoke products such as staircases and bars.

The deal was led by managing director Tim Forrest, whose father Herbert took on the business in 1955 when he bought it as a general joinery firm. Tim Forrest said: “This deal is a huge opportunity for the business and our employees and puts us in a strong position to continue building on our recent success. It also enables those who have played a crucial role in the development of the business to share in the company’s success in the future.”

HTF refurbishes in excess of 11,000 homes per annum, carrying out work ranging from single service contracts, such as roofing or kitchen installation, right through to delivery of complete schemes.

Carl Houghton, partner with Clearwater Corporate Finance said: ”Herbert T Forrest is a star performer in the region and the investment from LDC should add to what has already been an incredible success story.

“Best value tendering and long term partnership framework agreements promoted by the Egan Report have proved to be highly effective for social landlords and their supply base and are likely to become more commonplace for other public sector construction contracts. This, together with the increasing demand for social housing, will provide strong growth for the company in the years ahead.

“This is Clearwater’s fourth deal in the sector in two years and follows the private equity deals for Sure Maintenance and Jackson Lloyd, and the recent trade sale of Sol Construction to Rok Plc.”

The opportunities for maintenance firms working in the social housing market have grown rapidly due to rising government spending in the sector. The Decent Homes Standard introduced in 2000 has seen a commitment to annually invest £10 billion to bring all social housing up to an acceptable standard.

With 603,000 social dwellings, the North West has 12 per cent of the UK’s stock and is the third largest region behind London and Scotland.