VCT Industry Report 2015-16

76 / 92

76
Feb 2015 - £1,250,000
Business Support Service
Kent
80
Bilby is an established property services business, focused
on the installation and maintenance of gas heating systems,
boiler servicing, plumbing, drainage and general building
repairs. Its customer base is almost entirely local authorities
and housing associations, all within London & SE England.
Bilby’s services are non-discretionary and driven by legislation
and government initiatives covering gas safety, the “Decent
Homes Standard” and the “Right to Repair Scheme”. The
business has grown organically since its formation in 1977, and
the purpose of the listing on AIM in March 2015 was to support
a buy and build strategy in a fragmented market. Since listing
Bilby has raised further financing, at a significant premium to
its IPO price, to fund an acquisition of a similar sized electrical,
heating, mechanical and property services contractor offering
strong synergies with its existing operations.
RATIONALE FOR INVESTMENT:
Demand for social housing far exceeds supply in the regions
in which Bilby operates
Maintenance work is a legal necessity, which has to be
carried out regardless of landlord funding pressures
With contracted service periods, typically 3-7 years, Bilby
has good revenue visibility
Bilby’s concentrated geography and strong client
relationships generate attractive margins and the enhanced
scale from acquisitions will allow them to meet minimum
turnover requirements to bid for larger contracts.
VALUE ADDED BY VCT MANAGER:
Amati became involved in supporting the company through
the last stages of the IPO process, particularly in the
discussions about pricing the issue. Since then we have been
approached by the chairman for advice about specific matters
of corporate governance on several occasions.
GROWTH IN REVENUE:
Amati first invested in Bilby at IPO in February 2015, at which time
revenues were £8.7m. The consensus forecast for March 2016 is
for revenues of £32.6m.
Feb 2015 - £875,000
Support Services
Castleford
300
PTSG is the UK’s leading provider of building access and
safety services. It is also a specialist in the design, installation
and testing of lightning protection and electrical systems,
and in high level cleaning services. The company operates in
regulated markets, driven by annual inspection and insurance
requirements. Customers are a diverse range of corporations
and facilities managers in the UK, with international clients
now also being won. PTSG was founded in 2007 by an
experienced management team, which previously built up
and sold facilities services provider, MacLellan Group plc, to
Interserve plc for an enterprise value of £130m. To date, PTSG
has achieved a broadly equal split of organic and acquisitive
growth and it listed on AIM in February 2015 to continue the
consolidation of its end markets.
RATIONALE FOR INVESTMENT:
Demand for PTSG’s services is mainly non-discretionary
The company has market leadership in a number of
areas, but with significant scope for expansion against highly
fragmented competition
Over 90% of customers currently take only one service,
which offers cross-selling opportunities
With nationwide coverage it has an operational advantage
over regionally focused competitors
In addition to organic potential, the company has an
extensive acquisition track record, where its tight operational
management has achieved strong synergies, and this will
continue to be a feature of the future growth strategy.
VALUE ADDED BY VCT MANAGER:
Amati was involved in detailed discussions with the company
about specific aspects of corporate governance during the IPO
process.
GROWTH IN REVENUE:
Amati first invested in PTSG at IPO in February 2015, at which
time revenues were £18.0 million. The consensus forecast for
December 2016 is for revenues of £31.3 million.
+44 (0)131 503 9100
Amati Global Investors is a specialist fund management business based in Edinburgh. It focuses
on UK small and mid-sized companies, with a universe ranging from fully listed constituents of
the FTSE Mid 250 and FTSE Small Cap indices, to stocks quoted on the Alternative Investment
Market (“AIM”). Products include an OEIC – the TB Amati UK Smaller Companies Fund; two AIM
Venture Capital Trusts - Amati VCT and Amati VCT 2; and an AIM IHT portfolio service.