MSS raises £6m to bag some bargains

AIR-CONDITIONING group Managed Support Services is raising £6m to take advantage of the recession and pick up some bargains.

The Wilmslow-based firm, formerly known as Worthington Nicholls, said it is placing 75 million shares at 8p each with institutional investors to “exploit acquisition opportunities at a depressed stage in the business cycle”.

The group said that, following the appointment of the current management team and a subsequent restructuring, it has traded profitably and has generated positive operating cash flow in the current financial year.

It said the team has delayed the timing of acquisitions until such time that the worsening economic environment is fully reflected in the profitability of potential targets and the expectations of vendors.

It believes that its larger surplus cash balance resulting from the placing will make MSS an increasingly attractive prospect as a purchaser. The directors expect this will lead to further approaches from vendors and distressed companies. 

Companies on its target list include smaller firms involved in electrical testing, water treatment and energy management services as well as larger companies operating in the public and private sectors.

It added that while current trading remains in line with expectations for the year ending 31 March 2009, it is anticipating a “lengthy recession” and has further reduced costs to ensure continued profitability at the group.

Chief executive, Simon Beart, said: “We have increased our surplus cash balances at a time when cash is becoming increasingly scarce. We will now review a broad portfolio of opportunities as the economic climate worsens.”