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Support services focus for Northern Bear

The Northern Bear Group will continue to move towards the support services sector in the coming year according to chairman John Pither.

Speaking as the investment group released its preliminary results for the year ending March 31, 2008, Mr Pither said the group had successfully repositioned itself away from new house building and from June will be reclassified under the support services sector by FTSE.

Mr Pither said: “Social housing remains a buoyant market with significant potential for further growth. Under the Decent Homes Initiative, all local authorities are required to bring social housing stock up to a decent standard.

“Central government is investing approximately £3.5 billion each year on the initiative and we expect this commitment to last well beyond 2010.

“The government’s commitment to investing in housing, schools and hospitals has created a positive market environment, and longer term we expect this to continue through significant, ongoing capital works programmes.”

Its preliminary results for the year ended March 31, 2008, showed Northern Bear saw turnover up nearly 700 per cent to £32.2 million from £4.8 million and profits before tax of £2.9 million.

Mr Pithers said the group would continue to look to broaden its scope through acquisitions. Over the past year acquisitions include heating specialist D J McGough, building services specialist Hastie, asbestos removal company Chirman Holdings and refurbishment specialist MGM.

Mr Pithers said: “I am confident that the business is in a strong position to achieve its objective of becoming a leading supplier of support services to the building and construction industry in the north of England.

“Northern Bear’s strategy is to acquire established, cash generative building services businesses based in the north of England and to further augment these acquisitions by organic growth. The aim is to become the preferred buyer of mature, owner-managed businesses that complement and extend the range of support services and products already provided by the Company.

“The businesses we have acquired are predominantly focused on servicing local authorities, government and public funded customers and also provide a widening spread of sector services such as asbestos removal, plant hire, plumbing and gas fitting.

“As a result, our dependence on new house building is now only 13 per cent, whereas 49 per cent of turnover comes from the public sector. “

However, Mr Pither insisted the group had to maintain some involvement in the traditional new
house building market.

He said: “The problems in the new house building sector of the economy are well documented and conditions remain challenging, however, we feel confident that these markets will improve and it is important that we retain a presence in these areas. In the long term, I would see up to 20 per cent of our turnover being generated in the new house building sector.'