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Housing sell off frees McAlpine to reposition

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ALFRED MCALPINE was this week expected to launch a shopping spree in the asset management and support services sector after selling its housing arm to Wimpey.

Last Thursday Alfred McAlpine confirmed that it was holding talks to sell its housing division to Wimpey but refused to discuss the deal until terms had been agreed.

City stockbrokers said they expected the contractor to sell its housebuilding arm for around £400M, using some of the proceeds to fund acquisitions and the rest to buy back shares from shareholders.

In the long term analysts expected the contractor to seek a Stock Market re-listing as a support services company. Support services groups tend to have higher share prices than contractors.

Last Friday Alfred McAlpine directors unveiled a major internal reorganisation geared towards developing its asset management activities. The move follows the recent acquisition of utilities asset management company Kennedy.

Non-housing activities now include a new support services and investments division, headed by director Ian Grice. His target is to double the division's revenue within three years.

Civil engineering and special projects will be combined within a new capital projects division headed by director Andy White. This is expected to grow on the back of strong government spending on transport.

Results published last Friday showed Alfred McAlpine's construction operations turning in profits of £10.4M in the six months to 30 June. This compared with £6.2M for the same period of 2000.

Construction services turnover increased from £189.2M to £239.3M.

The Alfred McAlpine Group increased pretax profits from £21.2M to £26M in the first half, while turnover rose from £388.6M to £437.1M.

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