Housebuilder turnaround may net owners a fortune

Mon, 08 Oct 2018 | BUSINESS SALE

Derbyshire-based Avant Homes is reportedly being groomed for a sale which could net its hedge fund owners a small fortune.

According to the Sunday Times the business, formerly known as Gladedale, could be valued as much as £600 million, representing a net gain of £425 million for Avenue Capital, Angelo Gordon and Alchemy Special Opportunities.

The investment companies bought Avant Homes in 2014 from Lloyds Bank in what was essentially a distress sale opportunity. Lloyds inherited the business from HBOS which it acquired in the financial crisis. HBOS took over Gladedale after it breached its covenants following an overly ambitious expansion strategy.

The current owners were fortunate to have experienced a favourable housing market over the following three years. With the assistance of the government’s Help to Buy scheme and renewed managerial focus, the business turnaround was complete.

Last year Avant’s profits increased by 39 per cent, rising to £42.6 million.

The company sold 1,902 homes at an average price of £257,400 over the twelve-month period. It currently employs over 700 people across 71 developments.

Avant has been bullish in the City as it courts potential buyers and investors, touting a target of £1 billion of sales - 4000 homes - each year.

The company recently announced a planned investment of over £500,000 in enhanced Information Systems to support its future growth plans.

Key to the business’ success is its understanding of the importance of the relationship between process, technology and people - necessary to build sustainable and profitable growth.


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