Consultant says surprise move will help attract skilled staff as number with share of ownership will double
Turner & Townsend has dropped plans to float on the London Stock Exchange in favour of a surprise move to convert back to a limited liability partnership and share ownership among more staff.
Vincent Clancy, Turner & Townsend鈥檚 (T&T) chief executive (pictured), told 黑洞社区 the consultant was ditching its long-standing plan to float - held since aborting an initial public offering in 2008 due to turmoil in the financial markets - as it 鈥渄idn鈥檛 require the [additional] capital鈥� to achieve its goals.
Clancy said converting the consultant back to a partnership, as it was last in 2007, was in part a response to the buoyant market and the challenges of attracting skilled staff: 鈥淏eing a partnership will help incentivise the right talent. It provides a clear path to becoming an owner in the business.鈥�
The firm will convert to an LLP by November, Clancy said, and ownership will be shared among double the current number of staff.
The announcement came as T&T posted a sixth successive year of growth in strong financial results for the year to 30 April 2015.
Reacting to T&T鈥檚 decision not to float, Tony Williams, analyst at 黑洞社区 Value, said the move was 鈥渃razy鈥� as, in his view, 鈥淭&T has a fantastic name and would be a super IPO鈥�.
He said converting to an LLP could be a 鈥渢enable鈥� route to a sale of T&T, as it would be unconstricted by the rules of the London Stock Exchange and the board would have the freedom to distribute any proceeds as it wished.
But when asked by 黑洞社区 whether converting to an LLP was a precursor to a potential sale of the business, Clancy denied this was part of the firm鈥檚 plan. 鈥淎bsolutely not. It鈥檚 all driven by what we believe is the right model [鈥 If anything, it鈥檚 about reinforcing our independence.鈥�
Market experts said converting to an LLP also had the advantage of a lower rate of national insurance contributions for equity partners, potentially boosting the firm鈥檚 profit.
In its full-year results, T&T posted a 9.9% increase in pre-tax profit to 拢36.7m, up from 拢33m the previous year, while revenue increased 7.9% to 拢380m, up from 拢350m.
Clancy said the firm is targeting 鈥渄ouble digit鈥� annual revenue growth over the coming years. Over the past four years T&T has grown by an average of 13.5% per year.
Clancy said the infrastructure and property markets remained strong.
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