08 May 2015
Amati Global Investors is pleased to announce its investment earlier this year in Bilby which listed on AIM in March 2015, raising £2.5m of new money, half of which came from the two Amati VCTs.
Bilby is a long established property services business, focused on the installation and maintenance of gas heating systems, boiler servicing, plumbing, drainage and general building repairs. Its customer base is almost entirely local authorities and housing associations, all within London & SE England. Demand for social housing far exceeds supply in these regions, and Bilby's services are non-discretionary driven by legislation and government initiatives covering gas safety, the "Decent Homes Standard" and the "Right to Repair Scheme". Maintenance work is a legal necessity, which has to be carried out regardless of landlord funding pressures. With contracted service periods, typically from three to seven years, Bilby has good revenue visibility with no contract rebids in 2015. The business has grown organically since formation in 1977, with a listing on AIM in March 2015 to raise acquisition funding for a buy and build strategy in a fragmented market. Targets are already known to management, and are likely to be in gas maintenance, and the provision of similar technical building services, which have higher professional entry barriers. Bilby's concentrated geography and strong client relationships, generate attractive margins and the enhanced scale from acquisitions will allow them to meet minimum turnover requirements to bid for larger contracts.
The shares have performed well since listing, and a recent trading update announced further local authority client wins. An added attraction is a prospective 4% dividend yield.
Phil Copolo (Deputy Chairman) says "We were extremely pleased with the support we received from our new investors at the time of our listing on AIM. From when we first met with the Amati team we were impressed by their understanding of our business and we welcome their support and constructive advice now that they are one of our largest institutional investors."