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Nationwide set to float on AIM

Following months of speculation, Nationwide Accident Repair Services has announced its intention to float on the alternative investment market (AIM).

Michael Wilmshurst, chief executive at Nationwide, told AM: “It seems like a sensible time to float following four years of private ownership. It’s an important step for us.”

At the same time as seeking admission, Nationwide will be placing 35% of its holdings on the market. The shares will come from Guinness Peat and JO Hambro, the two capital venture investors that bought Nationwide in 2002. Together they will retain a 65% share in the company, a sign that Wilmshurst finds encouraging.

Industry analyst Robert Hadfield of Auto Body Projects told AM the move was not a surprise. “It was inevitable that the original investors would want a return on their investment at the earliest possible opportunity.”

To date Nationwide has not given a 10-day notice period, as is required prior to flotation on AIM – but it is planned that first day dealings will take place at the end of June.

Hadfield says: “It will be very interesting to see the profile of investors in the future. Maybe motor insurers will be tempted to ‘buy’ a slice of the company to secure future repair capacity.”

Meanwhile, Wilmshurst believes that Nationwide’s non-cyclical, stable business will attract ample investors.

News of the flotation comes at a time when the UK’s 6,000-strong crash repair sector continues to be largely fragmented. Nationwide is the country’s largest dedicated operator with 69 sites while Just Car Clinic, the second largest operator, has 12.

At the same time, the industry has had a challenging market on its hands. The 2005 Bodyshop Magazine Survey found that the number of crash repair centres across the UK had decreased by 25%. The majority of these closures occurred in the smaller, independent sector.

Hadfield believes that Nationwide’s move reinforces “the coming of age” of the sector. “It confirms the industry’s move away from its previous ‘cottage’ status to that of a potentially mature and fully fledged entity,” he says.

Despite this backdrop of difficult and demanding trading conditions, Nationwide generated a turnover of £140m in the year to December 31, 2005. “Michael Wilmshurst has done a fantastic job in turning a loss-making business around”, says Hadfield.

By floating on AIM the company hopes to further increase its profile among existing and potential customers. Wilmshurst believes it will also enhance Nationwide’s status within the marketplace as well as providing a firm platform on which to build up the business.

“The flotation will give the company clarity and certainty over its future. I give credit to all the team and am looking forward to leading Nationwide in the future,” he says.

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