The UK’s publicly listed facilities management (FM) companies experienced a significant improvement in share price performance in the third quarter of 2013, according to analysis from the business and financial advisers Grant Thornton UK LLP.
The firm’s quarterly Quoted FM Tracker which follows the performance of 15 publicly traded UK FM companies, recorded an average share price rise of almost +12% for the peer group over the period. The sharp rise follows lacklustre performance of the group in Q2, which saw only three of the top 10 companies (by size) record any share price growth.
Driven upwards to a significant degree by outfits such as Kier Group and ISG PLC (who saw share price growth of +47.2 per cent and +43pc, respectively), the groups average Q3 share price performance significantly outperformed both the FTSE All Share and FTSE Support Services indices – which saw +4.7pc and +7.5pc increases, respectively.
David Ascott, Corporate Finance Partner at Grant Thornton UK LLP, said: “To a large extent, the uptick in share price performance will come as welcome relief for the group, as it catches up with other sectors that have been quicker to capitalise on the recovery. How long the group can maintain this upward trajectory remains to be seen, but the positive signs we’re seeing in the wider economic rebound will no doubt work in the sector’s favour.”
Grant Thornton’s quarterly Insights into Facilities Management which analyses the volume and value of publicly announced merger and acquisition (M&A) activities in the UK’s FM sector, also noted a modest decline in transactions in the market. In total, 22 deals were announced over the period, down by just three transactions from the previous quarter. In year-to-date terms however, 2013 remains ahead of the previous year and overall expectations are for the market to meet or exceed the annual numbers seen since 2008.
Domestic M&A continued to dominate the landscape, although the proportion of overall activity accounted for by international acquirers remains on the rise, representing nearly a quarter of the sample in Q3.
Ascott added: “With much of the quoted FM sector actively engaged in strategic reviews of their portfolios of businesses, significant M&A opportunities should arise – either for new entrants as we saw with GDF/WorkPlace or private equity plays, such as Lyceum with SGP. Despite a slight slowdown in transactions over the past quarter, we can expect M&A activity to pick up again over the next few quarters.”
Having registered only one private equity (PE) transaction in the first half of 2013, three such deals were announced in the third quarter.
