Tarmac deputy quits to bid for homes division
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Tarmac took a step closer to its planned withdrawal from housebuilding yesterday when John Lovering, its chief operating officer and one of chief executive Neville Simms' two deputies, resigned to put together proposals to buy the pounds 400m homes operation.
The company, Britain's second-biggest housebuilder after rival Wimpey, said all disposal options remained open and stressed that Mr Lovering would not be given favourable treatment over any other potential bidder. Mr Lovering leaves the board at the end of the month and is not expected to return to the company from his current holiday.
Having joined Tarmac from Sears two and a half years ago, Mr Lovering has no experience of the housebuilding industry. His responsibilities at Tarmac included business planning, human resources and the recent restructuring of the American operation.
Before joining the company he spent seven years at Sears, where he was appointed finance director in 1988.
Tarmac is open to offers from trade buyers and has also considered a flotation of the housebuilding operations, which generated operating profits of pounds 64m from the sale of just over 6,000 houses last year. It is understood, however, to believe a management buyout to be the most likely exit route.
When Tarmac announced it was quitting the home building market at the beginning of the month, the move was widely viewed as a vote of no-confidence in an already fragile market, a charge the company strongly denied.
Mr Simms claimed the withdrawal simply reflected Tarmac's inability to develop all its businesses to their full potential.
The news prompted a call, however, from the mortgage and construction industries for more government intervention to revive the stagnant housing market.
Those calls have been reinforced since then by further falls in house prices and the announced withdrawal of BICC, another large housebuilder, from the market.
It is not known how far Mr Lovering has progressed in the search for funds, which would have to total more than the division's net assets of pounds 339m and probably closer to pounds 400m.
The withdrawal of Tarmac from housing is the latest stage in the reconstruction of the company since Mr Simms took control three years ago. He inherited a heavily indebted, loss-making group that had been brought to its knees by the expansion of its housing operations in the boom conditions of the late 1980s.
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