BNS Telecom set for stock market flotation.

Byline: By Howard Walker 

Communication specialist BNS Telecom is raising pounds 8m with a stock market flotation as it looks to buy up more businesses to continue its rapid growth.

The Northumberland telecoms reseller will become the second North-East company this year to list on the Alternative Investment Market when its shares are admitted on Friday.

Prudhoe-based BNS will have a market capitalisation of about pounds 26.9m after placing 30% of its stock with investors at a price of 54p a share.

The company, which has seen turnover mushroom from pounds 7.4m in 2003 to pounds 19.8m this year, will use pounds 1.5m of the pounds 8m raised to part-fund development of its new pounds 2.5m headquarters in Prudhoe.

A further pounds 2m will strengthen the balance sheet, doubling the company's pounds 2m in the bank to fund increased expansion and acquisitions. The remaining pounds 4.5m goes to existing shareholders in the business.

BNS managing director Garry Moat said: "We are extremely pleased with the widespread institutional support we have received despite the current challenging stock market conditions.

"Becoming a listed company will not only raise our profile, but will also provide capital to strengthen the balance sheet and fund the expansion of our marketing and sales capabilities."

BNS sells small businesses and larger corporates a range of telecoms services including fixed line, mobile, data, installation and maintenance services. The company has expanded rapidly since its foundation in 1996 by teaming up with a range of partner organisations, including chambers of commerce, to market services under the partner's brand.

Following deals with several chambers of commerce across the country, including the North-East Chamber of Commerce, it has recently concluded marketing agreements to sell services under the Newcastle United Telecom brand and under South-East Water's brand, targeting the latter's 45,000 business customers.

BNS also recently concluded a deal to sell Vodafone mobile services, bought Modus Telecom to sell voice over internet (VOIP) services and is planning to roll out a broadband offering.

Mr Moat said the company would be looking at acquisitions to access new parts of the telecoms market and that more staff may be added to the current 209-strong payroll as BNS grows its 6,000-strong client list further.

Graham Wilson, current chairman of North-East AIM-listed companies Parkdean Holidays and Premier Direct, has been appointed as non-executive chairman of the business, with Premier Direct founder Barry Moat, who stepped down as chief executive of the South Shields company last week, appointed as a non-executive director.

BNS Telecom's listing follows that of Cramlington biotech company Angel Biotechnology on AIM last week, which raised pounds 1.5m.

County Durham haulage-to-coal group Hargreaves Services is expected to be the largest North-East flotation of the year. The business is expected to raise pounds 20m when it lists on AIM by the first week of December.