Inspace joins AIM

Inspace Plc
26 May 2005


Press Release                                                        26 May 2005

                                 Inspace plc

                          ('Inspace' or 'the Company')

                    First day of dealings on the AIM market

Inspace plc ('Inspace' or 'the Company'), the property based support services
business that has established itself as one of the UK's leading social housing
repair and maintenance service providers, today announces the commencement of
dealings of its Ordinary Shares on the AIM market (AIM) of the London Stock
Exchange.  Seymour Pierce is acting as Nominated Adviser and as Broker to the
Company.  The stock market EPIC will be INSP.L


Placing Statistics

Placing Price                                                        108 pence

Number of Existing Ordinary Shares                                  57,876,783

Number of Ordinary Shares being placed on behalf of:

-  the Company                                                       9,259,259

-  the Vendors                                                      18,518,519

Number of Ordinary Shares in issue immediately following Admission  67,136,042
Placing Shares as a percentage of the Enlarged Issued Share Capital       41.4%

Market capitalisation on Admission at the Placing Price           £72.5 million

Estimated net proceeds of the Placing receivable by the Company    £9.4 million
(exclusive of applicable VAT)

Colin Enticknap, Executive Chairman of Inspace plc, said: 'We are delighted that
the AIM flotation of the Company has been completed successfully.  This listing
makes both strategic and commercial sense as we take Inspace to the next stage
of its development and we now look forward to working with our new institutional
shareholders.'


For further information:
Inspace plc
Colin Enticknap, Executive Chairman                    Tel: [phone]
[e-mail]                                  www.inspace.co.uk

Seymour Pierce
Mark Percy, Corporate Finance                          Tel: [phone]
[e-mail]                                www.seymourpierce.com

Media enquiries:
Abchurch
Henry Harrison-Topham / Ariane Comstive                Tel: [phone]
[e-mail]                               www.abchurch-group.com


Introduction

Inspace is a property based support services business that has established
itself as one of the UK's leading social housing repair and maintenance service
providers.

Inspace has assembled a portfolio of cyclical and counter-cyclical businesses.
The Group is profitable, is cash generative and has secured a number of long
term partnering arrangements to provide a high degree of recurring revenue and
resilience, with around 60 per cent. of overall activity being in the public
sector.

A growing proportion of the Group's business is in the social housing market
which can be divided broadly into on-going repair and maintenance, and capital
improvement works under the UK Government's 'decent home for all' initiative.
Inspace won one of the UK's first long term partnership agreements in this field
for the London Borough of Tower Hamlets in 1999, and since then has pursued
controlled expansion on a national basis.  The Directors believe that the social
housing repair, maintenance and improvement market will continue to present
significant growth opportunities for companies such as Inspace.

The Directors believe that Inspace is culturally unique and is characterised by
a clear and well communicated strategy, strategically aligned incentive
structures and an open and egalitarian environment developed to encourage
enthusiasm alongside dissatisfaction with the status quo.

Group structure and background

The Group was re-branded in May 2003 when all the support service divisions of
Willmott Dixon, a privately-owned construction and property development company
with a strong presence in the education and social housing sectors, were brought
together under the 'Inspace' brand.  Willmott Dixon, which began its repair and
maintenance operations 30 years ago, has been at the forefront of partnering
initiatives in the construction sector and has as its deputy chairman, Sir
Michael Latham, a leading authority on partnering and local authority 'Best
Value' procurement.  These principles of partnering and 'Best Value' procurement
are at the core of Inspace's social housing service provision.

The Group was de-merged from Willmott Dixon on 1st January 2005.

Inspace has three complementary areas of activity, delivered through four
business streams:
                    
     •    Repair, maintenance and improvement of social housing stock 
          (Partnerships);

     •    Repair, maintenance and improvement of corporate and public sector 
          non-housing real estate Maintain and Environment); and Interior 
          design, installation and furnishing of corporate and public sector 
          non-housing real estate (Complete).

Market dynamics

Public Sector

Further growth in the outsourcing of long-term maintenance and refurbishment
contracts is expected to be driven by the Local Government Act 1999 and the
realisation by local authorities that outsourcing on a 'Best Value' basis can
improve service levels, and can help a local authority to retain control of its
housing stock and to claim higher funding budgets from the Government.

In April 2000 the Government issued the first comprehensive review of UK housing
for 23 years in its Green Paper 'Quality and Choice: a decent home for all'.
This highlighted the previous under-investment in social housing which had left
a £19 billion repair backlog over 2.1 million homes, and set-out the
Government's proposals to tackle under-investment, raise the quality of housing
and housing management, and bring all social housing up to a decent standard by
2010.  In July of that same year the Government announced a substantial increase
in housing investment, from £1.5 billion annually in 1997/98 to £4 billion
annually by 2003/04.

In order to encourage the adoption of its strategy, particularly the creation of
arms-length management organisations (ALMOs), the Government introduced
substantial additional funding under its Decent Homes initiative.  On a three
star rating system, this additional Decent Homes funding is only available for
those local authorities adopting an ALMO and achieving at least a two star
rating, as determined by the Audit Commission.  Alternatively, if they
persistently achieve a zero star rating, their housing stock and the income from
it may be transferred to a not-for-profit registered social landlord (RSL).
Obtaining a three star rating not only gives potential access to additional
Decent Homes funding, but also leads to less frequent reassessment of the local
authority by the Audit Commission.

In January 2005, the Office of the Deputy Prime Minister (ODPM) set out its five
year strategy for housing in England - 'Sustainable Communities: Homes for All'.
 It outlined that, although the number of substandard social rented homes had
been reduced by 1 million since 1997, a substantial number of social tenants
still lived in homes that did not meet decency standards.  To address this
issue, the ODPM reiterated its commitment to increase investment, predicting
that by 2010 local authorities and housing associations will together have spent
£42 billion, including £10 billion from the private sector, to improve social
housing in England.

There are around 4 million social housing homes in England, of which 1 million
homes still fell below decency standards in May 2004.  Industry forecasts show a
relatively steady social housing repair and maintenance market over the next 15
years, running at around £4 billion per annum.  The Decent Homes initiative is
expected to provide a boost to social housing annual capital expenditure
programmes, with Decent Homes spend estimated to average £3.5 billion per annum
between 2006 and 2010.  These forecasts illustrate the constant need for
repairing and improving housing stock.  Furthermore, it is widely felt in the
industry, due to the rate of refurbishment and capacity constraints, that the
2010 target is unlikely to be achieved and that additional spend will be
extended over a further two to three years; a House of Commons Select Committee
has predicted expenditure continuing to 2013.  Adding both maintenance and
capital funding together (including Decent Homes but excluding new build), Focal
Research forecasts suggest a combined market size of just over £10 billion in
2005, rising steadily through until 2011.

Partnering and best value

Underlying the Government's housing strategy is their desire to introduce the
principle of 'Best Value' into local authority procurement.

The Government commissioned report 'Constructing the Team' authored by Sir
Michael Latham in 1994 ('the Latham Report') had initially promoted the concept
of partnering to UK construction; Sir Michael's ideas were subsequently
developed in the Egan Report, published in 1998 which also concluded that
partnering was one of the key methods for achieving 'Best Value' through the
introduction of performance measurement and competition against clear targets
for improvement.  The National Procurement Strategy for Local Government,
published in October 2003, supported the adoption of these principles in the
public sector, stating 'the strategic objective of partnering is the delivery of
better services to citizens through the creation of sustainable partnerships
between councils and suppliers in the public, private, social enterprise and
voluntary sectors for the delivery of services and the carrying out of major
projects'.

These initiatives create substantial opportunities for the involvement of the
private sector, including companies such as Inspace, to secure long term
arrangements with both local authorities and housing associations.

Private sector

In MBD's 'UK Construction Market Development' report, published in 2005, the
private non-residential repair and maintenance market was indicated to be worth
approximately £14 billion in 2004, representing approximately 32.1 per cent. of
the total UK repair and maintenance market.

Out-sourcing of non-core tasks, such as repair and maintenance, is a well
established practice in the private sector.  The Directors believe that large
corporate customers, particularly those with geographically widespread property
portfolios, are increasingly seeking to outsource such works to organisations
that can provide a uniform service which can be administered centrally rather
than at the local level, and provide increased efficiencies and levels of
service.  There are early signs that some of these corporate customers are now
also considering aspects of a partnering model, creating the opportunity for
closer customer/supplier working relationships, with the common objective of
improving service levels and improving efficiency levels to the benefit of both
parties.

Additionally, the Directors believe that the integrity of a company's brand now
typically encompasses its property portfolio, particularly in the retail and
financial services sectors.  This places greater focus on the standard and
uniformity of appearance across the property portfolio and the requirement for
rapid response in the general upkeep of that portfolio.

Business Operations

Partnerships

Partnerships has established itself in the evolving 'premier league' of top ten
social housing repair, maintenance and improvement providers in the UK.  It
delivers responsive maintenance, planned maintenance, re-instatement of void
homes and minor capital projects, and also Decent Homes improvement works under
regeneration schemes.  These services are provided exclusively to local
authorities, RSLs and ALMOs, typically on term contracts of between five and 10
years.

The Partnerships business model is based on providing a bespoke, dedicated
service to each customer and can operate anywhere in Great Britain.  It has been
awarded long-term contracts with Barnsley Metropolitan Borough Council
(maintenance and Decent Homes), Colchester Borough Council (maintenance and
Decent Homes), Trent & Dove Housing (maintenance), and is in the process of
establishing a new branch for the Richmond upon Thames Churches Housing Trust
(maintenance).

Partnerships' income is derived from two main areas:
          
     •    Responsive maintenance, planned maintenance, re-instatement of void 
          homes and minor capital projects - these operations are funded 
          directly from the local authority's internal budgets and are not 
          dependent on such factors as central government spending policies or 
          star ratings.  This spend has increased year on year over the past 
          three years and industry analysts expect this trend to continue beyond 
          2010; and
          
     •    Decent Homes improvement works - this is subject to central government 
          spending trends as discussed previously under 'Market Dynamics'.

Partnerships is highly selective when assessing contract opportunities,
prioritising potential projects where the local authority is perceived to
embrace a genuine intention to move towards the partnering model, or is already
applying long term partnering arrangements.  In addition, target opportunities
would preferably be cost plus, open book (or if they commence on a schedule of
rates, be capable of moving to cost plus) and also be suitable for a dedicated
team approach.  The Directors believe that in these circumstances, the local
authority's supplier selection criteria are more often weighted towards a '
greatest quality' rather than just a 'lowest price' basis.

Under the partnering arrangements entered into, and as advocated by the Latham
and Egan Reports, the majority of the profit on cost plus, open book contracts
is predicated on the performance of the contractor and the level of shared
savings generated.  Performance is measured by certain predetermined key
performance indicators ('KPIs') which typically cover delivery times, cost,
targets and client and tenant satisfaction.  Published data demonstrates
Partnerships' ability to improve KPI trends on cost plus arrangements.  This
ability to demonstrate tangible performance improvement is one of the factors
contributing to its ability to generate higher margins.

The Directors believe that reputation, covenant, scale and experience are
becoming increasingly important factors in customer selection which, if proved
correct, will benefit those companies like Inspace perceived to be amongst the '
premier league', and potentially lead to consolidation in the sector.  The
ability to demonstrate a sound understanding of 'Best Value' procurement, and
also a politically sensitive and flexible approach towards the transfer of
labour (TUPE), are considered by the Directors to be important success factors
in this sector, and strengths of Partnerships.

Furthermore, the Directors believe that the reputation of Partnerships has been
enhanced by its relationship with the Willmott Dixon group, which has been
involved in new social housing build for 30 years, and the close association
with Sir Michael Latham, author of the Government commissioned report, '
Constructing the Team' in 1994 on partnering and 'Best Value' procurement in the
construction and service sectors. Sir Michael Latham acts as a consultant to
Inspace.

The housing stock maintenance programme undertaken on a partnering basis for
Barnsley Metropolitan Borough Council, was not only awarded 'Pathfinder Status'
by the Department for Transport, Local Government and the Regions but also
recognised by the Institute of Maintenance and Building Management (IMBM), which
awarded the scheme first prize in their 2003 awards.

Partnerships has approximately 250 employees, a substantial number of whom have
been transferred under TUPE regulations.

Maintain / Environment

Maintain is one of the UK's largest fabric maintenance businesses with its own
uniformed and branded labour force and, in the Directors' opinion, one of only a
limited number of such businesses capable of providing a national service across
England, Scotland and Wales.  It offers an integrated, 24 hours, 7 days a week
maintenance support service, with its own call centre, to the corporate and
public non-housing sectors.

Fabric maintenance support carried out by Maintain falls into the following
broad categories:
          
     •    Reactive maintenance - responding within a prescribed period according 
          to the nature of the call-out and by appointment for non-urgent items;

     •    Planned preventative maintenance ('PPM') - according to PPM schedules 
          as devised via asset surveys or in consultation with the customer; and

     •    Minor capital works.

The national service is delivered across its seven regional branches in
Birmingham, Leeds, London, Manchester, Newcastle, Norwich and Southampton, with
those branch teams coordinating a predominantly home-based workforce.

Maintain has a broad spread of customers in both the public and private sectors,
who typically offer longterm contracts with a duration of three years or more.
Workload comes predominantly from major private customers (many of whom are in
the FTSE 350) or from customers in the public sector.  Those in the former
category include Barclays, Sainsbury's, HBOS and Whitbread; those in the public
sector include Royal Mail, Leeds City Council and Suffolk County Council.  Where
volume justifies such a move, Maintain will, like Partnerships, establish a
bespoke team built around the needs and workload of a single customer.  An
example is with Premier Travel Inn, where the dedicated service team now manages
a rolling programme of refurbishment for approximately 21,000 hotel bedrooms.

Environment is a specialist building services maintenance provider, capable of
servicing multi-tenanted offices and technically sophisticated buildings,
primarily in London.  It performs mechanical and electrical maintenance
including to lighting controls and to air conditioning and refrigeration
systems, through a planned preventative maintenance service.  It will
occasionally also provide installation project works on a selective basis.

The key maintenance contracts for Environment are Tower 42, the Trocadero Centre
and America Square. Contracts are typically 3 years in length are for the
provision of either static or mobile planned maintenance.  Currently, most of
the existing business arises from static service provision with operatives based
on site.  The opportunity exists to enhance margins for this service through
taking on additional replacement and renewal work for customers.  The mobile
service provision generates higher gross margins than static services.  The
Directors plan to improve profitability for the business stream through
increasing the proportion of mobile services provided.

Environment is presently the smallest of the Group's business streams. Whilst
its operation is predominantly based in London, the Directors aim to expand
Environment's service offering organically by using the branch infrastructure
and customer base within Maintain.  Consequently, for segmental reporting
purposes, it is combined with Maintain.

The two combined business streams employ approximately 650 people.

Complete

Complete, which provides turnkey interior design, installation and furnishing
services for the corporate and public sector non-housing markets, has achieved
substantial growth rates since its launch in 2002.  It offers a comprehensive
design led service covering each aspect from space analysis through to interior
design, from project management of installation works through to furnishing.

Customers are typically property end users and have until recently been
predominantly in the private sector.  However, with effect from July 2004,
Complete secured the benefit of a contract to deliver the Jobcentre Plus
roll-out programme (part of the Department of Work and Pensions) for the
refurbishment of certain job centre branches, and is actively seeking to
increase its earnings resilience through securing further contracts in the
public non-housing sector.

Complete has approximately 40 employees.

Strategy

The Group has a clearly defined strategy to deliver controlled growth,
sustainable profits and positive cash flows through predominantly organic growth
across its complementary business streams.  This strategy is predicated on
delivering high customer satisfaction levels to promote customer loyalty, as
well as ensuring a strong internal culture, encouraging and rewarding
performance through incentivisation for achievement of stretching objectives.
The Group invests in IT systems to improve productivity and customer interface.

The Group's focus will be on securing and retaining long-term contracts across
the business, and on the geographic expansion of both Environment and Complete
from the south east, exploiting available synergies with Maintain.
Opportunities also exist for Partnerships to exploit the Group's historic
relationship with Willmott Dixon as Willmott Dixon is one of the UK's leading
social housing builders.

Once each business stream has established critical mass, the Company will seek
to secure a substantial share of the niche markets in which it operates.

Although the Directors are not actively considering any acquisitions,
opportunities to accelerate growth through selective regional or technical
acquisitions may be considered, particularly in the Maintain and Environment
business streams.

Financial Record

Set out below is a summary of the financial record of the Group for the three
years ended 31 December 2004 which has been extracted without material
adjustment from the Accountants' Report in the prospectus:


                                                       2002                  2003                  2004
                                                      £'000                 £'000                 £'000
Turnover
Continuing operations                                41,391                79,468               101,731
Discontinued operations                              20,597                 8,927                 5,541
                                                   --------              --------              --------
                                                     61,988                88,395               107,272
Operating profit
Continuing operations                                 2,013                 4,088                 6,362
Discontinued operations                               (749)                 (694)                 (112)
                                                   --------              --------              --------
                                                      1,264                 3,394                 6,250
Profit before tax                                       774                 2,758                 6,250
                                                   --------              --------              --------

In order to make a proper assessment of the financial position of the Company,
prospective investors should not just rely solely on the summary information set
out above but should read the whole of the admission document, including the
Accountants' Report.

Current Trading

The Group has traded in line with management expectations in the first quarter
of 2005. Recent contract wins include Partnerships' agreement with the Richmond
upon Thames Churches Housing Trust to maintain its social housing stock for a
period of five to seven years, and with a potential contract value of £28
million.

The Group's current order book is in excess of £300 million with an encouraging
pipeline of potential new work.

Directors

The Directors of the Company are:

Colin Enticknap FCIOB, MRICS - Executive Chairman, aged 46

Colin has over 28 years experience in the construction and support services
market, the last 18 of which have been in general management.  A graduate of
Harvard Business Schools' Advanced Management Programme, he was appointed group
chief executive of Willmott Dixon in May 1993 and steered that business through
nine consecutive years of profit growth.  He relinquished that role to become
Executive Chairman of Inspace in January 2005 but remains as (part-time) group
chairman of Willmott Dixon.

Christopher Sheridan, FCIB, MSI - Non-executive Deputy Chairman, aged 62

Christopher was appointed non-executive Deputy Chairman of Inspace in January
2005, becoming the Company's senior non-executive director.  He has been
chairman of the Yorkshire Building Society since 2001 having joined the board in
1995.  Christopher's background is in banking and the international money
markets having been head of merchant banking for Midland Bank and chief
executive of the merchant bank Samuel Montagu & Co Ltd until 1994.  He is also a
non-executive director of a number of companies in the financial services and
property sectors.

David Batchelor, ACA - Non-Executive Director, aged 55

A qualified chartered accountant, David is a former PricewaterhouseCoopers
partner with extensive commercial and professional experience in a wide range of
business sectors.  He is currently non-executive director of Easter Holdings
Limited where he chairs the audit committee.

Duncan Forbes, MCIOB - Chief Operating Officer, aged 54

Duncan is a chartered builder with over 15 years general management experience
running construction and support services businesses within Willmott Dixon.  He
became Chief Operating Officer of the property maintenance division of Willmott
Dixon in 2000 and has taken the operational lead during its growth and evolution
into the present Inspace business.

Andrew Telfer, ACA - Chief Financial Officer, aged 37

Andrew is a chartered accountant and Imperial College graduate (civil
engineering). He has held senior level corporate finance and business
development roles with Ernst & Young (London) and Spirent plc (FTSE 100 at the
time).  He has also been an independent business adviser to the Government's
Competition Commission and DTI's Industrial Development Unit.  He joined
Willmott Dixon's support service division in 2002 as Corporate Development
Director and became Chief Financial Officer of Inspace in January 2005.

Consultant to Inpace

Sir Michael Latham, DL, MA, Dip ED, FCIPS, FICE, FCIOB, FLI, FREng, FRIBA,
FCIBSE, FRIAS

Sir Michael Latham was appointed as a consultant adviser to Inspace,
specialising in partnering and 'Best Value' matters, on 1 January 2005.  He
holds a number of non-executive posts including Deputy Chairman of Willmott
Dixon and Chairman of the EC Harris Public Sector Executive and Collaborative
Working Centre.  He is the author of 'Constructing the Team' (1994) and chairman
of the Construction Industry Training Board and Construction Skills Council.  He
was a Member of Parliament from 1974 to 1992.

Key Management

The key members of senior management include:

Gerry Graville, MRICS - Managing Director, Inspace Complete, aged 36

Gerry joined the Inspace team in May 2002 and has over 10 years experience in
the design, install and furnish market.  He was previously on the main board of
directors of interior fit out specialist Maris Interiors and was a managing
director of one of its regional companies.

Karim Khan, MRICS - Managing Director, Inspace Maintain, aged 46

Karim has over 25 years experience in the construction and support services
sector.  He joined Willmott Dixon in 1988 and has held a number of different
senior management roles in the contracting and fit-out businesses.  He was
appointed Managing Director of Inspace Maintain in July 2004.

Mick Williamson, BSc - Managing Director, Inspace Partnerships, aged 38

Mick joined Willmott Dixon to head the social housing repair and maintenance
business stream in 2003 and was made Managing Director of Inspace Partnerships
in July 2004.  He had previously been managing director of one of Jarvis'
maintenance companies and has spent 14 years in the maintenance, civil and
structural engineering sectors.

Dividend Policy

The Directors' intention is that the Company will pay dividends whilst
continuing to retain a significant proportion of the Group's earnings to
facilitate the Board's plans for the continued growth of the Group.  It is
intended that the first dividend to be paid by the Company following Admission
will be the interim dividend in respect of the six months ended 30 June 2005.
After Admission, the Board intends to declare two interim dividends in respect
of the six months ended 30 June 2005.  The first, amounting to 5/6th of the
aggregate amount of both dividends, shall be paid to shareholders shown on the
register of members on 24 May 2005 and the second, amounting to 1/6th of the
aggregate amount of both dividends, shall be paid to shareholders shown on the
register of members on 1 July 2005.  On Admission, the Existing Ordinary Shares
will be ex-dividend for the first interim dividend (5/6th) payable to
shareholders on the register of members on 24 May 2005.  Therefore the New
Ordinary Shares issued pursuant to the Placing will rank pari passu in all
respects, including the right to receive the second interim dividend (1/6th)
payable to shareholders on the register of members on 1 July 2005, with the
Existing Ordinary Shares.

The Board will continue to review its dividend policy as the Company develops.


                                    - Ends -


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