Dyno-Rod heads for Aim share float

THE former Pan Am pilot who founded Dyno-Rod 40 years ago is to share in a £50m-plus windfall with fellow long-retired airline colleagues when the drain-clearing group finally floats on the Alternative Investment Market next month.

After several false starts over the past two decades, Dyno-Rod founder Jim Zockoll is finally selling up via the latest stock market technique of an accelerated initial public offering.

Zockoll, a 74-year-old American, is selling the business to Dyno Group, a management buy-in team aided by broker Seymour Pierce. It will at the same time list on AIM with a capitalisation of about £50m, raising £42m of new money in equity from City institutions and a further £13m from lending banks.

Zockoll, known as the Drain Brain, will retain a £5m, 10% stake in the floated business and will take the lion's share of the cash raised although up to £10m will go to former Pan Am colleagues who stumped up cash when Zockoll founded Dyno-Rod in his spare time in 1963.

The business will now be headed by Kevin Mahoney, 54, a former boss of the British end of contract services giant ISS and previously a home services executive at British Gas. The new management is likely to end up with a stake of about 15%.

Full marketing for the float begins next week with analysts expecting to be told that Mahoney plans to more than double Dyno-Rod profits within five years.

This year the business is forecast to make underlying operating profits of £6m on its £60m annual income from 89 franchisees running 500 vans engaged in the emergency unblocking and repairing of drains.

'Dyno-Rod may not be a massive company but it has a fantastic brand,' says Mahoney. 'At 90% prompted brand awareness among householders it is on a par with Cadbury's.'

Mahoney aims to increase profit margins through an overhaul of the group's IT systems under new chief operating officer Bryce Woodmansee, a 40-year-old former Accenture technology specialist who first worked with Mahoney at WH Smith in the 1990s.

It is also planned to increase the advertising spend. Its last campaign, promoting its 'Dynocologists', was three years ago. 'The business has been a bit neglected in recent years with Jim Zockoll using it as a cash machine to develop his family's other businesses,' said Mahoney.

While drains account for 85% of its business, Dyno-Rod also aims to develop its emergency plumbing and mobile locksmith operations. Its Westminster-based pest control company, Dyno-Kil, has recently been released from a non-compete legal ruling after a court spat with Rentokil eight years ago.