Entrepreneur Rod Flavell has £3 million to spend after FDM, the computer services group he set up in 1991, floated on the Alternative Investment Market (AiM).

FDM, which supplies highly-trained IT staff to big banks and Government clients, raised £7.5 million, after expenses, when it debuted on London-based AiM last week.

It is understood Mr Flavell sold more than one million shares at 78p each in the flotation and held on to 12.5 per cent of the issued share capital after the float, which valued the group at £18.8 million.

About £3 million of the money, raised via a placing of 4.5 million new shares with institutional investors, will be ploughed back into the company in Trafalgar Place, Brighton.

Some of this will be used to help increase the number of FDM's own consultants, which it trains up itself before placing with clients.

More sales staff will be employed to help cross-sell products and the FDM Academy, the group's computer training scheme, will be expanded.

Furthermore, the board said it would consider buying businesses which would complement FDM's "growth strategy".

Mr Flavell, FDM Group's chief executive officer, said: "Through three difficult years in the IT services market, our innovative business model allowed us to continue to grow our profits and develop our business.

"In 2001 we took the decision to focus on the JAVA area of the IT market and we are well positioned to capitalise on the increase in demand in this area."

Last year, FDM generated turnover of £33 million, up from £26 million in 2003, while pre-tax profits almost doubled to £1.85 million.

However, gross margins fell because the company had to use more freelance staff to satisfy increased demand.

The group, which has offices in the UK, the US, Germany and Luxembourg, has about 100 clients including Deutsche Bank, JP Morgan, EDS, the BBC and the NHS.

Rod Flavell was appointed chief executive in 2001 and instigated a cost-cutting exercise, reducing annual costs from £7.4 million to £4 million in 2003.