Management Resource Solutions PLC Deferred Consideration Payment & Update on Trading (2836O)

TIDMMRS

RNS Number : 2836O

Management Resource Solutions PLC

03 November 2016

3 November 2016

Management Resource Solutions Plc

Payment of Deferred Consideration and Update on Trading and Suspension

Further to the announcements of 27 and 28 October, the directors of Management Resource Solutions Plc ("MRS", "Company" or "Group") are pleased to provide an update on various matters.

Bachmann Plant Hire performance payment

We are pleased to report that the unaudited earnings before interest and taxation of Bachmann Plant Hire ("Bachmann") for the year ended 30 June 2016 is within the expected range of A$2.1m to A$2.6m (approximately GBP1.3m to GBP1.6m) set out in the Company's admission document published on 11 January 2016. As such, the first deferred payment of A$1,333,333 (approximately GBP830,000) is due to the vendors of Bachmann and will be satisfied by the issue to the vendors of Bachmann of new ordinary shares of EUR0.01 each in the Company (the "Deferred Consideration Shares"), to be issued upon resumption of trading in the Company's ordinary shares on AIM.

SubZero integration continuing

SubZero has reported unaudited revenue for the first quarter of the new financial year, to 30 September 2016, of $16.4m (2015: $15.0m). The timing of the SubZero acquisition has aligned with an upturn in the resources industry, with the Newcastle thermal coal spot prices reaching USD$108 per tonne this week while Glencore, a major blue chip MRS customer, has locked in much of the recent spike in spot thermal coal pricing through a contract deal with leading Japanese Power Utility (JPU) Tohoku Electric that set the JPU September 2017-expiry thermal coal contract reference price at USD$94.75/t FOB.

MRS Services Group has changed premises in two of its three workshops and renegotiated the lease terms for the main workshop to achieve a saving in rent of $800-900k per annum. Other initiatives are being implemented to further drive down costs. The Company is at the same time recruiting relevant individuals to meet the strong market demand for its services.

Consulting Business

The Company continues to make progress investigating a number of issues within the legacy consulting business of the Group, which includes the PEAL contract and the decommissioning work announced in May 2016, and has scheduled meetings with the counterparties to the relevant contracts under review over the coming week. The directors hope to provide a further update on these issues, one of the underlying reasons for the current suspension of the Company's shares from trading on AIM, next week. The Company and its advisers continue to work to fully identify, quantify and resolve a number of matters and as soon as clarity has been achieved on these it is intended that an application be made for the resumption of trading in MRS' ordinary shares on AIM.

Chief Executive

The directors are pleased to announce that Joe Clayton, who was appointed interim chief executive of the Company and its subsidiaries on 28 October, has agreed, subject to due diligence and contract, to taking on this role on a permanent basis. Further information regarding Mr Clayton's formal appointment to the board will be announced upon the completion of the appropriate due diligence and agreement of his contract of employment.

For further information:

 
 Management Resource Solutions    c/o FTI [phone] 
  PLC                                               1000 
  Murray d'Almeida, Chairman 
  Timothy Jones, Finance 
  Director 
 Northland Capital Partners 
  Limited (Nominated Adviser 
  and Joint Broker) 
  William Vandyk 
  Gerry Beaney                       [phone] 
 Peterhouse Corporate Finance 
  Limited (Joint Broker) 
  Charles Goodfellow 
  Lucy Williams                      [phone] 
 FTI Consulting 
  Edward Westropp 
  Emilie O'Herne                     [phone] 
 

Management Resource Solutions (MRS), through its subsidiaries Bachmann and SubZero, offers plant hire, equipment repair, refurbishment and fabrication, mine rehabilitation, earthmoving, road construction and other support services to a wide base of private and public sector clients in Australia. MRS caters predominately to the oil & gas, mining, civil engineering, construction and infrastructure industries. Furthermore, MRS supplies technical and strategic consultancy services to some of the largest companies and projects across Australasia, Oceania and Southeast Asia.

This information is provided by RNS

The company news service from the London Stock Exchange

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November 03, 2016 10:33 ET (14:33 GMT)