Result of GM and Chairman's Statement

 

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RNS Number : 0469C 
Millbrook Scientific InstrumentsPLC 
05 November 2009 
 

Millbrook Scientific Instruments plc (the "Company" or "MSI plc") 
Result of General Meeting and Chairman's statement 
 
 
Result of General Meeting 
 
 
At the General Meeting of the Company held earlier today both resolutions were 
duly passed. The cancellation of trading of the Company's shares on AIM will 
therefore take effect from 7.00 am on 17 November 2009. 
 
 
Chairman's statement 
 
 
The Chairman made the following statement at the opening of the General Meeting: 
 
 
"I would like to provide a summary of the situation in relation to the Company's 
former subsidiary, Millbrook Instruments Limited ("MIL"), and where the Board 
proposes to take the Company from here. 
 
 
At the end of April 2009, prospects for MIL looked good with 2 major orders 
'about to be confirmed'.  One shipment had just been made after the year end. 
So bearing in mind MIL's budget is to sell 6 - 8 instruments per year, all was 
looking good with a possible 3 sales in the first quarter.  Various technical 
improvements were in the process of being made as well and software rewrites had 
been completed. 
 
 
As weeks progressed after April, the board became concerned when the 'imminent' 
orders were not confirmed and when no further orders were on the horizon.  The 
reason for our concern was that MIL costs run at GBP51k per month (excluding 
central costs) and, since they consist mainly of salaries to people with notice 
periods varying from 3 to 6 months, cost cannot be turned off immediately. 
 
 
The Board determined that action must be taken in early June in order to give 
ourselves time to close MIL if that became unavoidable without bringing down the 
whole Group.  On 5 June 2009 we took the decision to carry out a strategic 
review.  Staff were notified of possible redundancy and most of them agreed 
salary sacrifices or short time working.    At the same time Zeus Capital 
undertook a full marketing process on our behalf as part of the strategic review 
trying to sell MIL as a going concern. 
 
 
We had received an initial approach the previous year but the potential suitor 
had said he was not interested until MIL became profitable. As a board, we 
understood the high risk nature of MIL, with its high value low volume sales, 
but we did not consider there was a realistic prospect of a sale at a reasonable 
value at least until after FY2009 had been completed, hopefully profitably. 
 
 
Some 20 companies from large to small were contacted in June 2009 in addition to 
those shareholders who agreed to be made insiders.  Interest was shown by one 
local company and one shareholder.  The shareholder soon withdrew and the local 
company in the end made a very low offer which would also have left MSI plc with 
on-going liabilities.  The local company was a good fit as it was a major 
consulting company with a small instrumentation business wanting to expand into 
instrumentation sales.  It also had knowledge of making ToF analysers, which we 
sourced from Switzerland at great cost due to the value of the pound.  Being 
local there was also a good chance of finding employment for our staff.  The 
Board had kept MIL going as long as possible in the hope that further orders 
would materialise or competitive interest could be awakened in the acquisition 
of MIL. 
 
 
One of the original two orders did in fact come in but the other went elsewhere, 
no other had been achieved so the directors, with extreme regret, called in 
administrators in order to protect the Company's other subsidiary Micro 
Materials Limited ("MML").  At that time, MIL owed the bank GBP262,000 which was 
supported by cross guarantees from the Company and MML. 
 
 
Once in administration, the administrators attempted to sell the business as a 
going concern.  We are informed by the administrators that the local company 
came forward again but with a very low offer and a group of shareholders / 
employees made a similar offer.  We understand that the local company was 
persuaded to increase its offer and was given exclusivity as extreme urgency was 
required to preserve any goodwill and indeed give the chance to keep the one 
order alive.  This sale by the administrators has now completed and was in no 
sense a pre-pack. 
 
 
The sale of MIL, in which the Company had invested so much, by the 
administrators for a small amount gives no pleasure to the Board although it 
appears two employees might have had their jobs effectively saved.  In a small 
group such lumpy sales as MIL depended on will always have more downside than 
upside potential.  When the global market turned down, there was nowhere to go 
especially acting in the full glare of publicity which our competitors were 
quick to exploit.  It is, inter alia, to avoid any possibility of the same fate 
for MML that the Board wishes to delist.  The combination of lack of orders and 
lack of interest in buying the MIL business suggests that the original view of 
market potential which we shared was incorrect. 
 
 
Way forward 
 
 
If approved, we will register with Sharemark which provides an information 
service but more importantly a scientific auction based dealing service, 
somewhat similar to eBay. In this way realistic approximations of share value 
can be seen by all shareholders. This will provide an alternative to the AIM 
quoted figure. 
 
 
The Board has committed to remaining a PLC which provides protection to 
shareholders in excess of the already extensive CA 2006 provisions; specifically 
we are still subject to the Takeover Code. 
If we delist, Malcolm Fortnam has indicated he will step down as a director and 
I will renegotiate downwards my fee. May I say how much personally I will miss 
Malcolm's thoughtful and incisive input not to mention his clear acknowledgement 
of, and unwavering adherence to, the many and varied responsibilities that a 
director has to consider. 
 
 
 
 
+-------------------------------------+-------------------------------------+ 
| For further information:            |                                     | 
|                                     |                                     | 
+-------------------------------------+-------------------------------------+ 
| Millbrook Scientific Instruments    |           Tel: [phone] | 
| plc                                 |       www.millbrook-instruments.com | 
| Stephen Blank, Chairman             |                                     | 
| Paul Grasske, Chief Executive       |                                     | 
| Officer                             |                                     | 
|                                     |                                     | 
+-------------------------------------+-------------------------------------+ 
| Zeus Capital Limited                |           Tel: [phone] | 
| Alex Clarkson                       |                                     | 
| Tom Rowley                          |                                     | 
|                                     |                                     | 
+-------------------------------------+-------------------------------------+ 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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