|I decided not do either of the offers.
Looking at the management incentive scheme, it looks like they are aiming for a trade sale at around £1,500K per share, that equates to circa 7.5p per share in old money, taking into account the recent share consolidation.
That will do for me, most of my shares qualify for EIS tax relief (no capital gains), and my average purchase price is around 2p (in old money).|
|Nice trading update came through on e-mail today "Business update for Retec Digital to 30 September 2010"
I'm still pondering whether to participate in the loan note offer and/or the share offer.|
|To answer the EIS question in my previous post, I opted to e-mail the company.
See correspondence below
I think I will probably do a small top up, it feels like that a profitable exit is around the corner
Quick question: What would happen if an investor subscribed to new shares under the offer, then claimed the EIS 20% income tax relief and then the company were bought out within 3 years (which seems a possibility), would the investor retain the 20% income tax relief, or would it have to go back to HMRC?
If the shares are sold within 3 years of issue for a price equating to no less than the subscription amount, yes income tax relief (and CGT exemption) is withdrawn and the investor would have to pay back 100% of the income tax credit. However, I would hope we are all happy at that point!
If sold for less than the subscription amount the income tax relief is proportionately withdrawn with partial repayment of income tax credit
|Yes, interesting developments.
* there is also a loan note offer too with warrants attached (1 warrant for every £2K of loan notes subscribed for), the warrants exercise price being £500.
* the new shares on offer will qualify for EIS tax relief, but if the company were to be bought out (which is obviously the intention) within 3 years, would subscribers be able to retain the 20% income tax relief?
* There almost 3.6 million (old) ords cancelled in the share consolidation, equivalent to about 1,800 new ords, and given that there only 8,132 new ords currently issued, this cancellation has effectively boosted the NAV per share by over 20%, it also indicates that there must have been an awful lot of shareholders on the register who held less than 20K old shares who did not take advantage of the last top up offer to take them up to 20K or multiples of 20K old shares|
|Now received email from the FD - fund raising at £500 per share|
|Email from broker this morning saying:
Hi, received details of this offer in our post:
Retec Digital Open Offer: GBP 500.00 per open offer share; and/or 7.5% Loan Notes (with warrants).
Anyone got any further details on this?|
|You have the opportunity to subscribe for up to 20,000 new shares at 2p, so why not take up the offer and buy another 10,000 shares, that way you will qualify for one new share on consolidation, if you don't subscribe, you will end up with nothing.|
|yeah that's a real bummer I held on to 10,000 shares for all this time hoping I'd eventually see a return but the MFs have nowskinned me of the small amont of money I still had in here as well... stinks!|
a shot in the dark
|20,000 : 1 consolidation proposed|
|I'm still in this one, and will check in from time to time.
It will be interesting to see what the matched bargains prices are like once they get this up and running, though I expect to be in this until it gets sold off in a couple of years' time.|
|Don't know if anybody still checks in here but...
You can get added to the email distribution list for the RET investors quarterly update by emailing [email protected]igital.com
I've just done it and the 31st March letter was quite good.|
|timbo003 - I'm sure they are, but buying now only for those who are prepared to wait - with no news - for years|
|A couple of 100K buys today, I wonder if its the directors or other insiders
I reckon the directors will be looking for condiserably more than the last placing price (2.5p/ share) in which they participated, for a trade sale|
|The directors should realise the reason the shareprice is low is because currently they have not been making any profit and it's taken longer than expected to achieve profitability (and their blue chip clients will most likely scale back expenditure).
I think the main reason for de-listing would be:
a) no-one wants to invest at anything other than a substantial discount vs. shareprice - Will the directors want to give away a large percentage of the company at discount price - no
b) They will need the £150k to cover lost business in the coming year IMO
c) The directors realise their 'quids in' options that were at a big discount to market price are effectively worthless under a substantial dilution scenario
Hope all works out well for holders, but this has been on the decline since the reverse acquisition. If you can afford to wait 4 - 5 years you may well be rewarded - perhaps with a floataion once the business model is tried an tested|
|Just bought another 100,000, 0.638p/share seemed too cheap!|
|the listing has no point, you couldnt sell in quantity in any case.
Hope the trade sale timeframe comes good!|
I might buy a few more before they delist, presumably the trade buyers they have in mind are IBM or NCR|
|Proposed De-Listing from AIM (Retec)
Retec Digital PLC
Proposed delisting from AIM of the London Stock Exchange
The Company today announces that it is proposing to cancel the admission to
trading on AIM of its Ordinary Shares.
Reasons for the De-Listing
The Directors have been considering for some time the merits or otherwise of
the Company's Ordinary Shares continuing to trade on AIM. The following factors were taken into account during their review:
* the Group has grown organically and from targeted acquisitions during the
last three years and yet the market capitalisation of the Company is lower
than when it came to market in September 2006;
* Retec Digital, like most other small listed companies, suffers from a lack
of liquidity for its shares and, in practical terms, a small free float and
market capitalisation, which reduces demand. This low liquidity is coupled
with the high costs associated with our listing on AIM (approximately GBP
150,000 per annum);
* the current economic turmoil has led to significant falls in the values of
global stock markets, from which Retec Digital is not immune. The stock
market tends to operate on a short term investment horizon which has little
basis in the underlying fundamentals of a business such as Retec Digital.
The susceptibility of the share price to the wider general equity market
conditions is not to the benefit of the business and in particular hampers
the Group's ability to raise funds and continue its targeted acquisition
* in the opinion of the Directors, the most likely exit route for
Shareholders will be via a trade sale within the next two to three years as
the visibility of the business grows amongst potential acquirers. The
Directors believe that the proceeds from a potential trade sale will be
maximised without reference to an underperforming share price.
The Directors strongly believe that for the reasons referred to above, the
Company should seek the cancellation of the admission of its Ordinary Shares to
trading on AIM.
On 28 October 2008, the Group announced its preliminary results for the year
ended 30 June 2008 which were prepared in accordance with the International
Financial Reporting Standards. On this basis, the Group showed an operating
profit from continuing activities before amortisation of intangibles and share
based payments of GBP22,000 (2007: loss of GBP424,000) and an overall loss of GBP 288,000 compared to a loss of GBP996,000 in the previous year. Turnover for the Group was up from GBP4.1 million in 2007 to GBP6.2 million in 2008 as the business continued to expand both organically and through further execution of the Group's targeted acquisition strategy.
As the financial year ending 30 June 2009 has progressed, the rate of organic
growth of the Group has slowed. The Directors believe the slow down is
attributable to the impact of the well documented recession within the United
Kingdom and its effects on the retail sector in particular. However, in
response to the economic environment, the Group has sought targeted
acquisitions that can be integrated easily with the Group's existing
capabilities and in some cases adding new recurring revenue streams. The Group
has also sought to reduce overheads, including the saving arising from the
De-Listing. Given changes already implemented within the Group, the Directors
remain cautiously optimistic about the next 12 to 18 months.
The principal business of the Company remains the provision of innovative
customer communication solutions and self service devices for consumers in a
retail environment. The Group is aimed at building a business capable of
servicing the communication, marketing and fulfilment needs of its customers,
whether in designing or creating new applications, or in building and
maintaining the physical installations in a customer location. To achieve this, the Board has sought growth both organically and by targeted acquisition.
The acquisitions made by the Company to date include a maintenance and
installation business, Media 4 UK Limited, a multi-media creative business,
Liquid Digital Limited ("Liquid"), a design-led communications agency, ODD
London Limited ("ODD"), and a contract to supply photo booths to Wm Morrison
Supermarkets plc. The Directors believe that all of these acquired services and capabilities are key components in being able to deliver a turn-key service and not only do these businesses bring capabilities but also access to new retailers and leading brands.
To date the Group has been focussed on serving leading retail customers within
the United Kingdom including Sainsbury's, Tesco, Wm Morrison, Argos and Boots.
The Directors believe however, that the Group's products and services are
applicable to a wide variety of major industries and across international
Following the De-Listing, it is the intention of the Board to continue to
operate the Group's business in the same manner, and with the same objectives
and strategy, as at present. The Directors intend however to seek to sell the
Group via a trade sale within the next two to three years post the De-Listing
to realise value for Shareholders, as in the opinion of the Directors this is
the most likely way for Shareholders to maximise value in the medium term.
Rule 41 of the AIM Rules requires an AIM company which wishes the London Stock
Exchange to cancel admission of its Ordinary Shares to trading on AIM to notify such intended cancellation and separately inform the London Stock Exchange of its preferred cancellation date at least twenty business days prior to such date. The cancellation is conditional upon the consent of not less than 75 per cent. of votes cast by Shareholders given at the EGM.
The Notice of EGM contains a special resolution which proposes that the
Company's admission to trading on AIM is cancelled. Subject to the requisite Shareholder approval, the De-Listing is expected to be effective from 7.00 am on 23 February 2009.
Following the De-Listing
The Directors are aware that Shareholders may still wish to acquire or dispose
of Ordinary Shares. The Directors intend to make available a new matched
bargain service via J P Jenkins Limited, a trading division of IAF Securities
Limited. Further details of this and other matters affecting Shareholders will
be made available by the Company on the Company's website at
www.retecdigital.com and directly by letter or e-mail where appropriate.
Shareholders should note that following the De-Listing the Company will remain
subject to the provisions of The City Code on Takeovers and Mergers, on the
basis set out in those provisions.
Extraordinary General Meeting
An Extraordinary General Meeting is being convened to be held at the offices of Edwin Coe LLP, 2 Stone Buildings, Lincoln's Inn, London WC2A 3TH, on 10
February 2009 at 11.00 am, at which a resolution which seeks Shareholder
approval for the cancellation of the admission to trading on AIM will be
proposed. To be effective the resolution must be passed on a show of hands or
on a poll by at least 75 per cent. of those Shareholders present in person or
(being a corporation) present by a duly authorised representative or by proxy
and voting at the Extraordinary General Meeting. If this resolution is passed by Shareholders at the EGM then it is anticipated that the cancellation of the admission to trading on AIM of the Ordinary Shares will become effective from 7.00 am on 23 February 2009.
A circular has today been posted to Shareholders with a Notice of Extraordinary General Meeting to approve the De-listing.|
|Normally I am suspicious of conspiracy theories
but its hard to refute your commens and observations.
Have you tried sending them to the company?|
|So the directors have lent money to the company on the same terms as Meadowside Leasing Limited and Trafalgar Capital Specialised Investment Fund. ie 9% per annum. Not a bad rate of return on a one or two year investment given current market trends.
Also they've raised: £400,000 from Meadowside Leasing Limited, £225,000 from Trafalgar Capital Specialised Investment Fund and £125,000 of Convertible Loan Stock to the Directors. That's £750,000 to buy assets worth £450,000
for the trading assets associated with the Morrisons' Contract. Possibly the remaining £300,000 will burn on management/consultancy fees or set up charges and one off expenses associated with the acquisition and running of the new venture. Whereas the lenders and directors will probably see their money back with interest, in my opinion they are not investing in their own company with the intention of getting a return from the share price or dividends, a 9% return on capital and a fee from the new venture will see them good.
I invested in the cash shell that reverted into Retec several years back and since that time i have seen my investment reduce by over 85% with various stock consolidations and new issues diluting the price. The Directors get their fees in the here and now I will get a return on my holding in the never never???
Personally I am fed up with the financial walnut trick going on here. The only current upside on this one is that the directors think they will be around for another year or so... The share price never goes up on good news contract wins or acquisitions it just gets diluted further and further.|
shot in the dark
|Thanks for the spot and update backmarker
I am leery of AIM growth companies that pitch their all on expanding the business rather than expanding the value of what they already have,
I am suspicious of a business model that supplies all four big chains
- they are mutually suspicious and dont like suppliers who can possibly
share details of their expansion, trading, and merchandising strategies
This has to be a headache for Retec.
I too was interested in the financing - but query whether the deal is
good for the lenders or the borrowers in these hard times. AIM
companies are not noted for having first class finance directors.
In my view the jury is still out and this deal will do little
to lift the shares until and if it shows through in performance.|
|On the face of it this doesn't sound too bad. Gets an "in" to Morrisons, which completes the list of big-four supermarket customers. Although CVD was loss-making I assume RET would not have made this purchase unless they could see profit from it, although the magic words "earnings enhancing" were not used.
Also, it shows that RET is able to get financing, even if from related parties, in these dire times. Is it safe to think that the related parties have invested because they are able to gauge this as a good deal ?
One positive aspect, the £1.8m p.a. revenue from the photo booths should be in cash. Although we don't know the operational and service costs of this, it would be surprising if RET couldn't make a reasonable margin from this, helping it towards full profitability by year-end.|
|Wm Morrison Contract
10 November 2008
RETEC DIGITAL PLC
("Retec" or "the Group")
Acquisition of vending business
Retec Digital Plc, the multi-channel marketing services company and one of the
UK's largest providers of guided selling solutions, is pleased to announce that
it has acquired the contract to supply photo booths to Wm Morrison Supermarkets
plc ("the Morrisons' Contract") from the Administrators of the Consolidated
Vending Plc ("CVD") group.
On 15 September 2008, CVD was suspended from trading on AIM under the ticker
code CVD and announced that it had appointed Tenon Recovery as Administrators
under the terms of the Insolvency Act 1986. Retec, which counts Tesco, ASDA and
Sainsbury's amongst its clients, has paid a consideration of £450,000 in cash
for the trading assets associated with the Morrisons' Contract.
CVD reported revenue for the year ending 31 December 2007 from continuing
operations of £3.4 million, which is segmented as £3.0 million from photo
booths and £0.4 million from children's rides. The loss before taxation for the
year ending 31 December 2007 was £1.2 million.
The Morrison's Contract represents approximately 60% of the photo booth
turnover of CVD. The Board believes that combining the Morrisons' Contract with
Retec's existing retail activities will provide good opportunities for
efficiency savings and enhanced customer support across the Group's nationwide
The consideration, costs and working capital for the acquisition is being
financed by a loan of £400,000 from Meadowside Leasing Limited ("the Meadowside
loan"), the issue of a further £125,000 of Convertible Unsecured Loan Stock
announced on 5 September 2008, and from a loan of £225,000 from Trafalgar
Capital Specialised Investment Fund ("the Trafalgar Loan").
The Meadowside loan is secured over the assets of Retec, bears interest at 9%
per annum and is repayable in 12 months' time. The Trafalgar loan bears
interest at 9% per annum, is unsecured over the assets of a new subsidiary,
Media 4 Self Service Limited, formed to acquire the Morrison's Contract, and is
repayable in 24 months' time.
Of the £125,000 of Convertible Loan Stock to be issued in connection with the
acquisition, £20,000 will be issued to Sir Brian Ivory (Chairman), £25,000 to
John Cole (Chief Executive), £20,000 to Charles McKay (Finance Director), £
15,000 to Bryan Ellis and £5,000 to Ian Deste both Non-Executive Directors of
the Company. The issue of the Convertible Loan Stock is a transaction with a
related party. The terms of the issue of £125,000 of Convertible Loan Stock to
the Directors is on an arm's length basis and on the same terms as the Creation
of £650,000 Convertible Unsecured Loan Stock, as announced on 5 September 2008.
The Directors consider the terms of the transaction to be fair and reasonable
insofar as shareholders are concerned.
John Cole, CEO of Retec, stated: "We are delighted with the acquisition of the
Morrisons' Contract, which will provide a number of synergies with our existing
field engineering team. Through this transaction we are able to provide a more
comprehensive and efficient field engineering service to all our customers
across the UK."
Roger Owen, Property Director, Morrisons said: "We are pleased to have secured
this agreement with Retec and look forward to exploring opportunities for
growing the business we do together."
- Ends -|
|No sign the directors give a damm about the share price
the lower the better ]they get more options that way|