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Real-Time news about Retec (London Stock Exchange): 0 recent articles
|masurenguy: 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.|
|shot in the dark: 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.|
|chairman2: No sign the directors give a damm about the share price
the lower the better ]they get more options that way|
|masurenguy: Interesting to note that 95% of the consideration is in shares that is based upon a projected valuation of 5p. At the current market price of 1.875p the shares are actually valued at £93,750 or just 37.5% of the assigned valuation of 5p. The convertible loan potentially underwrites this on the basis that it can be converted into shares prior to September 2010 at the share price ruling at the time but presumably with a cap of 5p.
Looks like an interesting and synergetic deal without a major drain on cash upfront !
2 September 2008
RETEC DIGITAL PLC
Acquisition of ODD London Limited
Retec Digital Plc, the multi-channel marketing services company and one of the
UK's largest provider of guided selling solutions which counts Tesco, Asda and
Sainsbury's amongst its clients, is pleased to announce that it has acquired
the entire share capital of ODD London Limited ("ODD"), a specialist design and
marketing agency. Retec Digital is paying a consideration of £540,000 satisfied
by the issue of 5,000,000 shares priced at 5p, £260,000 as a convertible loan
repayable by September 2010 and a further £30,000 in cash.
ODD is a design-led communications agency whose client list includes Kickers,
Kiss, New Look, Nike, Sony and Westfield. It has a multi-disciplinary offering,
which ranges from product design to fully integrated marketing campaigns. In
the year to 31 December 2007, ODD had an unaudited turnover of £2,206,000 and
profit before tax of £54,000. Its unaudited gross assets at 31 December 2007
were £667,000. The acquisition of ODD will provide Retec with several opportunities for growth resulting from the extension of the Group's product offering, which will significantly enhance Retec's range of capabilities and the acquisition of ODD's client list.
Application has been made to the London Stock Exchange for the 5,000,000 new
ordinary shares to be admitted to trading on AIM. It is expected that admission
of the new ordinary shares will become effective on AIM and that dealings will
commence at 8.00 am on 4 September 2008. The new ordinary shares will, when issued and fully paid, rank pari passu in all respects with the existing ordinary shares of the Company and will be issued subject to the memorandum and articles of association of Retec. Following this allotment, the total issued share capital of the Company will increase to 164,324,664 ordinary shares.
John Cole, CEO of Retec, stated: "We are delighted with the acquisition of ODD,
which will complement our purchase of Liquid Digital earlier this year and
further consolidates Retec's strong position in the digital media market. The
ODD creative team brings with it an impressive client base and significantly
extends Retec's range of capabilities in the fields of brand marketing,
advertising and kiosk design."
Nick Stickland and Simon Glover, joint Managing Directors of ODD, commented:
"We are very happy to be joining forces with Retec. We have worked together on
a number of successful projects to date and this acquisition will allow us to
further develop our digital expertise and accelerate growth for both ODD and
the rest of the Retec Group"|
|timbo003: There is another research note over from equity development for those of you who are interested, although I doubt if it will have any influence on sentiment (or the share price) in the short term. Retail and small cap are not the flavour of the month (understatement) at the mo'.
|chairman2: isuing shares for almost zero net assets worries me a bit
after the placing earlier shows that boosting the share price is
just not a management priority here.|
|timbo003: I went to a Charles Street Securities (CCS) investor meeting yesterday morning, Retec had a 30 minute slot, I was quite impressed. John Cole (the CEO) reckoned they will have £7M turnover this year and a small profit and he was quite bullish regarding growth potential, with details of how Retec would acheive this.
Gerry Mizrahi (big cheese at CCS), stated that he thought that Retec should spend profits on share buybacks to get the share price up some, and then go for a sale at 8 - 10p within a fairly short time frame. John Cole disagreed, and said they should continue to spend spare cash on organic growth and acquisition and look for a sale (to IBM or NCR) at around 20p/share in a longer time frame.
Either of those would suit me!|
|run rabbit: This company is well positioned in the market and a couple of good contracts should see the share price much higher.Been a fair bit of buying recently and being new wonder if the company is a bit leaky? Can anyone advise?|
|masurenguy: Just goes to show how much drift and volatility there can be in the share price of an emerging small cap with no newsflow over a 10 week timeframe.
After drifting down by nearly 40%, since the interims in Febuary, there is suddenly a 24% increase in the share price without any news and a paltry volume of 63,670 shares (12.15pm) which has a total value of less than £2000 !|
|wonder boy: Anyone else seen the Charles Stanley note? Target price 5p. I've spoken with the co. today and they continue to trade in line with CS expectations.
Recent weakness in share price due to a relatively large seller. Hopefully this is largely behind us.
Apparently there are some v. interesting contract negotiations going on with existing and new customers. Revenues are building ahead of budget on existing contracts.
Trading on just 4x prospective earnings. Bigger bargain today than ever before.|
Retec share price data is direct from the London Stock Exchange