Disposal of Division

 

TIDMTWE 
 
RNS Number : 1314L 
Twenty PLC 
30 April 2010 
 
                                   TWENTY PLC 
                                   (AIM: TWE) 
 
                          ("Twenty" or "the Company") 
 
                              Disposal of Division 
 
 
Introduction 
 
The Board of Twenty, an investment vehicle focusing on the marketing services 
sector, announces that it has entered into a conditional agreement for the sale 
of the entire issued share capital of DFPP (DF Property Portfolio Limited, the 
holding company of Dataforce Interact Limited ("Interact")) to HOV Global 
Services Holdings Limited for an initial consideration of GBP7,239,610 ("Initial 
Consideration") plus deferred consideration of GBP2,953,500 to be paid over two 
years ("Deferred Consideration"). 
The Initial Consideration is subject to adjustment depending on the value of the 
net current assets and net cash position of the Interact Group at completion of 
the disposal ("Completion") and the net debt position between Twenty and its 
remaining operating subsidiaries (together, the "Remaining Group") and the 
Interact Group at Completion.  Interact has an invoice financing line with 
Lloyds TSB Commercial Finance Limited which will be satisfied at Completion. 
The Initial Consideration to be paid at Completion will be reduced by the amount 
required to settle this facility. 
The proceeds of the disposal will be used to fully repay all bank debt of the 
Remaining Group following the disposal and to provide working capital and 
acquisition funds to accelerate Twenty's strategy of becoming a market leader in 
the development and deployment of digital integrated marketing platforms in the 
UK. 
Background to the Disposal 
Pursuant to a group reorganisation ("Group Reorganisation") in August 2009, DFPP 
 transferred its database management and analytical services business to 
Dataforce Online Limited (a wholly-owned subsidiary of Twenty), its group 
management function to Dataforce Central Services Limited (a wholly-owned 
subsidiary of Twenty) and its customer interaction and outsourcing business to 
Interact (a wholly-owned subsidiary of DFPP). 
The purpose of the Group Reorganisation was to create a clear distinction 
between the digital marketing side of the business, which now takes place 
through the Remaining Group, and the customer interaction and outsourcing part 
of the business which now takes place through Interact. 
The Company has decided that it does not have sufficient resources to be able to 
pursue a dual strategy of developing the Interact customer interaction and 
outsourcing service lines, in addition to driving forward with the speed 
required to capitalise on the opportunity within the data and digital marketing 
arena operated through the Remaining Group. 
The Group Reorganisation took place on 26 August 2009 which means that the 
results of Interact and the Remaining Group are not reported separately in the 
interim results of Twenty for the six months ended 30 June 2009 (announced on 30 
September 2009).  However, the Directors estimate that the unaudited profit 
before tax of the business now operated by Interact for the six months ended 30 
June 2009 was approximately GBP877,000 and that the business operated by the 
Remaining Group for the six months ended 30 June 2009 made an operating loss of 
approximately GBP638,000. 
 
 
Current trading and prospects 
Since the Group Reorganisation, the Remaining Group has focussed on the data and 
digital marketing space. The Company believes that this space is continuing to 
grow and the Remaining Group is well placed to take advantage of this demand. 
Following the disposal, the Company intends to continue to focus on further 
developing its digital integrated marketing capabilities around the specific 
product areas of e-commerce, consumer data, data analytics, database development 
and hosting, social media, e-mail, SMS and deployed multi channel marketing 
platforms through the Remaining Group. 
The Directors believe that the recent acquisition of Moveme (announced on 1 
February 2010) has given the Company an ability to access consumer data and 
combine that data with the activities of the Remaining Group to deliver 
integrated solutions to existing and potential clients. 
The Company has also relocated the e-commerce business carried on by Ominor 
Limited from London to the Remaining Group's headquarters in Milton Keynes and 
invested in developing a new marketing platform to combine the online business 
with the database marketing platforms to create a new product suite to take 
advantage of the growth in fully channel integrated marketing solutions. In 
addition to the integration of the digital and data businesses the Company has 
reduced its operating overheads.  The Company has also signed in April 2010 a 
data channel partnership agreement with the Royal Mail to exploit the value of 
the Royal Mail's data assets in partnership with the Moveme business. 
The Remaining Group is trading broadly in line with the Directors expectations 
and the Directors believe that following the disposal, the Remaining Group will 
be well placed to make an impact in the digital marketing space. 
General Meeting 
The disposal is deemed to be a disposal resulting in a fundamental change of the 
Company's business for the purpose of AIM Rule 15 and is therefore conditional, 
inter alia, on the approval of the Company's shareholders which will be sought 
at a General Meeting to be held at 10:00 a.m. on 18 May 2010 at 9-13 St Andrew 
Street, London EC4A 3AF.  A circular and notice of General Meeting will be 
posted to shareholders in relation to the disposal. 
 
Enquiries: 
 
Twenty Plc 
                    Tel: [phone] 
Ian Lancaster, Chief Executive 
Daniel Stewart & Company plc 
       Tel: [phone] 
Emma Earl/Tessa Smith 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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