Green Comp Share Discussion Threads

[butchcasio] 30/7/2014 19:47

' Background to and reasons for the Offer

In December 2009, Green Compliance was restructured with the stated intention of executing a buy and build strategy to become a significant participant in in the UK "blue collar" compliance services sector. While it was able to execute some 15 acquisitions in the period to December 2011, the financial crisis which began in 2008 severely affected its on-going access to additional equity and debt funding required for it to continue to grow by acquisition and also to a reduction in the trading of each of its main units at the time that the consolidation of these units into the Green Compliance Group was being executed.

Accordingly, with on-going financial pressure, a lack of expansion capital and reduced trading, the then directors of Green Compliance embarked upon a restructuring of the business, its strategy and its financing, which culminated in the Green Compliance 2013 Refinancing which involved a write down of debt facilities and an equity fundraising of approximately £3.5 million at 1p per Green Compliance Share. The successful Green Compliance 2013 Refinancing was completed during the financial year ended 31 March 2014 which, coupled with the divestment of the Green Compliance Pest business and Green Compliance Fire business, has allowed Green Compliance to exit that financial year completely focused on its water hygiene and treatment business.

The Green Compliance Water business is now a national one stop water management company offering all forms of water treatment and water hygiene, including legionella control, water risk assessments and water sustainability projects, such as rain water capture and grey water re-use. Green Compliance Water has a direct customer list of around 750 clients, to which it provides water treatment and water hygiene compliance services via 145 employees, operating from four premises nationally. The Green Compliance Directors believe that the Company's customer reach is significantly larger than this due to the composition of the existing customer base, which includes many facilities management companies, each of which act on behalf of, in some cases, hundreds of businesses or organisations.

Continuing revenues in the Green Compliance Water business for the year ended 31 March 2014 totalled £8.1 million with an operating profit before exceptional costs, share based payments and amortisation in Green Compliance Water of £0.1 million. Green Compliance Group had net assets as at 31 March 2014 of £4.4 million.

The UK Water hygiene & treatment market

The basic definition of water treatment is the purifying of water to make it suitable for household or business use. The water treatment industry in the UK is worth an estimated £3.8 billion in 2013/14. Water treatment requirements are estimated to be split relatively evenly between domestic and commercial/industrial use. Based on the estimated industry value of £3.8 billion, the commercial areas of the UK water treatment industry are estimated to be valued at approximately £2 billion in 2013/14. A significant percentage of the market relates to the treatment of water in storage, both open and underground reservoirs. The majority of this work is undertaken by water companies, or large global businesses (e.g. GE Water, Nalco).

However, there is a significant addressable market for water treatment services with large corporate organisations, SMEs and commercial organisations such as Green Compliance Water services and this is estimated to be worth in excess of £1 billion per annum in the UK.

Under UK government regulations (Health & Safety Act 1974, ACoP (L8) 4th Edition 2013, COSHH 2002 and Water Supply Regulations 1999), anyone serving the public has a legal duty to prepare and manage a scheme for maintaining safe water quality. Hospitality and leisure facilities, healthcare providers, care homes, as well as employers in general, are therefore faced with the same obligation. As well as requiring risk assessments, organisations subject to the legislation are required to have access to competent help in applying the provisions of health and safety law, water storage and supply and specification for the design, installation, testing and maintenance of services supplying hot and cold water for use within public buildings. All these regulations are principally driven by the necessity to prevent legionella from developing in water systems.

Green Compliance Water provides a comprehensive service across the water hygiene spectrum and the Green Compliance Directors believe that it therefore has an addressable market in the UK for water hygiene services of an estimated £241 million and that this market is growing at an estimated 5 per cent. CAGR.

The main driver for this is the growing concern for companies around water sustainability as water consumption outstrips population growth; water supplies are threatened by pollution, population growth, urbanisation and climate change; water charges increase through metering and acknowledgment of the move to charging and a growing awareness from consumers of the importance of water quality, safety and security.

The Green Compliance Directors also believe that there are further opportunities to service the wider water market as it moves towards greater sustainability products and ultimately the supply of water as the market deregulates. In addition, the Green Compliance directors believe that the Green Compliance customer base and existing water management relationships with those customers gives them access to this increasing market.

The wider sustainability market

The sustainability market is a large and growing market internationally and in the UK in particular:

· the International Energy Agency estimates that investment in key energy efficiency markets worldwide was US$244 billion in 2013, and must increase to US$1 trillion by 2030 to avoid a two degree global temperature rise;

· investment is being driven by the need for businesses to take action or see profits eroded by the cost of energy and punitive legislation;

· improving economic conditions are encouraging businesses to implement strategies created over the past five years; and

· opportunities in energy efficiency will be mirrored by technologies being developed for 'embedded generation', energy storage, water and waste management.

Sustainability covers both energy and water and the Green Compliance Directors believe that a number of their existing customers include both energy and water as part of their considerations in relation to sustainability. Additionally, there is evidence to suggest that a significant number of these customers have an individual or team with responsibility for both energy management and water management. Increasingly the market is viewing these two sub-sectors together, as companies look for similar solutions to both issues and with new entrants to the market offering combined solutions to asset owners or facilities managers which are typically Green Compliance's and APC's customers. This synergy, in relation to sustainability, is also being driven by the proposed deregulation of the supply of water to businesses in England which is expected to come into effect in 2017 (2013 Draft Water Bill).

The Green Compliance Directors believe that all of these factors provide significant revenue opportunities for a sustainable water management offering that sits alongside a wider sustainability engagement with customers, as customers come to view water more and more in the same way as they view other sustainability issues such as energy efficiency and waste management.

To date APC has not been active in the water market, although it does have a stated strategy of increasing the products and services in its sustainability focused business, 'Minimise'. APC has seen significant growth in its energy efficiency focused business, which shares a common type of customer to Green Compliance in that it is typically asset owners and facilities managers which are focused on issues of sustainability.

Through APC's Minimise business it has a growing expertise, customer base and pipeline in energy efficiency related products and solutions. APC currently has three main sustainability offerings:

· Minimise Energy: these include Energy monitoring, LED lighting, boiler optimisation, solar gain reduction, remote energy control and electric motor optimisation;

· Minimise Solutions: energy procurement, energy strategy development, building accreditation, energy measurement and verification; and

· Minimise Finance: bespoke Energy Efficiency Service Agreement (EESA) funding which enables businesses to achieve energy reduction targets through an upfront reduction in capital expenditure.

The proposed acquisition allows APC to move into:

· Water Sustainability: including rain and waste water harvesting, water consumption monitoring and management, leak detection and remediation, and the management of water hygiene (especially legionella control) or water treatment needs versus water conservation needs.

The abovementioned set of water sustainability products are either currently offered by Green Compliance to its customer base or are in development by Green Compliance. In addition, Green Compliance's customer base is already actively engaged with Green Compliance in seeking to procure these products across a larger end customer base.

Following this acquisition the Enlarged Group will seek to pursue a strategy to further extend the sustainability offering into:

· Renewable energy generation: thermal solar PV-T, heat pumps, hybrid solar solutions and embedded generation; and

· Energy from waste: on-site waste processing and waste to energy generation.

[butchcasio] 30/7/2014 17:00

CEO on why they're buying GCO audio interview

[butchcasio] 30/7/2014 16:37

Maybe Bob knew that now was going to be the most favourable time to sell, if organic growth was looking unlikely, why battle it out? This could be a blessing in disguise, sure 2.5p-2p would'a been nice.


Who knows someone else may see room for a high rbis, though i doubt it.

Rather this than a "board see's no share holder value'

[21trader] 30/7/2014 16:11

And you should be asking them where all the disposal money has gone as well.

They had plenty from the placing to improve the balance sheet.

To me it stinks they bring out a positive trading update a month or so ago then
sell the company way below the current price and valuation.

I have no trouble taking hits and much bigger hits in trading I've been doing
this for 25 years but this one stinks to me !

[21trader] 30/7/2014 15:45

Keep dreaming. Aim relies on people like you who defend management who stitch up
shareholders. There was no reason at all at this stage to sell the company at a big discount.

[butchcasio] 30/7/2014 15:33

Yea, we'll see.

:-)

my current loss is not really a massive problem mate, never bought a lot as i wanted to see these results before pilling in. I'll take the APC shares and continue with my belief in the sector.

[21trader] 30/7/2014 15:31

butchcasio

lol

You are the one that keeps buying all the way down saying long term and now it's
below 1p and you have a go at me.

Your a mug to defend the company and the boss he has taken us all for idiots.

[brownie69] 30/7/2014 15:26

What a disappointing price. Why sell at a discount, whatever happened to a bid premium.

I cant imagine that those who put money in at 1p are happy that their money was used to steady the ship, improve the balance sheet, and then getting paid back at par in paper in another AIM dog.
I shall be voting against.

[butchcasio] 30/7/2014 15:25

Spoke with Bob, GCO cannot afford to exist in their current capacity.

APC seem keen to expand where GCO are going and i'm long term bullish on the water sector, not necessarily GCO as a company, its about gaining exposure to a "potentially" huge sector/industry.

i'm a buyer today.


was never here for Pump and Dump etc or none of 21traders factless ramping..

The board believe this is the only way to eventually unlock shareholder value.

no other way.

[callumross] 30/7/2014 14:43

Absolutely amazed at the dafties piling into the bidder at 35.75p and 36p in the last hour when simple arithmetic shows you can buy into the bidder at 34.5p by buying 35.5 times in GCO shares at a penny or less. I blame the education system.

[batham1] 30/7/2014 14:02

Very disappointing. As said earlier, why sell out so cheaply when things are apparently improving? Good news...a takeover bid! Bad news...unlike most takeover approaches, the price has bombed!

[liam wilson] 30/7/2014 13:55

What a pile of muck can sell zero stock.R.I.P.

[21trader] 30/7/2014 13:16

Either others are doing the same or as I wish or dream now that somebody starts
to build a stake to block the deal but at this stage it is dreaming as it's only
2 x 500k buys so far.

[callumross] 30/7/2014 13:12

Well I have just bought 355k GCO as a cheaper way of buying into APC than buying in directly. At 0.965 it will convert to 10000 APC shares at a conversion price of less than 34.5p per APC shares.

[topinfo] 30/7/2014 13:03

I thought you filtered me lmao

[21trader] 30/7/2014 12:55

Maybe I should mention PTV you were pumping at 2p recently Topinfo now 0.45p bid
and there's 100's more stocks where that came from.
I will survive it's a small hit.

[topinfo] 30/7/2014 12:53

Falling further Hatey ouuch

[1oilman] 30/7/2014 12:08

21trader i heard was mental and lives with his aunty

[topinfo] 30/7/2014 12:08

Lmao hes filtered me now after 15 years of stalking me he decides to turn off what I am saying coz he doesnt like it lmao.

21trader

30 Jul'14 - 13:07 - 624 of 625 0 1

It's only £1000 chaps I will survive made most of that today in CRND.

TOPINFO 30 Jul'14 - 13:02 - 620 of 622 2 0 (Filtered)

1oilman 30 Jul'14 - 13:03 - 621 of 622 2 0 (Filtered)

Treacle32 30 Jul'14 - 13:04 - 622 of 622 0 0 (Filtered)

[21trader] 30/7/2014 12:08

I see the net is out for stock.

Sell 1.5 million online at 0.95p you might as well hold and see if a white knight comes along.