Placing

RNS Number:0379B
Screen FX PLC
05 April 2006


Press Release                                                     5 April 2006



                                  ScreenFX plc



                          ("ScreenFX" or "the Group")



        Proposed Placing of 300,000,000  Placing Shares at 1p per share



                    Notice of Extraordinary General Meeting



ScreenFX plc (AIM:SFX), the digital advertising and communications specialists,
announces today that it is to raise #3 million, before expenses, by way of a
Placing of 300,000,000  new Ordinary Shares at a price of 1p per Placing Share.
 The Placing is conditional on, inter alia, Shareholder approval at an
Extraordinary General Meeting convened for 11.00 a.m. on 28 April 2006 at the
offices of Halliwells LLP, St. James Court, Brown Street, Manchester M2 2JF.



The funds raised in the Placing will be used to:


*    satisfy the general working capital requirements of the Group
*    support the roll out of the network into other premium shopping malls
*    continue to exploit opportunities in vertical markets such as transport and health



Commenting on the Placing, Dave Clark, Chief Executive of ScreenFX plc, said: "
This placing enables the Group to take the business to the next stage in its
development by allowing ScreenFX to further rollout its network into shopping
centres as well as enabling the Group to exploit opportunities in the transport
and health sectors."


For further information:
ScreenFX plc
David Clark, Chief Executive                                              Tel: [phone]
[e-mail]                                                               www.screenfx.com


Seymour Pierce Limited
Stuart Lane / John Depasquale, Corporate Finance                          Tel: [phone]
[e-mail]                                                         www.seymourpierce.com



Media enquiries:
Abchurch
Henry Harrison-Topham / Katherine Murphy                                  Tel: [phone]

[e-mail]                                                  www.abchurch-group.com





Seymour Pierce which is regulated by the Financial Services Authority is acting
as nominated and financial adviser to the Company in connection with the matters
described in this document. Persons receiving this document should note that
Seymour Pierce will not be responsible to anyone other than the Company for
providing the protections afforded to clients of Seymour Pierce or for advising
any other person on the arrangements described in this document. Seymour Pierce
has not authorised the contents of, or any part of, this document and no
liability whatsoever is accepted by Seymour Pierce for the accuracy of any
information or opinions contained in this document or for the omission of any
information.



The New Ordinary Shares will not be registered under the United States
Securities Act of 1933 (as amended) or under the securities laws of any state of
the United States or qualify for distribution under any of the relevant
securities laws of Canada, Australia or Japan, nor has any prospectus in
relation to the New Ordinary Shares been lodged with or registered as applicable
under the security laws of Canada, Australia or Japan. Accordingly, subject to
certain exceptions, the New Ordinary Shares may not be, directly or indirectly,
offered, sold, taken up, delivered or transferred in or into the United States,
Canada, Australia or Japan. Overseas Shareholders and any person (including,
without limitation, nominees and trustees) who have a contractual or other legal
obligation to forward this document to a jurisdiction outside the UK should seek
appropriate advice before taking any action.


The following information is an excerpt from the circular to Shareholders (the "
Circular") posted today.  Copies of the Circular are available at the offices of
Seymour Pierce Limited (Bucklersbury House, 3 Queen Victoria Street, London,
EC4N 8EL) upon request.  Definitions used in the Circular apply in this
announcement unless the context otherwise requires.



Introduction



The Board announced today that ScreenFX proposes, subject to certain conditions,
to raise #3 million, before expenses, by way of a Placing of 300,000,000 New
Ordinary Shares at a price of 1p per New Ordinary Share.  The Placing is
conditional on, inter alia, Shareholder approval at an Extraordinary General
Meeting convened for 28 April 2006.  In addition, the authorities necessary for
the allotment of the New Ordinary Shares pursuant to the Placing will be sought
at the EGM.  Further details of the Placing are set out below in this
announcement.



Application will be made to the London Stock Exchange for the Placing Shares to
be admitted to trading on AIM.  Subject to, inter alia, Admission, it is
expected that dealings in the Placing Shares will commence on 3 May 2006.





Background



ScreenFX installs digital flat screen advertising display networks into high
footfall destinations, such as shopping centres nationwide to deliver major
brand advertising. The Company also installs digital flat screen networks in
healthcare centres branded as HealthFX and onboard commuter trains branded as
TrainFX.



ScreenFX has signed deals with 19 shopping centres across the UK and this yields
a footfall of over 340 million consumers per annum.  ScreenFX is expected to
increase the rollout into further leading shopping centres by the end of 2006.
Through this roll-out ScreenFX is creating significant barriers to entry for
competitors by signing exclusive long-term contracts (six to ten years) with
many of the best shopping centres in the UK.



TrainFX, the Company's new division designed for transport sector media,
provides state of the art technology for premium marketing opportunities on
commuter trains. TrainFX has recently secured the Central Trains contract
covering the Birmingham commuter train network.  Advanced negotiations with
other major transport groups are in the pipeline.



HealthFX systems have already been installed and are fully operational in six
NHS locations throughout the UK, and the Company is in final negotiations to
provide similar services for a further four NHS hospitals as well as seven
private hospitals.  Within the private healthcare sector, the first phase of the
installation programme has recently been completed at two private hospitals in
the same group.



Reasons for the Placing



During 2005 ScreenFX continued to make strong progress towards its initial
objective to establish the leading digital screen network in the UK shopping
mall environment. The Company now has a fully operational network offering big
screen advertising to around 300 million consumers across 16 malls, including 8
of the top 20 UK centres. The Company has 3 further centres under long term
contract ready to install and, with a further pipeline of strong centre
prospects, expects to be able to increase the annualized audience to over 400
million shoppers by the end of 2006.



Since flotation in March 2004, a ten year agreement with Liberty International
was secured to be the exclusive provider of digital screen media in nine leading
Capital Shopping Centres, including the Metro Centre Gateshead and Lakeside
Thurrock.



During 2005 the Company secured further valuable long term contracts with the L
and the Trafford Centre Manchester. A second major phase of installations was
completed in Q4 2005 seeing live operational network grow to the current 16
locations. This progress in terms of network expansion and increased audience
has been vital to strengthen ScreenFX's leadership position in the sector, and
to deliver the critical mass required by national brand advertisers.



As announced on 28 July last year the Group signed a concession agreement with
Central Trains Limited, part of the National Express network of commuter trains,
to introduce an onboard television service on their fleet of trains. In December
2005, supported by a content supply agreement with BSkyB, the service went live
in Birmingham reaching an initial ten million passenger journeys annually. The
launch of the TrainFX service has gone well and the reception from both the
operating company management and the vast majority of passengers has been
extremely positive.  ScreenFX continues to explore the potential to develop a
valuable business in this sector and is reviewing the best route to deliver long
term focus from this sector without losing focus on the core mall business.



In December 2005 the Company also identified a low cost entry route to develop
screen networks in the health sector. HealthFX, managed by a small experienced
team has initially installed digital screen products in six locations including
both public and private sector. The product has been very well received and is
generating considerable interest from other health trusts. As part of the test
stage the Company is evaluating the potential for media and advertising revenues
in this sector.



The Directors believe ScreenFX continues to build a strong leadership position
in its sector, and has the potential to develop new business streams with
sustainable long term revenue prospects.



Use of Proceeds



The net proceeds of the Placing of approximately #2.85 million will be used to
satisfy the general working capital requirements of the Group, to support the
roll out of the network into other premium shopping malls, and to continue to
exploit the opportunity in the commuter transport sector.



The Placing



Under the Placing, the Company is proposing to issue 300,000,000 New Ordinary
Shares at the Placing Price.  The Company will raise gross proceeds of #3
million (or approximately #2.85 million net of expenses).  The Placing Price
represents a discount of approximately 12.5 per cent. to the closing middle
market price of an Ordinary Share on 4 April 2006 (the latest practicable date
prior to the printing of this Circular).



The New Ordinary Shares represent approximately 177 per cent. of the Company's
issued share capital immediately prior to the Placing.



As at the date of this announcement, the Company has an authorised share capital
of #2,400,000 divided into 240,000,000 Ordinary Shares of which 169,333,340
fully paid Ordinary Shares are in issue.  Following completion of the Placing,
the issued share capital of the Company will increase to 469,333,340 fully paid
Ordinary Shares and the Placing Shares will represent approximately 64 per cent.
of the Enlarged Share Capital.



The Placing Shares have not been and will not be offered generally to
Shareholders, whether on a pre-emptive basis or otherwise.  Following the
introduction of the Prospectus Rules on 1 July 2005 and the consequential
increase in costs and the time required for AIM companies to raise new equity
capital on a pre-emptive basis, the Directors believe that the Placing is the
most cost effective and expeditious method of raising new equity capital.



The Placing is conditional, inter alia, upon:
  *     the approval of the Resolutions at the EGM;

  *     the Placing Agreement becoming unconditional in all respects and not having been terminated in
        accordance with its terms; and
  *     Admission.




The Placing is to be effected on behalf of the Company by Seymour Pierce, on the
terms of the Placing Agreement.  Completion of the Placing is subject to certain
conditions including those listed above.



The Placing Agreement contains certain warranties given by the Company with
respect to its business and the Group and certain matters connected with the
Placing.  In addition, the Company has given indemnities to Seymour Pierce in
connection with the Placing and Seymour Pierce's performance of services in
relation to the Placing.  The Placing Agreement may be terminated by Seymour
Pierce at any time before Admission for, inter alia, a material breach by the
Company of the terms of the Placing Agreement or the warranties contained in it,
or on the occurrence of certain specified events or of certain force majeure
events.



Application will be made to the London Stock Exchange for the New Ordinary
Shares to be admitted to trading on AIM.  It is expected that Admission will
become effective and dealings in the New Ordinary Shares will commence on 3 May
2006.  No application has been or is being made for the New Ordinary Shares to
be admitted to any other recognised investment exchange.






Current trading and prospects



The Directors believe that the strong potential for out of home digital screen
networks is now being widely acknowledged by the media industry.



The ScreenFX product concept has been supported with very positive consumer
research which has demonstrated the high impact of the advertising in comparison
to the established 6-sheet formats. Initial tests of interactive promotional
content demonstrated the potential for delivering added value content to the
consumer and this element of the proposition is proving to be a compelling hook
for advertisers.



Whilst adoption of digital screen networks has generally been slow to date, the
Group is now seeing the early signs of adoption from major national advertisers.
Around 50 brand advertisers have now trialled the network since its launch and
several advertisers have made repeat media bookings.



The Group has also initiated a test of the local media sales market and initial
results are very encouraging.



The Group's strategy for longer term growth is focused on those sectors which
the Directors believe offer the greatest revenue and profit potential for media
owners in the long term.



Share option scheme



The Board has always emphasised the need to properly incentivise and motivate
its key management by way of the grant of options to allow key management to
participate fully in the Company's growth.  At the time of the Company's
admission to AIM, the Board stated its intention to set aside not more than 10%
of its issued share capital for this purpose.



It is acknowledged that the Company has made significant progress as set out
earlier in this letter.  The Board believes that David Clark and Richard Schultz
have successfully developed the Company to a position where it is about to bear
fruit as the Company is now positioned to take advantage of its true potential.
In recognition of this, it is proposed that they each be granted options over
9,386,667 new Ordinary Shares under the EMI Option Scheme.  Under the terms of
the EMI Option Scheme, the options will each be exercisable at the Placing Price
at any time after the third anniversary of the date of grant subject to the
optionholder still being in the continuous employment of the Company at that
date.  The options will be subject to measurable criteria for performance to be
determined by the Remuneration Committee of the Board.





New Ordinary Shares



The New Ordinary Shares will, when issued, rank pari passu in all respects with
the Existing Shares including the right to dividends and other distributions
declared following Admission.



Extraordinary General Meeting



Set out in the Circular is a notice convening the EGM to be held on 11.00 a.m.
on 28 April 2006 at the offices of Halliwells LLP, St James's Court, Brown
Street, Manchester M2 2JF, at which the Resolutions (as set out in such notice)
will be proposed.



The first ordinary resolution ("Resolution 1") is to increase the authorised
share capital from #2,400,000 to #6,510,000 by the creation of an additional
411,000,000 Ordinary Shares.



The second ordinary resolution ("Resolution 2") which is subject to the passing
of Resolution 1 is to authorise the Directors to allot #4,250,311.12 in nominal
value of new share capital (representing approximately 251 per cent. of the
current issued share capital as at the date of this document and approximately
64 per cent. of the issued share capital following the Placing), to allot the
New Ordinary Shares and further Ordinary Shares provided that such authority
shall expire on the earlier of the conclusion of the next Annual General Meeting
of the Company and 15 months from the date of the passing of the resolution.



The special resolution, which is subject to the passing of Resolutions 1 and 2,
disapplies Shareholders statutory pre-emption rights in relation to the issue of
the New Ordinary Shares pursuant to the Placing, and grants further authority to
allot shares up to an aggregate nominal amount of #469,333.34 provided that such
authority shall expire on the earlier of the conclusion of the next Annual
General Meeting of the Company and 15 months from the date of the passing of the
resolution unless previously revoked, varied or extended by the Company in
General Meeting.





Expected timetable of events


Latest time and date for receipt of Forms of Proxy

                                                                             11.00 a.m. on 26 April 2006
Extraordinary General Meeting                                                11.00 a.m. on 28 April 2006
Admission of the Placing Shares to AIM                                                        3 May 2006





Definitions



The following definitions apply throughout this announcement unless the context
requires otherwise:


"Act"                                      the Companies Act 1985 (as amended)

"Admission"                                admission of the New Ordinary Shares to trading on AIM
                                           becoming effective in accordance with the rules of AIM

"AIM"                                      a market operated by London Stock Exchange

"Company" or "SFX"                         Screen FX plc

"Directors" or "Board"                     the directors of the Company whose names are set out in the
                                           Circular, or any authorised committee thereof

"EGM"                                      the extraordinary general meeting of the Company convened by
                                           the EGM Notice

"EGM Notice"                               the notice convening the EGM which is set out in the Circular

"EMI Option Scheme"                        the Enterprise Management Incentive Scheme adopted by the
                                           Company

"Existing Shares"                          the Ordinary Shares in issue at the date of the Circular all
                                           of which are admitted to trading on AIM

"Form of Proxy"                            the form of proxy for use in relation to the EGM which
                                           accompanies the Circular

"FSA"                                      the Financial Services Authority

"Group"                                    the Company and its subsidiary undertakings

"London Stock Exchange"                    London Stock Exchange plc

"New Ordinary Shares"                      the 300,000,000 new Ordinary Shares to be issued pursuant to
                                           the Placing

"Ordinary Shares"                          ordinary shares of 1p each in the capital of the Company

"Placing"                                  the proposed conditional placing of the New Ordinary Shares at
                                           the Placing Price by Seymour Pierce as agent on behalf of the
                                           Company pursuant to the Placing Agreement

"Placing Agreement"                        the placing agreement dated 30 March 2006 and made between
                                           Seymour Pierce and the Company, further details of which are
                                           set out in the Circular

"Placing Price"                            1 pence per New Ordinary Share

"Resolutions"                              the resolutions set out in the EGM Notice

"Shareholders"                             holders of Ordinary Shares in the Company


"Seymour Pierce"                           Seymour Pierce Limited which is regulated  and authorised in
                                           the United Kingdom by the FSA and which is acting as nominated
                                           adviser and broker to the Company










                      This information is provided by RNS
            The company news service from the London Stock Exchange
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