Trading Statement

    RNS Number : 0274X
  Teleunit S.p.A
  18 June 2008
   

    Teleunit S.p.A.

    ("Teleunit", "TLU", "the Group" or "the Company")

    Update in Advance of Preliminary Results


    In the March 7th and April 1st RNS releases, the Group disclosed that an agreement had been reached with Telecom Italia regarding
long-overdue receivables owed, as a consequence of which the Group would not meet 2007 market expectations. Related to this, the Group has
booked exceptional costs amounting to EUR3.6 million, of which EUR2.9 million relate to the write-off of uncollected receivables, EUR350,000
to an increase in direct costs attributable to the Premium Access division and the balance to consultancy fees and associated expenses. The
settlement is for an amount of EUR9.8 million, of which EUR7.1 million cash has been received; a further EUR2.7 million is expected
following a ruling by the AGCOM (the Italian Telecoms regulator) in the next few months. 

    In addition the Board wishes to announce that, as a result of the effect of a potential change in regulation related to the Premium
Access market, it has booked an impairment charge against investments in its associates, Pro-Advertising and Starline, for EUR4.2 million.
An additional emphasis on accounting prudence has led the Board to include further exceptional items of EUR1.2 million in the Results, of
which EUR400,000 relate to bad debt write-offs and provisions connected with wholesale and retail clients, with the balance relating to an
EUR800,000 provision against a contingent tax liability associated with Teleunit's listing on AIM in 2004. The tax benefit, originally
offered by the Italian Government and then overturned by the European Union in 2005, is expected to be annulled and repayable in 2008. As
such, this sum, previously set aside as a reserve in net equity, has been booked as a provision in 2007. 

    Concurrently, the Board is pleased to announce that it has signed an agreement with a major Italian bank's Venture Capital subsidiary
for the sale of a minority stake in its Mobile Content Services business, Neomobile, for a total cash consideration to TLU of EUR23 million.
TLU will receive EUR10 million from the Venture Capital company in exchange for a 20% stake, EUR1 million from Neomobile's Managers in
exchange for a 12% stake and EUR12 million in new debt, thus providing an important contribution to TLU's working capital. The Transaction
values Teleunit's residual holding of 68% of Neomobile at EUR34 million which represents a substantial premium to the current AIM market
capitalization, and will result in a material injection of cash to the Group's balance sheet. The closing of the Transaction is subject to
the raising of EUR13 million debt financing (EUR1,0 million of which will be used to fund expenses related to the Transaction) and Antitrust
approval. Although the Board believes that conditions for completion will be met by end July, no guarantees on the successful closing of the Transaction can be provided at this time. 


Neomobile (formerly the Mobile Content Services division of Teleunit, which became Neomobile in February 2007) made profits before tax of
EUR2,005,000 for the year ended 31 December 2006 and had net assets at that date of EUR1,983,000.

    Further information on the aforementioned items will be provided when the Group announces its Preliminary Results for the year ended
31st December 2007, on 20th June 2008. 


    For further information:

    Teleunit S.p.A
    Gianfranco Cimica, CEO                Tel: + 39 075 528 3939

    Daniel Stewart & Company plc
    Paul Shackleton                              Tel: + 44 (0) 207 776 6550




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