RNS Number:7054K
Telephone Maintenance Group PLC
19 October 2006
This announcement replaces the version released at 7am this morning under RNS
number 6888K. Please note that this is purely to amend a formatting error and
there is no content change.
Acquisition of Datatel (UK) Limited ("Datatel") for #350,000
Telephone Maintenance Group Plc ("TMG"), a specialist telephony solutions
provider to business users, is pleased to announce that it has completed the
acquisition of Datatel (UK) Limited which specialises in telephone systems,
computer and voice cabling and fibre optics for a consideration of #350,000.
For the year ended 30 November 2005 the unaudited accounts of Datatel showed a
profit before tax of #121,884 on a turnover of #517,794. As at 30 November
2005, the unaudited draft financial accounts showed the net assets of Datatel
to be #133,204.
The consideration payable to the vendors of Datatel on completion of the
acquisition is #350,000, of which:
* #200,000 to be paid in cash on completion;
* #75,000 to be satisfied on completion by the issue of convertible loan
notes redeemable in tranches of #25,000 no earlier than six months
after completion; and
* #75,000 shall be satisfied on completion by the allotment to the
vendors of 100,000 ordinary shares of 5 pence each credited as fully
paid in the capital of TMG ("Ordinary Shares") at 75 pence per share
Dealings in these consideration shares are expected to commence on AIM on 20
October 2006.
Jeff Williams, Chief Executive of TMG commented on the acquisition:-
"Datatel (UK) is an established company and is well regarded in the industry
with a geographic presence in Wales. Starting over ten years ago it was well
positioned to take advantage of the deregulation provisions of the
Telecommunications Act.
While Datatel offers many similar services to TMG, it does so to a different set
of customers. Datatel also has core strengths in complementary telecoms related
areas including fibre optics and structured cabling - all of which will broaden
the range of expertise which the enlarged Group is now able to offer. In
addition, the Welsh presence creates a new opportunity for the enlarged Group to
make significant in-roads into the principality.
Continuity will be provided as co-founder John Gooch is remaining as a senior
engineer of Datatel to manage and develop the business in conjunction with
ourselves.
Historically, Datatel has grown its revenue streams which, at the price we have
paid the board believes this deal does and will continue to enhance trading
performance through the growth of TMG."
Placing
The Company is pleased to announce that it has raised #750,000 through a placing
of 1,190,476 new Ordinary Shares at a price of 63 pence per share.
The funds will be used as to #200,000 as consideration for the acquisition of
Datatel, with the balance being used for working capital for the enlarged Group.
Dealings in the new Ordinary Shares are expected to commence on AIM on 20
October 2006.
Loan and Preference Share Conversion
TMG is pleased to announce that the Convertible 10% bearing loan notes totalling
#400,000 have been converted into 634,920 new Ordinary Shares. In addition
#140,006 of Convertible 10% Preference Shares have also been converted into
222,231 new Ordinary Shares.
The debt to equity conversion significantly strengthens the balance sheet and
reduces the annual interest burden on the business.
The Board would like to thank the loan and preference share holders for their
support and confidence in the continuing growth of the business.
Dealings in the new Ordinary Shares arising from the conversion of the loan
notes and preference shares are expected to commence on AIM on 20 October 2006.
Board changes
The Company announces the following board changes.
After seven years as Directors Mr D M Saunders (Non-Executive Deputy Chairman)
and Mr J F Williams (Non-Executive Director), have stepped down from the Board
as of 20 October 2006. Both have provided valuable financial and advisory
support to the Company and the Board express its thanks to them for their
contribution over the years. Lord Razzall will continue to serve the Group as
non-executive Chairman.
The board of TMG is very pleased to announce that effective from 20 October 2006
the Company has appointed Mr Frank Lewis F.C.A. as non-executive Deputy Chairman
and James (Jim) McLaughlin as non-executive Finance Director.
Frank Lewis (age 60) is a businessman with over 25 years of experience in both
quoted and private companies. He has held a number of board positions as
Chairman and non-executive director both in the UK and aboard with rapidly
growing, mid-market companies. He is currently a non-executive director of
Teleset Networks Public Company Limited, a Cypriot holding company for a Russian
telecommunications group, and MTI Wireless Edge Ltd., a manufacturer of
sophisticated antennas and antenna systems, both of which are listed on AIM.
Frank is a fellow of the Institute of Chartered Accountants of England and Wales
and is also a member of the South African Institute of Chartered Accountants.
Frank Lewis was a director of The Industry Limited until December 2003, which
went into administrative receivership in December 2003. Mr Lewis was acting as
a nominee Director on behalf of a Private Equity investor.
Jim McLaughlin (aged 50) is a Chartered Accountant. He was finance director of
Badgerline Plc, the public transport operator, from 1988 until 1995, where he
was instrumental in the growth and flotation of that company, which in 1995
merged to form First Group plc. He joined Heritage Bathrooms in 1995 to lead
their flotation later that year, and remained on the board there until 1998,
when he joined Connaught Plc to perform a similar role on a part time basis. In
1999 he became the strategic development director, with particular
responsibility for acquisitions, mergers and corporate governance matters. He
left Connaught in 2002, and in 2003 joined the board of Dillistone Group Plc,
the AIM listed supplier of software to the executive recruitment industry, as
Executive Chairman and Finance Director. In addition, Jim has held a number of
non-executive appointments as a nominee of institutional investors.
Name Current directorships and Previous directorships and
partnerships
partnerships (in the last 5 years)
Frank Lewis Bio-Oz Ltd Articsoft Limited
Imagemetrics Ltd Concern Limited
MTI Wireless Edge Limited Exclusive Group plc
Teleset Networks Public Company Jetcam Limited
Limited
The Industry Limited
Yoomedia plc
Lloyds British Testing plc
Interactive Rights Management Limited
Jim McLaughlin Ministry of Cake Ltd (Appointed 16/ Ceuta Healthcare Limited (Appointed
09/
08/2005) 12/1996 Resigned 03/12/2001)
Gul International Limited (Appointed
18/11/2005)
J & SL McLaughlin Ltd Connaught plc
(Appointed 04/06/1998 Resigned
30/10/2002)
Dillistone Group Plc (Appointed 03/2003)
VLSI International Holdings Limited
(Appointed 29/09/2000 Resigned
30/03/2004)
The Bristol Society of Model and
Experimental Engineers
(Appointed 06/02/2002 Resigned
02/02/2005)
Connaught Incubations Limited
(Appointed 23/05/2000 Resigned
01/04/2005)
In accordance with paragraph (g) of Schedule Two of the AIM Rules, the Company
confirms that there are no further matters to be disclosed in respect of these
appointments.
Cassydora Limited
In September 2005 the Company purchased Cassydora Ltd from Mr E G Smyth to
provide consultancy services in new specialist areas. The acquisition has so
far proved successful in enabling the Company to achieve the sought after status
as a wholesaler for BT services and products. Other developments are taking
place arising from the consultancy which the Board hopes to report upon in the
near future.
Mr Smyth and the Company have agreed that he will be free to devote more time to
other opportunities which have become available to him. Accordingly, he has
agreed to vary the consideration received on the sale of Cassydora by gifting
back to the Company, in accordance with the provisions of section 143(3) of the
Companies Act 1985, a proportion of the shares received as consideration.
Following this transaction, Mr Smyth will have an interest in 67,000 Ordinary
Shares, representing approximately 1.3 per cent. of the issued share capital of
the Company following completion of the acquisition of Datatel, the Placing and
the conversion of the 10% Loan Notes and the 10% Preference Shares described
above.
Current Operations
2006 trading is broadly in line with market expectations and it is the Board's
intention to continue to pursue their strategy of combining organic growth with
selective earnings enhancing acquisitions.
The Board of Directors expects to be in a position to commence the payment of
dividends during the current financial year.
The Company is pleased to announce that it has recently entered into a two year
agreement with Listers Motor Group, one of the largest private motor dealerships
in the UK, to provide telephony services including maintenance, calls and line
management.
For further information, please contact:-
Jeff Williams, Managing Director, TMG 01527 881 800
Barrie Newton Managing Director, Rowan Dartington 0117 933 0011
This information is provided by RNS
The company news service from the London Stock Exchange
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