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Trading Update, Acquisition and Issue of Equity

Date : 02/13/2012 @ 2:00AM
Source : UK Regulatory (RNS & others)
Stock : Mercer Resources (MCR)
Quote : 0.7  -0.025 (-3.45%) @ 4:32AM
Mercer Resources share price Chart

Trading Update, Acquisition and Issue of Equity

TIDMADS

RNS Number : 2633X

Alexander David Securities Grp PLC

13 February 2012

ALEXANDER DAVID SECURITIES GROUP PLC

("Alexander David" or the "Company")

POST CLOSE TRADING UPDATE,

ACQUISITION OF THE BUSINESS OF BRIDGE HALL STOCKBROKERS LIMITED

AND ISSUE OF EQUITY

Trading Update

Alexander David today issues a trading update ahead of announcing its final results for the year to 31 December 2011 ("Full Year Report") on 23 April 2012.

In July, the Directors announced that Alexander David Securities Group had, for the seven months to 31 July 2011, been trading profitably, despite the slowdown in its markets disclosed in that announcement. The Directors believe that in the final five months of the year the slowdown became more severe for all operators in the UK financial markets, particularly in the markets in which the Company operates and as a result Alexander David Securities now expects to show a loss for the full year to 31 December 2011.

Accordingly the Directors anticipate that they will report a modest loss for the year, significantly below the loss for the year to 31 December 2010. This loss is due to a number of factors but the main reasons include reduced trading volumes and a smaller number of corporate transactions in the last five months of the year. Market conditions have also led to delays in completing corporate transactions.

In a contrast to the end of the year, the first weeks of 2012 have shown some initial promise and we have a number of transactions which are proceeding well, despite taking longer to complete than anticipated. Looking forward, the Directors believe that the Company should continue to benefit from its client base in the equity markets and from its good pipeline of corporate transactions. However, in the short term, the Directors believe it to be vital to ensure that the Company remains well capitalised and it has therefore raised a total of GBP350,000 by way of a placing of Preference Shares and warrants to subscribe for new ordinary shares, as further described below.

Acquisition of the business of Bridge Hall Stockbrokers Limited

On 9 February 2012 Alexander David Securities agreed to acquire the business of Bridge Hall Stockbrokers Limited ("BHSL") for a total consideration of GBP30,000, which currently comprises 939 private clients and approximately GBP6m of client funds. BHSL is now in liquidation and is no longer trading, and is no longer authorised to offer clients any service.

This transaction will significantly increase the number of clients available to Alexander David and its funds under advisory management. For the sake of clarity, the Company has not taken on any other liabilities or obligations from BHSL.

Placing

The Company has today placed, conditional upon shareholder approval, GBP350,000 of Preference Shares, which qualify for FSA tier one capital. The new Preference Shares will, when issued, rank pari passu with the existing Preference Shares. The Preference Shares will not be admitted to trading on any market.

In addition, the Company will issue to the same subscribers, in proportion to their subscriptions, warrants to subscribe for GBP350,000 of shares in the Company at an exercise price of 0.16p per share. The subscribers are entitled to receive a fee of 1% per calendar month to the value of the warrant at the exercise price. The fee is payable so long as the warrants are not exercised, for a period of 10 years from the date of issue. The warrants are over 218,750,000 new ordinary 0.1p shares in the Company.

The placing proceeds will provide additional working capital to the Company to enable it to remain well capitalised. Certain of the Directors, detailed below, participated in the Placing, which is deemed to be a Related Party Transaction pursuant to AIM Rule 13. The Directors who are independent of this transaction, being Michael Hicks, Andrew Grant, Angus Rose and Alon Bull, consider, having consulted with the Company's Nomad, Cairn Financial Advisers LLP, that the terms of the placing are fair and reasonable insofar as the Company's shareholders are concerned. Further details relating to this are set out below.

The Warrants will, when exercised, rank pari passu with the existing Ordinary Shares.

The Placing is subject to shareholder approval as it will require a circular increasing the authorised number of Preference Shares in issue. Such a circular will be sent to shareholders shortly and a further announcement will be made when the circular is posted.

Directors' Shareholdings

The following Directors of the Company have, as part of the Placing, subscribed for Preference Shares of GBP1 each as set out below. Their holdings before and after the Placing are also set out below:

 
 Director        Current       Current       Preference    Warrants     Holding      Holding 
                  Preference    Preference    Shares        to be        following    following 
                  Share         Share         subscribed    issued       placing      placing 
                  holding       holding       for                        (no)         (%) 
                  (no)          (%) 
 David 
  Scott          212,689       12.9          nil           nil          212,689      10.3 
                ------------  ------------  ------------  -----------  -----------  ----------- 
 Sandra 
  Scott*         nil           nil           105,000       65,625,000   105,000      5.1 
                ------------  ------------  ------------  -----------  -----------  ----------- 
 Trevor 
  Coote          125,975       7.6           150,000       93,750,000   275,975      13.3 
                ------------  ------------  ------------  -----------  -----------  ----------- 
 Tony Cowling    143,405       8.7           20,000        12,500,000   163,405      7.9 
                ------------  ------------  ------------  -----------  -----------  ----------- 
 

*Spouse of David Scott CEO

In addition, Trevor Coote has sold 31,250,000 ordinary shares to Angus Rose at a price of 0.16p each. Following the sale, the holdings of ordinary shares by Trevor Coote and Angus Rose is as set out below:

 
 Director        Current       Current    Ordinary                 Holding        Holding 
                  holding       holding    share (sale)/purchase    following      following 
                  (no)          (%)                                 transaction    transaction 
                                                                    (no)           (%) 
 Trevor Coote    101,399,650   13.7       (31,250,000)             71,149,650     9.6 
                ------------  ---------  -----------------------  -------------  ------------- 
 Angus Rose      42,500,000    5.7        31,250,000               73,750,000     9.9 
                ------------  ---------  -----------------------  -------------  ------------- 
 

Enquiries:

   Alexander David Securities Group plc                               Tel: +44 (0) 207 448 9800 

Michael Hicks, Chairman

David Scott, Chief Executive

Nominated Adviser Tel: +44 (0) 207 148 7900

Cairn Financial Advisers LLP

James Caithie

This information is provided by RNS

The company news service from the London Stock Exchange

END

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