Feedback looks interesting - could easily be a ten bagger over next year

Yes ... they seem to have done the right thing


CAS Feedback : Sells Teknical unit for #350k
02-Jan-2004 11:31

Feedback PLC today said that following
a significant deterioration in the
current trading, and in the opinion of
the Board the future prospects, of
Teknical Limited, the company's
e-learning subsidiary, the Board has
today entered into an agreement whereby
Serco Learning, a division of Serco
plc, will acquire the assets,
intellectual property and business of
Teknical Limited for a consideration of
#350,000 payable in cash on completion.
All employees of Teknical will
transfer to Serco who will also take a
full assignment of the leasehold
premises occupied by Teknical at Hessle
in Humberside.
The reasons for this year's
disappointing performance at Teknical
are primarily due to sales to the
further education market falling
considerably below expectations. In
addition, the unsuccessful tender for
the South Yorkshire e-learning project
led to an increase in overhead costs.
For the year ended Mar. 31, 2003,
Teknical contributed profit before tax
of approximately #151,000 on turnover
of #1.37m, with gross assets of
approximately #509,000.
In the current year for the 8 months
ended Nov. 30, 2003, based on
management accounts, Teknical made
losses of #382,000 on turnover of
#545,000, with gross assets of
#197,000.
The Board took the view that losses of
this magnitude could not be allowed to
continue, particularly given the
consequential impact on the Group as a
whole, and sought to identify potential
acquirers of Teknical or its assets,
leading to the Agreement. The net
proceeds of the disposal of Teknical
will be used to enhance the Group's
working capital position and to further
develop the remaining businesses.
The Board recognises that whilst
shareholders will be disappointed with
the outcome for Teknical it should be
acknowledged that the business has in
general failed to meet expectations.
It is the Board's intention to develop
the remaining Group businesses and
focus on the core competencies of the
Group.

ICV Edited News from Dow Jones
1131 GMT Jan 02 2004