SRG Security Res.

 
TIDMSRG 
 
26 November 2014 
 
                          Security Research Group PLC 
 
                    Proposed Cancellation of trading on AIM 
 
 
 
Security Research Group PLC ("SRG" or the "Company") announces that it will, 
today, be sending a circular to Shareholders together with a notice convening a 
General Meeting of the Company ("General Meeting") to seek Shareholders' 
approval to cancel the admission of the Company's ordinary shares of 20p each 
("Shares") to trading on AIM ("Cancellation" or "Delisting"). 
 
Introduction 
 
The Directors have recently undertaken a review of the benefit of the Shares 
continuing to be traded on AIM. Having completed this review, which included 
consultation with the Company's advisers and Shareholders holding approximately 
69.07 per cent. of the Company's issued share capital, your Directors have 
concluded that it is in the best interests of the Company and its Shareholders 
as a whole for admission of the Shares to trading on AIM to be cancelled. 
 
The AIM Rules provide that Cancellation be conditional upon the approval of the 
special resolution regarding Delisting ("Resolution") by not less than 75 per 
cent of the votes cast, whether in person or by proxy, by Shareholders in a 
general meeting. The Company has received irrevocable undertakings to vote in 
favour of the Resolution in respect of 69.07 per cent. of the Company's issued 
share capital. On the basis that the Resolution is approved, the Directors have 
notified the London Stock Exchange, pursuant to Rule 41 of the AIM Rules, that 
30 December 2014 is the preferred date of Cancellation. 
 
The purpose of this announcement is to explain why the Directors consider the 
proposal to be in the best interests of the Company and its Shareholders as a 
whole and to recommend that you vote in favour of the Resolution required to 
implement the proposal at the General Meeting scheduled to take place at 9.30 
a.m. on 18 December 2014, notice of which is included at the end of this 
announcement. 
 
Timetable 
 
Despatch of the Delisting circular                             26 November 2014 
 
Latest time for receipt of Form of Proxy             9 a.m. on 16 December 2014 
for the General Meeting 
 
General Meeting to be held                        9.30 a.m. on 18 December 2014 
 
Last day of dealings of Shares on AIM                          29 December 2014 
 
Expected cancellation of trading of Shares           7 a.m. on 30 December 2014 
on AIM 
 
Each of the times and dates above is subject to change. Any such change will be 
notified by an announcement on a Regulatory Information Service. 
 
Background to and reasons for the proposed Cancellation 
 
Since November 2005, when Jonathan Mervis was appointed Executive Chairman, the 
Company's strategy has been to rationalise and improve the performance of its 
constituent businesses, PSG Franchising Limited ("PSG"), Audiotel International 
Limted ("Audiotel") and Moore & Buckle (Flexible Packaging) Limited (Moore & 
Buckle"). 
 
Following a review of these businesses, the Board has determined that the best 
available route for Shareholders is for the Company to pursue a strategy of 
disposing of each of these businesses, with the intention of distributing or 
returning to Shareholders surplus cash over the next three years. The Company 
is not looking to make further acquisitions, hence it has no need to raise 
further capital or to issue further Shares. Therefore the Company's main 
purpose for being admitted to trading on AIM has fallen away and, as a result, 
the Directors feel it is no longer beneficial for SRG or its Shareholders for 
the Company to continue to incur the direct and indirect costs of its Shares 
being admitted to trading on AIM. 
 
Following Cancellation, head office costs will be substantially reduced 
benefitting Group profitability and ensuring a maximum return of cash to 
Shareholders. It is the intention of the Directors to make a payment to 
shareholders of 15p per share in April 2015. 
 
Following the appointment of Jonathan Mervis, 8,000,000 Shares were issued on 
15 February 2006 at a price of 50p per share, immediately following which the 
Company's market capitalisation was approximately GBP15 million. Since then the 
Company has returned approximately GBP18 million to Shareholders by way of three 
tender offers without raising any additional equity capital. This represents a 
return on capital of approximately 120 per cent to date. 
 
Shareholders who subscribed for the share issue at 50p per share in February 
2006 will have already received a return in capital of 131 per cent. Following 
these capital repayments such Shareholders, who have not sold any shares in the 
meantime, retain a balance of 70 per cent of their initial holding. 
 
Current trading 
 
The Company is continuing to trade profitably. 
 
PSG continues to benefit from an expanding marketplace and has grown both in 
terms of increased profits and revenues when compared to the same period last 
year. 
 
Audiotel continues to focus on the improvement of its existing product range 
along with the development of new innovative products in order to generate new 
revenues in a difficult marketplace. 
 
Moore & Buckle continues to trade broadly in line with its performance in 
recent years. 
 
Effect of Cancellation 
 
The principal effect of the Cancellation is that there will no longer be a 
formal market mechanism enabling Shareholders to trade their Shares on AIM or 
any other recognised market or trading exchange. It should be noted that the 
trading volume in the Shares on AIM has remained low at an average of 201,055 
Shares per month over the last 12 months, representing approximately 1.04 per 
cent. of the Company's issued share capital. The underlying liquidity in the 
Shares is low and, in the opinion of the Directors, is likely to remain that 
way for the foreseeable future. 
 
Shareholders should be aware that following the Cancellation the Company will 
no longer be bound by the AIM Rules and that, in consequence, certain 
previously prescribed corporate governance procedures may not be adhered to in 
the future and the Company will no longer be required to announce material 
events or transactions. However, following Cancellation, the Directors: 
 
 1. will hold an annual general meeting and, when required, other general 
    meetings, in accordance with the applicable statutory requirements and the 
    Articles of Association of the Company; and 
 
 2. will make available to all Shareholders an annual financial statement. 
 
The Company intends to make available a new matched bargain trading facility 
for at least one year. Under this facility, Shareholders or persons wishing to 
trade Shares will be able to leave an indication with the Company of their 
willingness to buy or sell at an agreed price. In the event that the order can 
be matched with an opposite sell or buy instruction, both parties will be 
contacted and informed of the relevant details. 
 
Shareholders who hold Shares in CREST will have to transfer their Shares into 
certificated form before they will be able to trade Shares. 
 
City Code 
 
Notwithstanding the Delisting, the Company will continue to be subject to the 
City Code while it remains an unlisted public company. 
 
Under Rule 9 of the City Code, when any person or group of persons acting in 
concert, individually or collectively, is interested in shares which in 
aggregate carry not less than 30 per cent. of the voting rights of a company 
but do not hold shares carrying more than 50 per cent. of the voting rights of 
a company and such person or any person acting in concert with him acquires an 
interest in any other shares, which increases the percentage of the shares 
carrying voting rights in which he is interested, then that person or group of 
persons is normally required by the Panel to make a general offer in cash to 
all shareholders of that company at the highest price paid by them for any 
interest in shares in that company during the previous 12 months. Rule 9 of the 
City Code further provides that where any person, together with persons acting 
in concert with him, holds over 50 per cent. of the voting rights of a company 
to which the City Code applies and acquires additional shares which carry 
voting rights, then that person will not generally be required to make a 
general offer to the other shareholders to acquire the balance of the shares 
not held by that person or his concert parties. 
 
Trading in the Shares after Cancellation 
 
Following Cancellation, transfers of Shares may only be effected in accordance 
with those provisions of the Company's articles of association concerning 
off-market transfers of Shares in certificated form. To effect a transfer of 
Shares following Cancellation, and once a proposed transferee has been found, a 
duly executed and stamped stock transfer form must be submitted (together with 
the relevant share certificate(s)) to the Company's secretary at the Company's 
registered office for registration. 
 
Resolution to be proposed at the General Meeting 
 
The Cancellation is subject to Shareholders passing the following resolution: 
"That the admission of the ordinary shares of 20p each in the capital of the 
Company to trading on AIM, a market operated by London Stock Exchange plc, be 
cancelled and that the directors of the Company be authorised to take all steps 
which they consider to be necessary or desirable in order to effect such 
cancellation". The resolution is proposed as a special resolution of the 
Company requiring approval of not less than 75 per cent. of the votes cast by 
Shareholders at the General Meeting. 
 
The Cancellation will occur no earlier than five clear business days after the 
General Meeting and it is expected that trading in the Shares on AIM will cease 
at the close of business on 29 December 2014, with Cancellation being effective 
at 7 a.m. on 30 December 2014. 
 
Irrevocable undertakings 
 
Irrevocable undertakings to vote in favour of the Resolution at the General 
Meeting have been received from Shareholders in respect of their respective 
beneficial holdings of, in aggregate 13,350,596 Shares, representing 
approximately 69.07 per cent. of the total issued share capital of the Company. 
 
Action to be taken 
 
A Form of Proxy for use in connection with the General Meeting is enclosed with 
the Delisting circular. Whether or not you intend to be present at the General 
Meeting in person, it is important that you duly complete, execute and return 
the Form of Proxy, by hand or by post, to the Company's agent, Capita Asset 
Services, PXS 1, 34 Beckenham Road, Beckenham, Kent BR3 4ZF in accordance with 
the instructions printed thereon. 
 
To be valid, a completed Form of Proxy must be executed in accordance with the 
instructions printed thereon and returned as soon as possible and, in any 
event, so as to be received by the Company's agent not later than 9 a.m. on 16 
December 2014. Completion and return of a Form of Proxy will not prevent you 
from attending and voting at the General Meeting in person should you wish to 
do so. 
 
Recommendation 
 
The Directors consider the Resolution to be in the best interests of the 
Company and the Shareholders as a whole. Accordingly, the Directors recommend 
that Shareholders vote in favour of the resolution to be proposed at the 
General Meeting. 
 
General Meeting and Cancellation from Trading on AIM 
 
A notice of General Meeting will be sent to shareholders today convening a 
meeting at 9.30 a.m. on 18 December 2014 at 133 Ebury Street, London, SW1W 9QU. 
Subject to the passing of the Resolution, the delisting of the Shares from 
trading on AIM will take effect from 30 December 2014 and the final day upon 
which they will be able to be traded on AIM will be 29 December 2014. 
 
 
 
A copy of the GM notice will be made available on the Company's website at 
www.srgroupplc.com. 
 
Contacts 
 
Security Research Group plc 
Jonathan Mervis, Chairman                               0207 881 0800 
John Warwick, Finance Director 
 
WH Ireland Limited 
Chris Fielding, Head of Corporate Finance               0207 220 1666 
James Bavister, Corporate Finance Manager 
 
 
 
 
 
 
 
END 
 

Security Res. (LSE:SRG)
Historical Stock Chart
From Apr 2024 to May 2024

Security Res. (LSE:SRG)
Historical Stock Chart
From May 2023 to May 2024