Acquisition
Released: 05/09/2006
Glen Group PLC
05 September 2006
Glen Group plc ('Glen' or 'the Company')
Acquisition of Explore IT Limited ('Explore')
The Board of Glen is pleased to announce that, through its subsidiary Glen
Communications Limited ('Glen Communications'), it has acquired the entire
issued share capital of Explore for a cash consideration of £115,000, funded
from internal sources and existing bank facilities.
Explore is a small IT services business based in Edinburgh providing IT support
services, equipment supply and consultancy to SMEs. The business has recently
been refocused wholly on the SME market following the completion of a number of
corporate and healthcare projects and as a result, has downscaled its operations
substantially since its last published set of financial statements for the year
ended 31st December 2005.
Glen Communications intends to develop Explore as its SME focused IT services
arm and will transfer its existing IT services business and support contracts
into Explore. This will allow Glen Communications to achieve greater service
delivery focus in this area as it expands its operations.
At completion of the acquisition, the directors of Explore have, by mutual
consent, resigned, eliminating the business development costs shown in the
financial information below, as well as a corporate focused consultant. This
leaves Explore with five continuing employees.
Below are the results of Explore for the year ended 31st December 2005 taken
from the unaudited filed accounts for that year expanded to include a breakdown
of the turnover and gross profit into its various business sectors. The
unaudited figures for the half-year to 30th June 2006 taken from the internal
management accounts are also included.
6 Months ended Year ended
30th June 2006 31st December 2005
£ £
Turnover:
Corporate consultancy 26,507 165,375
Healthcare consultancy 116,016 182,770
IT Support services 132,855 269,472
Total Turnover 275,378 617,617
Cost of sales 243,607 541,730
Gross profit/(loss):
Corporate consultancy (14,329) 1,711
Healthcare consultancy 60,826 78,501
IT Support services 34,756 48,625
Business development (49,482) (52,950)
Total Gross Profit 31,771 75,887
Overhead 25,395 66,647
Profit before interest and taxation 6,376 9,240
Interest (net) 193 876
Profit before taxation 6,569 10,116
Taxation 0 0
Profit retained 6,569 10,116
Glen Communications intends to complete the integration of the Explore business
by the end of September. Only the IT support services business will be continued
by Glen Communications and much of the overhead shown above is expected to be
eliminated before the end of October 2006. Eclectic Group Limited, Glen's
corporate focused subsidiary, will benefit from the transfer of the residual
healthcare practice, including the transfer of the senior consultant.
The balance sheets of Explore, taken from the unaudited filed accounts at 31st
December 2005 and the unaudited management accounts as at 30th June 2006, is
summarised as follows:
30th June 2006 31st December 2005
£ £
Fixed Assets 5,554 6,134
Current Assets
Stock 0 13,012
Debtors and prepayments 57,351 83,403
Bank and cash 29,474 21,927
Total Current Assets 86,825 118,342
Current Liabilities
Creditors and accruals 19,959 44,876
Taxation 0 1,786
Value added tax 24,326 21,289
Directors' loans 0 15,000
Total Current Liabilities 44,285 82,951
Net Current Assets 42,540 35,391
NET ASSETS 48,094 41,525
Represented by:
Share capital 233 233
Reserves 47,861 41,292
SHAREHOLDERS' EQUITY 48,094 41,525
Since 30th June Explore has been trading at a loss as a direct result of
carrying the salary costs of the corporate consulting business and the business
development arm.
Commenting today, Graham J Duncan, Chief Executive of Glen Group plc, said:
'Explore is a great little business which fits neatly into the Group and from
which we can see immediate value being added. This acquisition is very much in
keeping with our strategy to build up Glen through bolt on opportunities which
allow us to enhance our services to SMEs as well as continuing to grow
organically'
5th September 2006
Enquiries:
Glen Group plc
Graham J Duncan, Chief Executive Tel: 0845 119 2100
College Hill Associates
Alex Walters Tel: 020 7457 2020
This information is provided by RNS
The company news service from the London Stock Exchange