23rd Aug 2019 08:37
(Alliance News) - Stilo International PLC on Friday proposed cancellation of its admission on AIM, subject to shareholder approval, following a swing to loss in the first half of 2019.
The stock dropped 31% in morning trade in London to 1.00 pence a share, giving it a market capitalisation of GBP1.1 million.
Stilo develops tools to help organizations automate the conversion of content to XML.
The company said it intends to cancel trading on AIM market in London and its decision was supported by its majority shareholders Brewin Nominees, BDS Nominees and Giltspur Nominees, who hold an aggregate 13.4% stake. Under the Brewin Nominees purchase contracts, Stilo said it has conditionally agreed to purchase the Brewin Nominees 15.3 million shares at 1p each.
Under the AIM rules, it is a requirement that the de-listing is approved by the requisite majority of shareholder voting, being not less than 75% of the votes cast. Subject to the resolutions approving the de-listing being passed, it is anticipated to become effective on October 8.
Stilo noted that it recognises that not all shareholders of the company will be able or willing to continue to own shares following the de-listing. Subject to the tender conditions being satisfied, shareholders will, therefore, have the opportunity to tender all or some of their shares, the company noted.
Under the tender offer, Stilo said it will purchase up to 14.7 million shares, representing 15% of the shares in issue, at a price of 1p per share. The repurchase price represents a discount of 31% over the closing mid-market price on Thursday.
Turning to results, Stilo said it swung to pretax loss of GBP29,000 in the six months to the end of June compared to GBP42,000 profit reported a year earlier, as revenue slipped to GBP638,000 from GBP707,000.
Looking ahead, the company said it is currently expecting trading to continue slowly for the remainder of 2019 and need to take measures to reduce our operating costs wherever possible.
Stilo said de-listing from AIM is expected to generate potential annualised cost savings of over GBP120,000. Additional cost-reduction activities include organisational and management changes that are currently underway.
"The company continues to develop high-quality software tools used by leading organisations around the world. With a reduced cost base and increased sales to be driven by the recruitment to the newly created role of vice president of Sales & Marketing, it is our intention to generate steady ongoing profits and resume the payment of dividends to shareholders as soon as possible," said Chief Executive Les Burnham.