19th Sep 2006 14:55
Mercury Group PLC19 September 2006 MERCURY GROUP PLC DISPOSAL OF NAVITAS HEMWAY LIMITED 19 September 2006 Further to the trading update announced on 4th September 2006, The Board ofMercury Group plc ("the Company") is pleased to announce today a further step inthe planned turnaround of the Company with the disposal of its facilitiesmanagement subsidiary Navitas Hemway Limited ("Navitas"), to Cornshell Limited,the buy-out vehicle wholly owned by the managing director of Navitas, Mr DavidDawson. Following the disposal of Navitas, the Company will focus on growing anddeveloping SMPA, its core commercial property agency, based in London. Inaddition, steps have been taken to continue the reduction of the Group'soverheads. The consideration for the disposal is £150,000 in cash, of which £100,000 ispayable on completion and a further £50,000 of deferred consideration is payablein instalments within one year following completion. In addition, intra-groupdebt of approximately £20,000 will be repaid to the Company. The disposalproceeds will be applied in improving working capital. The resulting loss ondisposal of approximately £2.4 million represents substantially the goodwillarising on the acquisition of Navitas in 2004. Navitas reported sales in the year ended 30 September 2005 of £2.4 million and aprofit before tax of £306,000. Since that date however, the trading performanceof Navitas has been well below management's expectations and it has continued toabsorb cash due to trading losses compounded by difficulties in collectingsubstantial debtors. Navitas had net assets of £215,000 at 31 March 2006. Under the AIM rules, the disposal of Navitas represents a transaction with arelated party, by virtue of the interest of David Dawson as the managingdirector of Navitas. In compliance with this requirement, the directors of theCompany consider, having consulted with its nominated adviser KBC Peel Hunt,that the terms of the transaction are fair and reasonable insofar asshareholders are concerned. The Board continues to explore the raising of additional capital by way of ashare placing with its principal shareholders and a further announcement on thiswill be made in due course. Contact: James Lugg 0207 393 4020 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MGP.L