15th Nov 2006 14:37
Farley Group PLC15 November 2006 Farley Group plc Proposed Placing of 14,213,310 new Ordinary Shares at 80 pence per share to raise £11.4 million Farley Group plc ("Farley" or the "Company") today announces that it isproposing to raise £11.4 million (before commissions and other expenses) by wayof a placing of 14,213,310 new Ordinary Shares of 5p each at a price of 80 penceper new Ordinary Share. Max Ziff, Chief Executive Officer of Farley, commented: "I am delighted to announce this strategic fund raising, which has beensupported by key city institutions, which validates the significant developmentswhich have been taking place at the combined Farley and Humberts group. Following this placing the group will have over £15 million in cash to continueits strategy for growth. We have already identified and are in discussion witha number of further earnings enhancing acquisition targets which if successfullyconcluded will allow us to achieve our target of 70-100 offices by next summer.Our extensive rebranding and office refurbishment programme is now well underway which we expect to further enhance the profitability of the business goingforward." The Placing is conditional upon, inter alia, the passing of the Resolutions atan Extraordinary General Meeting of the Company will be convened for 10.00 am on11 December 2006 (the "EGM"). A Circular together with notice of EGM will bedespatched to Shareholders shortly. Subject to the passing of the Resolutions,Admission is expected to become effective and trading in the Placing Shares onAIM to commence on 12 December 2006. For further information please contact: Farley Group Plc Tel: +44 (0)20 7318 1273Max Ziff - Chief Executive OfficerNigel Cartwright - Chief Financial Officer Panmure Gordon Tel: +44 (0)20 7459 3600Mark LanderRakesh Sharma The Company and the directors of Farley Group plc accept responsibility for theinformation contained in this announcement and compliance with the AIM Rules. Tothe best of the knowledge and belief of the Directors, who have taken allreasonable care to ensure that such is the case, the information contained inthis announcement is in accordance with the facts and does not omit anythinglikely to affect the import of such information. Panmure Gordon (UK) Limited ("Panmure Gordon"), which is regulated by theFinancial Services Authority, is acting exclusively for Farley Group plc and noone else and will not be responsible to any other person for providingprotections afforded to customers of Panmure Gordon. A copy of the Circular to be despatched to Shareholders shortly will beavailable for collection, free of charge, from the offices of Panmure Gordon,Moorgate Hall, 155 Moorgate, London EC2M 6XB, during normal business hours onany week day (excluding Saturdays, Sundays and public holidays) from the date ofthe document for the period of one month from Admission. Proposed Placing of 14,213,310 new Ordinary Shares at 80 pence per share to raise £11.4 million INTRODUCTION The Company today announces that it is proposing to raise £11.4 million (beforecommissions and other expenses) by way of a placing of 14,213,310 new OrdinaryShares at 80 pence per new Ordinary Share. The Placing is conditional upon,inter alia, the passing of the Resolutions at an Extraordinary General Meetingof the Company will be convened for 10.00 am on 11 December 2006 at the officesof Stringer Saul LLP, First Floor, 17 Hanover Square, London, W1S 1HU. As previously announced on 25 September 2006, the Company intends to change itsname to Humberts Group plc, consistent with the ongoing development of theHumberts' brand as the main trading identity of the Group. The issue price of 80 pence per new Ordinary Share represents a 27.3 per cent.discount to the Closing Price of 110 pence per Ordinary Share on 14 November2006 (being the latest practicable date prior to this announcement). The Placing is being conducted by the Company on a non pre-emptive basis tocertain existing Shareholders and other institutional investors in order toavoid the relatively significant cost and delay to the Company which wouldarise, were the Company to make an open offer to all Shareholders to subscribefor new Ordinary Shares. The Placing is not underwritten. The Placing Shares will, when issued and fullypaid, rank pari passu in all respects with the Existing Ordinary Shares,including the right to receive all dividends and other distributions thereafterdeclared, made or paid on the Ordinary Shares. The Placing is conditional on, inter alia: • the passing of the Resolutions; and • Admission becoming effective. BACKGROUND Farley is an acquisitive, independent national firm of land and estate agents,mainly based in the south of England. It is a multi-disciplined practise,specialising in the residential, rural, commercial and professional servicessectors. The Directors consider that there is an opportunity to consolidatewithin the market in which the Group operates through the acquisition of landestate agents and other companies offering related services. As part of the roll-out of Farley Group's stated growth strategy, in the last 12months, the Company has carried out a number of acquisitions which havesubstantially grown the number of offices operated by the Group, as follows: • November 2005 the Humberts partnership trading out of 39 offices of which 17 were owned and 22 were franchised; • December 2005 the lettings business of London and Overseas Properties which operated in the Royal Borough of Kensington & Chelsea; • April 2006 the business of Burrough & Co with two offices in Hungerford and Newbury. • June 2006 Iwood Management Limited and Westchurch Lettings Limited, all of which traded as C.J.Hole Country out of 12 estate agent branches in north Somerset; • August 2006 the Humberts franchise in Petersfield; • September 2006 Wright Todd Property Services Limited, which was previously a Humberts franchise in Wadhurst and Tenterden; • September 2006 the business and certain assets of Geoffrey Fitch and Co an independent land and estate agent based in Cirencester; • October 2006 Blenheim Bishop Limited in Mayfair, a London residential and land and new home development business; • October 2006 BTF Lister, a Kent based rural and commercial practise with a residential lettings business in Canterbury and Benenden; • October 2006 the Humberts franchise in Worcester and Malvern; • October 2006 Calcutt Maclean Standen West Kent, a residential estate agency business operating in Cranbrook and Rye; • November 2006 Calcutt Maclean Standen East Kent, a residential estate agency business operating in Canterbury and Wye; • November 2006 Calcutt Maclean Standen Fine Art Ltd, a Fine Art auction house operating in Kent and the surrounding areas; and CURRENT TRADING The Company published interim results for the six months ended 31 March 2006 on12 June 2006. During this period, the Group generated profit after tax of £0.33million on turnover of £5.13 million, representing a significant improvement onthe same period in the previous year. These results benefited from a five monthcontribution from the Humberts business acquired in November 2005. On 25 September 2006, the Company announced that trading in the second half ofits financial year to 30 September 2006 was expected to exceed Directors'expectations and that in terms of turnover, normalised profit and earnings pershare, the outcome for the year to 30 September 2006 would exceed current marketexpectations. Trading in the current financial year for the month of October 2006 is in linewith internal forecasts. REASONS FOR THE PLACING AND USE OF PROCEEDS The Group has already become one of the fastest growing consolidators of landand estate agents in the United Kingdom and the Board and has identified anumber of additional potential acquisitions which will allow the Group tocapitalise on further opportunities that are taking place in the market. Theproposed Placing will allow the Group to strengthen its market position,complete the acquisitions it has identified and allow it to move quickly as andwhen further appropriate acquisition opportunities arise. The Directors are currently in discussions that may or may not lead to theacquisition of a number of Humberts franchised offices and other businessesthroughout the UK which, if successful, would result in the Company achievingits target of operating between 70 and 100 offices by mid 2007. Theseacquisitions would utilise a significant proportion of the net funds raisedpursuant to the Placing. DETAILS OF THE PLACING The Company is proposing to raise £11.4 million, before expenses, through aplacing arranged by Panmure Gordon of 14,213,310 new Ordinary Shares at 80 penceper Ordinary Share. Panmure Gordon has agreed, as agent for the Company, to useits best endeavours to procure subscribers for the Placing Shares. The Placing Shares will represent approximately 25.3 per cent. of the enlargedshare capital at Admission. On Admission the Company will have a marketcapitalisation of approximately £62 million at the Closing Price on 14 November2006. The Placing Shares will be issued credited as fully paid and will rank paripassu in all respects with the Existing Ordinary Shares in issue, including theright to receive and retain all dividends and distributions declared, made orpaid on such shares. Certain of the Directors, namely, Timothy James (Executive Chairman), Max Ziff(Chief Executive Officer), Nigel Cartwright (Chief Financial Officer), and SimonWharmby (Non-executive Director) have agreed in aggregate to subscribe for125,000 new Ordinary Shares in the Placing. Further details are set-out in theCircular which will be despatched to Shareholders shortly. GRANT OF OPTIONS The Company wishes to continue to incentivise its executive directors and,accordingly, the Company intends to grant options under the Company's EMI shareoption scheme shortly after the announcement of the Placing. The options (whichare expected to be granted on Tuesday 21 November, based on the average of themiddle-market closing price of the Existing Ordinary Shares on 16 November 2006,17 November 2006, and 20 November 2006) are to be granted to Max Ziff, NigelCartwright, and Patricia Farley (Managing Director). Max Ziff will be granted options over 300,000 Ordinary Shares, Nigel Cartwrightwill be granted options over 250,000 Ordinary Shares, and Patricia Farley willbe granted options over 100,000 Ordinary Shares. In each case 50 per cent of theoptions will be exercisable at any time between the second and tenthanniversaries of the date of grant, and the remaining 50 per cent of the optionswill be exercisable at any time between the second and tenth anniversaries ofthe date of grant provided that the middle-market closing price is, at the dateof exercise, in excess of 125 per cent of the exercise price. EGM A notice convening an extraordinary general meeting of the Company to be held at10.00 am on 11 December 2006 at the offices of Stringer Saul LLP, First Floor,17 Hanover Square, London W1S 1HU will be despatched shortly. The Directors consider that the Placing and the Resolutions are in the bestinterests of the Company and its Shareholders as a whole and, accordingly, theyintend to vote in favour of the Resolutions, in respect of the Shareholdingsregistered in their own names which amount, in aggregate to 7,668,940 OrdinaryShares, representing approximately 18.26 per cent. of the Existing OrdinaryShares. EXPECTED TIMETABLE OF PRINCIPAL EVENTS Latest time and date for receipt of forms of proxy in respect of 10.00 am on 9the Extraordinary General Meeting December 2006 Extraordinary General Meeting 10.00 am on 11 December 2006 Placing Shares admitted to trading on AIM 8.00 am on 12 December 2006 CREST accounts to be credited for the Placing Shares in 8.00 am on 12uncertificated form December 2006 Date of despatch of definitive share certificates for the Placing By 19 DecemberShares in certificated form 2006 DEFINITIONS "Act" the Companies Act 1985, as amended by the Companies Act 1989"Admission" admission of the Placing Shares to trading on AIM and such admission becoming effective"AIM" the London Stock Exchange's market for smaller growing companies"AIM Rules" the AIM Rules for companies as published from time to time by the London Stock Exchange"Circular" the document to be dated 16 November 2006, addressed to the Shareholders"Closing the closing middle quotation of an Existing Ordinary Share asPrice" published in the Daily Official List"Directors" or the directors of the Company"Board""EGM" the extraordinary general meeting of the Company, convened for 10.00 a.m. on 11 December 2006, notice of which is set out at the end of the Circular, or any adjournment thereof"Existing the 42,007,325 Ordinary Shares in issue on the date of theOrdinary CircularShares""Farley" or Farley Group plc"the Company"Group" the Company and its subsidiaries"London Stock London Stock Exchange plcExchange""Ordinary the ordinary shares of 5p each in the capital of the CompanyShares""Panmure Panmure Gordon (UK) Limited, nominated adviser and broker to theGordon" Company"Placing" the conditional placing of the Placing Shares at the Placing Price"Placing 80 pence per new Ordinary SharePrice""Placing the 14,213,310 new Ordinary Shares to be issued pursuant to theShares" Placing"Resolutions" the resolutions to be proposed at the EGM"Shareholders" holders of Ordinary Shares This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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