28th Dec 2007 11:38
Swallowfield PLC28 December 2007 Swallowfield plc Creating and Delivering Solutions for our Customers' Success Sale and Leaseback of Warehouse facility and Trading Update Swallowfield plc is pleased to announce that it has unconditionally completedthe sale and leaseback of its Lowmoor warehouse facility. This will support theCompany's expansion programme both in the UK and overseas. The main terms of the transaction are as follows: • Sale Price (net of fees) £2.10m• Terms of lease 20 year full repairing and insuring lease• Extension details 20,000,sq ft extension by 30 September 2008 The net book value of the building is £0.85m and Swallowfield expects to make apre-tax profit on this transaction of £1.25m, which will be disclosed in theinterim accounts for the 28 weeks to 12 January 2008. The Directors are advisedthat there will be no tax to pay on this transaction. The cash received will beused to reduce net debt and support the Company's ongoing growth programme. Trading update In addition to the profit on the sale and leaseback transaction noted above, theCompany is pleased to report that pre-tax profits in the first half of the yearwill be better than current market expectations. The overall net margin mix isbetter than expected, operational efficiencies remain high and we continue tomanage costs and assets tightly. We continue to believe that, with the exception of the profit on the sale andleaseback, market expectations for the year to 30 June 2008 as a whole remainappropriate. Ian Mackinnon, Chief Executive Officer, commented: "This transaction will significantly strengthen the Group's balance sheet,further building on the debt reductions made over the last 18 months and put usin a much stronger position to fund our future growth plans. In addition, aspart of the deal, the purchaser will extend the warehouse and this will enableus to improve further the Group's inventory management and general operations,as well as rationalise other property holdings. Completing this sale and leaseback at a time of considerable uncertainty in thecommercial property sector reinforces the strong progress that the Company hasmade over the last two years." Enquiries: Swallowfield plc.Ian Mackinnon, Chief Executive Officer 01823 662 241Peter Houston, Group Finance Director 01823 662 241 Mike Coe, Blue Oar Securities Plc 0117 933 0020Alan Bulmer, Performance Communications 0117 907 6514Chris Lawrance, Performance Communications 0117 907 3414 Creating and Delivering Solutions for our Customers' Success Swallowfield plc is a full service provider for UK high street and global brandsoperating in the cosmetic, personal care and household goods marketplace. TheCompany's services cover market analysis; design, formulation manufacturing andtesting of products; packaging design and sourcing; and distribution and stockmanagement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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