5th Nov 2007 07:01
Servocell Group PLC05 November 2007 SERV.L 5 November 2007 SERVOCELL GROUP PLC ("SERVOCELL" OR THE "COMPANY") Since the interim results statement released on 28 September 2007, the Board hascontinued to monitor revenue projections and cash flow forecasts for the Group. The Company has successfully completed further development and testing on itsActive Latch component, the AL2 module and the move into volume production hascommenced. The AL2 is a critical component of the Company's first "Ready to Go"product, the CL2, production of which should commence when the AL2 componentsbecome available, enabling the delivery of initial CL2 orders. The Board arepleased to announce that market reaction to the CL2 product has beenencouraging. The Directors anticipate that, following delivery of initial ordersto the Company's distributors, combined with marketing activities to achieve"pull through", there will be a growing level of sales. The Board is now focussed on securing additional financing to provide sufficientworking capital to allow the Company to continue to trade. The Directors haveprepared revenue and working capital projections which predict a peak cashrequirement in the order of £4.0 million over the next 30 months, by which timethe Directors expect the Company to be cash-flow positive on a monthly basis.The Board has worked with a number of parties to explore the funding optionsavailable to the Company and continues so to do. However, if additional fundingis not secured or shareholder value is otherwise realised before the end of2007, the Board expects that the Group would be required to cease trading. The Board's current assessment is that the most likely avenue for securingadditional funding is a placing of new ordinary shares ("the Placing"). TheBoard has received commitments from Greenbrook Industries Limited("Greenbrook"), subject to certain conditions, whereby Greenbrook will convert(on Admission of all new ordinary shares the subject of the Placing) alloutstanding balances of the loan due to it at that date into new ordinary sharesat the Placing price, thereby relinquishing any security over the Company'sassets. Greenbrook have also committed to accepting a placing participation ofup to £500,000 of new ordinary shares as part of any placing. All of theseshares will rank pari passu in all respects with the Company's existing ordinaryshares. It is emphasised that there can be no certainty at this stage that a Placing canbe successfully completed, nor that any other form of financing could beobtained in the event that a Placing cannot be successfully completed. A further announcement will be made when appropriate. For further information please contact: Mike Hartley, Executive Chairman, Servocell Group plc 07711 734631Gregor Paterson, Analyst, Brewin Dolphin 0845 213 4211Jon Fitzpatrick, Corporate Finance (NOMAD), Brewin Dolphin 0845 213 4222 About Servocell Servocell is a provider of Active Latch technology that controls with low energyinputs the movement or motion of mechanisms, such as locks. The Group's devicesare underpinned by piezo ceramic actuators, which are well established in manyapplications such as reversing sensors for motor vehicles. Through significantinvestment, Servocell has developed a unique methodology for creating actuatorswhich give relatively large movement at a low power input. The Company hasapplied this technology into modules under the Active Latch brand for sale intolock manufacturers' products. More recently, to fully exploit application of the technology, the Group hasbeen developing a range of "Ready to Go" products under the Cabinet Latch andActive Escutcheon brands. These are being sold primarily through majordistributors and where appropriate as private label lock manufacturer'sproducts. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Servelec Group