(Alliance News) - Small to medium-sized business investor CEPS PLC on Wednesday said current trading is largely ahead of internal expectations and it expects to exit two investments.
So far in 2019, trading in all but one of the investor's subsidiaries are exceeding of board forecasts, CEPS said.
Elsewhere however, due to being unable to achieve cost savings, CEPS will divest its investments in Nottingham-based fabric manufacturer CEM Press Ltd, and bespoke sample book maker Travelfast Ltd, which trades as Sampling International. The two firms make up the CEM Group, CEPS added.
CEPS owns 80% of wallpaper and fabric manufacturer CemTeal Ltd, which in turn owns 98% of CEM and has sole ownership of Sampling.
Sampling was acquired in March for up to GBP1.2 million. The consideration for Sampling was largely performance related, and so far, CEPS has only paid GBP9, the investor added.
The investor bought Sampling with the intention of "creating one of the largest individual pattern book and shade card makers".
CEPS said: "Under a new management structure, it was hoped that the CEM Group would continue to expand and grow offering a breadth of services to customers.
"Despite management's efforts and cash injections from CEPS since March 2019, it has not been possible to achieve the envisaged savings and efficiencies from consolidating CEM's and Sampling's operations and streamlining processes."
After impairments, CEPS said it is owed GBP2.1 million by the CEM Group, most of which comprises of GBP1.8 million injected into the firms since the March acquisition of Sampling.
A sales process, to dispose of its stake in the firms, has begun.
"Since the sale process will necessarily be conducted over an accelerated timescale, interested parties are encouraged to pursue this opportunity as a matter of urgency," CEPS explained.
Shares in CEPS were untraded in London on Wednesday afternoon, last quoted at 32.00 pence each.
By Eric Cunha; ericcunha@alliancenews.com
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Ceps (CEPS)