ACC.L Regulatory News (ACC)

24 Sep 2008 07:00



FOR RELEASE 

7AM

24 SEPTEMBER 2008

ACCESS INTELLIGENCE PLC

("Access Intelligence plc" or "the Group")

(Software and computer services business)

Proposed Board Changes and Subscription 

Trading Update

Highlights

Jeremy Hamer, the Chairman, commented:

"The board changes, a stronger Balance Sheet, a reducing cost base and momentum at Due North are all tangible signs of significant progress which we anticipate will enable the Group to make a positive start to the next financial year and provide a solid platform to develop the business into the software services sector."

For further information:

 Background Note

Access Intelligence is based in York with subsidiaries in York, Stockport, Greater Manchester, Chorley, Lancashire and Newcastle upon Tyne. Following a strategic review the Group intends to concentrate on providing Software as a Service through its two key subsidiaries, MS2M and Due North. (A full background note is included at the end of this announcement).

  ACCESS INTELLIGENCE PLC

("Access Intelligence plc" or "the Group")

(Software and computer services business)

Proposed Board Changes and Subscription 

The board of Access Intelligence Plc undertook a strategic review of the Group's businesses earlier this year, and reached the conclusion that the Group should become more focused on the provision of software services and products as a hosted service thereby emphasising the recurring revenue streams capable of being generated by such businesses. In the interim results announcement of 6 August 2008, the board indicated that as a part of this strategy certain businesses were identified for disposal, and a senior executive would be appointed in due course. 

Today the board announces a trading update, details of the proposed board changes, a subscription for new shares and an extraordinary general meeting.

Board changes

As a first stage in the refocussing of the Group on software as a service, the Board of Access Intelligence is pleased to announce that Michael Jackson has agreed to become Executive Chairman of the Company. Michael brings extensive experience in acquiring and building software businesses. Jeremy Hamer has agreed to stand down as Chairman, but will remain as a Non-executive Director. Ian Savage has agreed to stand down as a Non-executive Director on 30 September 2008. Colin Davies will remain as Finance Director, and David Lowe will be appointed as a Non-executive Director.

These changes, with the exception of the resignation of Ian Savage, will take effect once shareholders have approved the resolutions at an EGM scheduled for 20 October 2008. Michael's appointment as Executive Chairman and David's appointment as a Non-executive Director, as well as the proposed subscription for new shares are conditional upon the resolutions being approved by shareholders.

Michael Jackson, David Lowe, Elderstreet Investments Ltd ("Elderstreet") and an associated party (together the "Subscribers"), intend to subscribe for 46 million new ordinary shares

Further biographical details of Michael Jackson and David Lowe are provided below:

Michael Jackson (Aged 58), Proposed Executive Chairman

Michael Jackson has specialised in raising finance and investing in the smaller companies sector for the past 20 years. He qualified as a Chartered Accountant with Coopers & Lybrand and spent 23 years as a director of Sage plc. During that time Sage's capitalisation rose from approximately £1 million to its current level of over £2 billion. Michael is founder and Chairman of Elderstreet, which is best known for its investment in young, ambitious technology businesses. Michael is a director and personal investor in many other quoted and unquoted companies, many of which have been involved in the technology sector.

David Lowe (Aged 54), Proposed Non-executive Director

David is a Chartered Accountant, qualifying with Coopers and Lybrand in 1977. He has been at Elderstreet Investments Ltd since 1996, where he became a director in 2007. He is responsible for the Management of the Elderstreet VCT Plc and represents Elderstreet on the board of Snacktime plc.

David has been an investor in, and director of, many private companies in different sectors over the past 30 years, and has gained a wealth of knowledge in assisting venture capital companies with their portfolio companies, including extensive pre-acquisition investigation. He is the sole shareholder and chairman of Garran Lockers Limited, and is a major shareholder and director of APT Controls Limited. He is the senior non-executive director of Sky High plc, and a non-executive director of ARC Growth Company VCT plc.

Operational Management

As announced along with the Group's interim results on 6 August 2008, Brendan Austin has stepped down as Chief Executive of the Group for health reasons. In July 2008, Alan Gray added MS2M to his existing responsibility for Due North. Alan and the Managing Directors of the businesses we are proposing to sell will report directly to Jeremy Hamer until the EGM planned for 20 October 2008. 

Subscription for new shares

Michael Jackson, David Lowe and Elderstreet has signed a subscription agreement whereby the Subscribers will subscribe for 46 million new ordinary shares at 2.75p per share.  After the subscription, the Subscribers will own 46 million ordinary shares representing 29.52 per cent. of the enlarged share capital.

Option agreements

The Company has also entered into option agreements whereby the Subscribers have each been granted options over 23,300,000 ordinary shares in aggregate. If all the options were to be exercised, these options would represent a total of 13.01% of the then issued share capital. The options are exercisable in whole or in part at any time following approval of the resolutions at the EGM.

Shareholder circular

A circular will be sent to shareholders shortly outlining the details of the proposed changes as above. The circular will contain details of an extraordinary general meeting at which shareholders will be asked to vote on these proposals.

The board considers that these proposals are in the best interests of the Group and its shareholders as a whole. The directors of Access Intelligence unanimously intend to vote in favour of the proposals that have been referred to here and which will be outlined in the circular.

Trading Update

In early August the Group reported that there had been no fundamental improvement in trading in the first eight weeks of the second half. During August Due North had three significant contract wins and continues to build its recurring revenue with some major projects still under tender.

Trading in the other Group businesses continues to perform below initial expectations. Accordingly the board has implemented a number of actions during the last few months to reduce costs. These actions are expected to produce annualised cash savings of £400,000 for the whole Group. There will be a one-off implementation cost of £135,000 in the current year.

The Group's operating companies made £12,000 profit in the 9 months to August before £278,000 of central costs. The fourth quarter has traditionally been the most profitable and although the board is anticipating a strong performance in this quarter, it does not expect to meet the market expectations of a Group profit of £250,000.

Chairman Jeremy Hamer commented "We have every reason to be optimistic about the future. The board changes, a stronger Balance Sheet, a reducing cost base and momentum at Due North are all tangible signs of significant progress which we anticipate will enable the Group to make a positive start to the next financial year and provide a solid platform to develop the business into the software services sector."

 Background Note

Access Intelligence is based in York with subsidiaries in York, Stockport, Greater Manchester, Chorley, Lancashire and Newcastle upon Tyne. Following a strategic review announced on 6 August 2008, the Group identified four operating subsidiaries for disposal. As a result the Group currently reports continuing operations and discontinuing operations separately. 

Continuing Operations

Due North

Due North, based in Newcastle-upon-Tyne, develops supply chain software solutions. Its principle focus is on e-procurement software, which is widely used in the public sector. The product suite enables organisations to manage the complete customer/supplier relationship from initial expression of interest, through tender evaluation and post-tender negotiation to contract award and life cycle management. It also offers a reverse auction facility. Over the last 6 years it has become the leading supplier of e-procurement solutions to the emergency services (police and fire and rescue) and local authorities and is a growing supplier to the NHS, Housing Associations and the Transport Authorities. These solutions are offered as a hosted service.

MS2M

MS2M, based in York, is a developer of compliance software for the financial services industry. Its core software products are "Track Record" and "Virtual Compliance Officer". These applications monitor individuals' activities within an organisation in real time, and identify their risk profile from a compliance perspective. Individuals are graded via a traffic light system in accordance with key performance indicators. In the case of risk identification, remedial advice is offered. Clients include RBS Group, National Australia Group, Liverpool Victoria, AXA and St James's Place. These solutions are offered both as a desktop and a hosted service.

Discontinuing Operations

Willow Starcom Ltd

Willow Starcom supplies data storage, retrieval and network solutions to mid-sized corporate businesses. It sells its services through a reseller channel which enables it to grow revenues with a minimum increase in headcount. The company operates a 24-hour support centre from its base in Chorley, Lancashire. 

Backup & Running 

Backup and Running provides offsite online data storage and retrieval to small and medium sized enterprises. Customers' data is encrypted to military standard level on site then compressed and stored at world class storage centres in the UK. The process is completely automated and the customers can determine the frequency of the back-up process to suit their own operating requirements. It is an ideal solution for companies with multiple locations or field operators using mobile computing. Backup and Running operates from Chorley in Lancashire. 

The Marketing Guild

The Marketing Guild, based in York, provides marketing and business development support to small and medium sized businesses (members) on a subscription basis. Members receive support through practical newsletters and regular training conferences which are held nationwide. They also have access via a helpline to the Marketing Guild knowledge base which contains more than 40,000 proven ideas, tactics and strategies. Platinum members have their own personal marketing consultant who provides telephone support to an agreed development plan. 

Wired Gov

Wired Gov provides, under license from the cabinet office, government news alerts from more than 100 departments and agencies. Subscribers can register their preferences by agency, department, key words and phrases. They can determine the frequency of the alerts from immediate to daily or weekly. Typical subscribers in the private sector are financial services organisations and professions.