Last checked at 3 Jul 2009 17:15
For Immediate Release
3 July 2009
DawMed Systems plc
("Company")
Sale of Operating Subsidiary
DawMed Systems plc ("DMS") announces that it has today signed a conditional agreement with Wassenburg & Co B.V. ("Wassenburg") for the sale of all the issued share capital in DawMed International Limited ("DIL"), DMS' sole operating subsidiary. The consideration for the sale is the sum of £950,000 in cash (to be paid on completion). Completion accounts will be drawn up as at 1 July 2009 and there will be an adjustment to the consideration on the basis of DIL's net assets being more or less than £75,000. DMS and Wassenburg will each share 50% of any such shortfall in or excess of net assets.
Whilst the Directors believe that the Second Interim Results were relatively satisfactory and pointed to an anticipated continuation of growth up to the period ended 31 March 2009, the Board considers that there are fundamental reasons why the present business does not provide a long-term basis for the Company's future viability as an independent entity. The Company is largely reliant upon its distribution agreement with Wassenburg for its imported equipment and the vagaries of the Sterling/Euro currency exchange rates mean that any profit margin on sales can be easily wiped out by a small change in the exchange rates.
The sale of DIL is subject, inter alia, to the consent of shareholders of DMS. Conditional upon the completion of the sale of DIL, John Crispin and Mark Adamson will cease to be directors of DMS, but will continue as directors of DIL.
The Directors of DMS believe that, having explored other sales opportunities, the sale of DIL at the above price is the best return that can be expected. Following the sale, the Company will be an investing company with net cash resources of approximately £800,000 being the proceeds of the sale, which, together with available bank finance will be utilised for the proposed investing policy.
In the 18 months to 31 March 2009, DIL reported an audited loss on ordinary activities before taxation of £473,410 (year ended 30 September 2007: £571,508) on a turnover of £12,209,849 (year ended 30 September 2007: £4,976,158). During this period, DIL issued 2,184,500 new shares at par to the Company to strengthen its balance sheet. At 31 March 2009, DIL had net assets of £83,870 (30 September 2007 net liabilities: £1,627,220).
A more detailed explanation of the trading performance of DIL will be provided in the circular to shareholders referred to below.
Following the sale of DIL, DMS will become an investing company for AIM Rules purposes and its proposed investing policy will require approval by shareholders of DMS. Following completion of the Sale the Continuing Directors, being Kevin Gilmore, Gordon Arbib and Nicholas Trigg, propose that, instead of winding up the Company, the Company's share capital should remain admitted to trading on AIM and that the Company's New Investing Policy should be based predominantly upon the acquisition for and development of and/or investment in commercial property, commercial property agency and the acquisition of land for and development of high end residential property, together with potential corporate acquisitions, the latter mainly in the property sector.
A circular will be despatched to DMS shareholders as soon as reasonably practicable, which will provide further details of the sale and the reasons for the sale, and convening two general meetings, the first to approve the sale of DIL and the DMS' proposed investing policies under the AIM Rules (which will be ordinary resolutions) and the second to approve the change of name of DMS (which will be a special resolution).
3 July 2009
Enquiries:
Kevin Gilmore
Chairman
DawMed Systems plc 01608 682244
Roland Cornish
Chairman
Beaumont Cornish Limited 020 7628 3396