29 Mar 2018 07:00
29th March 2018
Arena Events Group plc
Potential Legal Action - Arena Americas
Arena Events Group plc (AIM: ARE, 'Arena' or 'the Group'), announces that its US subsidiary, Arena Americas, has been informed by the US Attorney's Office ("USAO") that it has formally charged one of Arena America's previous customers for a violation related to the Small Business set-aside program. This customer won certain contracts from the US Department of Defence between 2007 and 2017 that were designed to support the development of small businesses and subsequently engaged Arena Americas, amongst other sub-contractors, to supply product and labour for the delivery of these contracts.
As a result of this, Arena Americas has been notified by the USAO that an investigation into Arena America's relationship with this customer has now been launched. Arena Americas is proactively engaging with the USAO in order to resolve this matter as soon as practicable.
The total revenue from contracts entered into with this customer, since the acquisition of Arena Americas in 2013, amounts to circa $4 million and generated EBITDA of less than $0.5 million. This revenue is less than 2% of the total Arena Americas revenue in the same period. The Board is unable to predict the outcome of this investigation and therefore the level of any potential fines imposed or settlement that may be negotiated by Arena Americas. However, with the information available to date, based on similar cases, we believe the USAO may seek to claim damages in the range of two times profits to two times revenues, implying a range of between $1 million and $8 million.
The Group is reviewing all work practices and any additional compliance procedures required to prevent any similar issues arising.
A further announcement will be made in due course.
The Group has had a strong start to trading in 2018 and will announce its final results for the year ended 31 December 2017 as planned, on 11 April 2018, which remain in line with expectations.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014
Enquiries:
Arena Events Group plc Greg Lawless (CEO) Piers Wilson (CFO)
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Via Alma
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Cenkos Securities (Nomad and Broker) Max Hartley (Corporate Finance) Julian Morse (Sales) | +44(0)207 397 8900 |
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Alma PR (Financial PR) |
+44(0)7580 216 203 |
Josh Royston / John Coles / Helena Bogle |
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Notes to Editors:
Arena Events Group plc is a provider of temporary physical structures, seating, ice rinks, furniture and interiors. The Group has operations across Europe, the US, the Middle East and Asia, and current clients include Wimbledon Tennis, The Open, PGA European Tour and Ryder Cup.
The Group services major sporting, outdoor and leisure events, providing a managed solution from concept and design through to the construction and integration of the final structure and interior. Contracts range in size and complexity from a simple equipment rental for a local outdoor event, to an integrated solution of multiple structures and interiors for a major international sporting event.