Last checked at 13 Dec 2007 07:01
CORSIE GROUP PLC ("Corsie" or the "Group") BUSINESS UPDATE / ISSUE OF EQUITY
The Board of Corsie, the AIM listed specialist in the assembly and sale of products and services to the leisure market, today provides the market with the following update.
HIGHLIGHTS
* Placing to raise ‚£671,000; * New seven year Banking facility agreed with HBoS; * Two new distribution agreements secured; * Former Scottish Rugby Captain Jim Aitken appointed to Board; and * Sale of property option for ‚£350,000.
Placing
The Board is pleased to announce that it has raised ‚£671,000 through a Placing of 2,236,666 new Ordinary Shares at a Placing price of 30p ("the Placing"), to provide the Company with additional working capital to fund growth opportunities. As part of the Placing, Jim Aitken, David Mathewson and Graham Robertson, all directors of the Company, have invested ‚£450,000, ‚£65,000 and ‚£ 6,000 respectively.
Application has been made for the admission of the 2,236,666 new Ordinary Shares to trading on AIM. Admission of the new ordinary shares is expected to take place on 19 December 2007.
Distribution agreements secured
The Group has secured two new exclusive distribution agreements with Sovereign Laboratories of Sedona, Arizona ("Sovereign"). Under the terms of the agreements the Group has signed 3 year exclusive agreement to distribute the TRULAX range of products and the Viralox¡Æ'’ antiviral product.
These new contracts are in line with the Board's stated strategy to increase revenue through selective distribution agreements.
New Banking facilities secured
The Group's bank, The Bank of Scotland plc has agreed to provide ‚£2.15 million of committed debt facilities to the Group repayable over 7 years and an overdraft facility of ‚£0.20 million. The Board is pleased to have secured these facilities on a long term and committed basis.
Sale of property option
The Board is pleased to report that it is has agreed (subject to prior shareholder approval to be sought at a general meeting to be convened) to sell its purchase option over its property at Unit 5, Gateside Commercial Park, Haddington to Mr James Aitken (or an entity controlled by him) for a price of ‚£ 350,000.
As stated at the time of the preliminary results statement, the Board would consider leveraging the equity within the property to fund future targets and new distribution agreements. The Board has considered various options to release the available equity within the property and has concluded the sale of the purchase option is in the Company's best interests.
The Group will thereby generate ‚£350,000 (before costs) from this sale. Such proceeds will be received prior to 31 January 2008 and will be used to strengthen the balance sheet and fund the working capital needs of the business.
Board Strengthened
As previously announced, Corsie appointed Mr James ("Jim") Aitken as a non-executive director with immediate effect. Jim, a former Scotland Rugby Captain and well known for leading his country to a grand slam victory in 1984 and a 25:25 draw against the All Blacks, is an experienced and successful businessman, bringing to the Board a strong proven track record in business.
Related Party Transactions
The sale of the property option and the Placing both constitute related party transactions as defined in AIM Rule 13. The Directors of the Company (save for Jim Aitken, David Mathewson and Graham Robertson who are connected with the transactions) consider, having consulted with the Company's Nominated Adviser, City Financial Associates Limited, that the terms of the sale of the property option and the Placing are fair and reasonable in so far as the Company's shareholders are concerned. City Financial Associates Limited has relied on the directors' commercial assessment of the transactions.
Enquiries:
Corsie Group plc Tel: 01620 828 940 Richard Corsie, MBE, Chief Executive www.corsiegroup.com City Financial Associates Limited Tel: 020 7492 4777 James Caithie Bishopsgate Communications Ltd Tel: 020 7562 3350 Dominic Barretto Jenni Herbert About Corsie Group plc
Corsie is a provider of products to the worldwide leisure market. Its business operates in the UK and has customers in a number of geographical markets including Europe, Canada, Hong Kong, Malaysia, Australia and New Zealand. The business was founded by Richard Corsie in 1997 after he retired from the sport of bowls and following the buyout of Douglas Kenn Limited and Worth Sports Limited. Corsie operates from its headquarters in Haddington, near Edinburgh.
The Corsie Group is involved in the assembly and sale of products and services to the leisure market. The Group consists of three operating divisions: Spa Division, Surfaces Division and Sports Division. Within each division, the Group is focused on achieving growth both organically, and through selective acquisition of companies or businesses in the leisure market.
On 19 September 2006, Corsie announced that it had acquired the business and assets of Kaloss International Limited, a distributor and wholesaler of health and beauty products, for a cash consideration of ‚£434,000. Information on Kaloss can be obtained at: www.kaloss.com .
CORSIE GROUP PLC