Last checked at 23 Nov 2006 07:00
CORSIE GROUP PLC ("Corsie" or "the Group") CORPORATE AND TRADING UPDATE
The Board of Corsie, the AIM listed specialist in the assembly and sale of products and services to the leisure market, is pleased to provide shareholders today with a corporate and trading update addressing the successful integration of Kaloss - acquired in September - and an increase in warehouse capacity.
KEY POINTS
* Current trading ahead compared to last year; * Integration of Kaloss ahead of schedule; * ‚£554,000 of Kaloss overheads eliminated; and * Warehouse capacity increased from 7,500 sq. ft to 78,000 sq. ft on fav ourable commercial terms. CURRENT TRADING
I am pleased to report that trading has been in line with management expectations since the time of the Group's interim results and the Board anticipates that the year end results will be comfortably ahead of those last year.
Kaloss is trading profitably and has good opportunities within its respective markets. The Board believes that Kaloss has excellent scope for development and expansion and the Board's aim is to reinforce its position as a market leader within the health supplement market.
As highlighted in the Group's statement of 19 September, for the year ending March 2006, Kaloss delivered revenues of ‚£1.4m. The Board anticipates turnover for 2007 to be broadly in line with this figure, and looks forward to updating shareholders in due course.
SUCCESSFUL KALOSS INTEGRATION
On 19 September, the Group acquired the business and assets of Kaloss International Ltd., a distributor and wholesaler of health and beauty products, for ‚£434,000 which was subject to a net asset adjustment. I am pleased to report the final consideration has now been agreed at ‚£389,000. The reduction relates to certain office fixtures which were not acquired due to our relocation strategy.
Following the acquisition, the business was immediately relocated from Chesterfield to Musselburgh with none of the original Kaloss staff retained. One-off integration and redundancy costs are expected to be no more than ‚£ 90,000 with no further one-off costs anticipated in connection with the acquisition. The integration of Kaloss has eliminated ‚£554,000 of overheads from the ‚£626,000 required to operate Kaloss as a stand alone operation in Chesterfield. The Kaloss business will be immediately earnings enhancing.
WAREHOUSE CAPACITY INCREASED
As part of the Board's growth plan, Corsie has completed one acquisition since the Group's flotation in June and is working on various new distributorships which the Board hopes to update shareholders on in due course. The immediate priority is to consolidate our current position and grow market share accordingly.
To eliminate current space constraints, and provide capacity for anticipated future growth, the Board has concluded a 15 year lease with Premier Property Group for a 78,000 sq. ft distribution warehouse facility in Haddington, East Lothian.
It was the Board's intention to relocate to large adjacent premises on the same estate in East Lothian. However, the benefits of the Haddington facility meet all of the Board's criteria and will enable us to execute and consolidate our focussed distribution strategy under the one operating overhead. The premises have been secured on very attractive commercial terms, compared with average rents for distribution premises in the East Lothian area. In addition to the above terms, the Board has negotiated an option to purchase the freehold interest for ‚£1.4m. The option can be exercised during the first 5 years, subject to 6 months notice.
Commenting, Richard Corsie MBE, Chief Executive, said:
"With the acquisition of Kaloss fully integrated, strong new business pipeline, various distributorships under consideration and capacity increased, the Board believes it has now built a solid base from which to significantly drive the business to the next level, and looks forward to the next financial period with confidence."
--ENDS- Enquiries:
Corsie Group plc Tel: 0131 653 0535
Richard Corsie MBE, Chief Executive
www.corsiegroup.com
City Financial Associates Limited Tel: 020 7090 7800
James Caithie
Bishopsgate Communications Ltd Tel: 020 7562 3350
Dominic Barretto/Jenni Herbert
CORSIE GROUP PLC