Last checked at 30 Jun 2008 07:00
Glen Group plc ("Glen" or "the Company")
Acquisition of Colloquium Limited ("Colloquium")
Glen Group plc, the Edinburgh based provider of integrated telecommunications solutions aimed at the SME market, is pleased to announce that it has acquired the entire issued share capital of Colloquium, a public telecommunications operator and Internet Service Provider ("ISP") based in Paisley, near Glasgow, through its subsidiary Pinnacle Telecom plc ("Pinnacle").
The acquisition of Colloquium was for a total consideration of £100,000 satisfied in cash from existing Company funds.
Colloquium has its own telecom switch and provides telecommunications voice and data solutions, including call provision and line rental, to SME customers. It has interconnect arrangements with BT, Virgin Media and THUS. As a registered public telecommunications operator, Colloquium has access to its own telephone number ranges, both geographic and non-geographic (such as 0845), allocated by OFCOM, and is able to port fixed line numbers to and from BT. This gives Colloquium more freedom in the market and will allow Pinnacle greater flexibility to provide a broader cost effective telecommunications solution to its customers. Colloquium is also an ISP, one of the oldest in Scotland, having first been established in 1995. It provides a full range of ISP services to the SME market. These services include the provision of broadband, hosting services, domain name registration and web design and implementation. It has also developed its own broadband voice ("VoIP") platform routing telephone calls over the internet onto Cisco and other vendor handsets.
The services provided by Colloquium are highly complementary to the focus of Pinnacle. Operating its own telecom switch gives Colloquium pricing which, at least for certain types of calls, can be more competitive than is available to a switchless reseller. With approximately 325 customers, Colloquium also provides Pinnacle with the opportunity to cross sell its other telecom solutions, such as mobile.
Below are the results of Colloquium for the year ended 28th February 2008 taken from the unaudited management accounts for that year. The unaudited figures for the year to 28th February 2007 are taken from the unaudited statutory accounts. The statutory accounts are prepared under UK GAAP.
| INCOME STATEMENT | Year ended | Year ended |
| 28th February 2008 | 28th February 2007 | |
| £ | £ | |
| Turnover: | ||
| Products and services | 518,292 | 485,554 |
| Cost of Sales: | ||
| Direct costs, including support salaries | (413,432) | (399,455) |
| Gross Profit | 104,860 | 86,099 |
| Overheads excluding depreciation | (80,301) | (76,020) |
| Depreciation | (21,843) | (22,989) |
| Operating Profit/(loss) | 2,716 | (12,910) |
| Interest (net) | 1,578 | 1,278 |
| Profit/(loss) before taxation | 4,294 | (11,632) |
| Taxation | 0 | 0 |
| Profit /(loss) retained | 4,294 | (11,632) |
| EBITDA | 24,559 | 10,079 |
At completion, one of the two executive directors of Colloquium will have left the business but will continue as a part-time consultant for a limited period. Had the 2008 results reflected the resultant cost reduction and other known adjustments being made post completion, EBITDA would have been not less than £50,000. The price paid for the business is therefore approximately two times adjusted historic EBITDA without recognising any other cost benefits to the wider Pinnacle Group.
Colloquium has no bank debt and has, historically, operated with free cash flow. The balance sheets below are taken from the unaudited management accounts as at 28th February 2008. The unaudited figures as at 28th February 2007 are taken from the unaudited statutory accounts.
| BALANCE SHEET | 28th February 2008 | 28th February 2007 |
| £ | £ | |
| Fixed Assets | 86,606 | 97,406 |
| Current Assets | ||
| Inventories and work in progress | 25,023 | 45,007 |
| Trade and other receivables | 49,000 | 13,760 |
| Cash and cash equivalents | 9,824 | 51,064 |
| Total Current Assets | 83,847 | 109,831 |
| Total assets | 170,453 | 207,237 |
| Current Liabilities | ||
| Trade and other payables | 59,823 | 97,798 |
| Other taxes and social security | 12,852 | 11,064 |
| Accruals and other payables | 4,187 | 9,078 |
| Total Current Liabilities | 76,862 | 117,940 |
| Total Liabilities | 76,862 | 117,940 |
| NET ASSETS | 93,591 | 89,297 |
| Represented by: | ||
| Share capital | 209,033 | 209,033 |
| Share premium | 27,088 | 27,088 |
| Reserves | 97,561 | 97,561 |
| Profit and loss | (240,091) | (244,385) |
| SHAREHOLDERS' EQUITY | 93,591 | 89,297 |
Commenting today Alan J Bonner, Chief Executive of Glen Group plc, said:
"This is the first acquisition we have completed since announcing recent changes to our structure and focus. The acquisition of Colloquium delivers valuable expertise, customers, cash flow and cross selling opportunities together with the enhanced status of a public telecommunications operator, all at a modest cost and we look forward to quickly integrating this business into the Pinnacle structure. Going forward, we will continue to seek further acquisition opportunities that can add value to our business."
30 June 2008
Enquiries:
| Glen Group plc | |
| Alan J Bonner, Chief Executive | Tel: 0845 119 2100 |
| Pelham PR | |
| Alex Walters | Tel: 0203 170 7435 |
| Seymour Pierce | |
| Jonathan Wright | Tel: 0207 107 8000 |