Cloudcoco Regulatory News (CLCO)

5 Sep 2006 07:01

Glen Group PLC05 September 2006 Glen Group plc ("Glen" or "the Company") Acquisition of Explore IT Limited ("Explore") The Board of Glen is pleased to announce that, through its subsidiary GlenCommunications Limited ("Glen Communications"), it has acquired the entireissued share capital of Explore for a cash consideration of £115,000, fundedfrom internal sources and existing bank facilities. Explore is a small IT services business based in Edinburgh providing IT supportservices, equipment supply and consultancy to SMEs. The business has recentlybeen refocused wholly on the SME market following the completion of a number ofcorporate and healthcare projects and as a result, has downscaled its operationssubstantially since its last published set of financial statements for the yearended 31st December 2005. Glen Communications intends to develop Explore as its SME focused IT servicesarm and will transfer its existing IT services business and support contractsinto Explore. This will allow Glen Communications to achieve greater servicedelivery focus in this area as it expands its operations. At completion of the acquisition, the directors of Explore have, by mutualconsent, resigned, eliminating the business development costs shown in thefinancial information below, as well as a corporate focused consultant. Thisleaves Explore with five continuing employees. Below are the results of Explore for the year ended 31st December 2005 takenfrom the unaudited filed accounts for that year expanded to include a breakdownof the turnover and gross profit into its various business sectors. Theunaudited figures for the half-year to 30th June 2006 taken from the internalmanagement accounts are also included. 6 Months ended Year ended 30th June 2006 31st December 2005 £ £Turnover:Corporate consultancy 26,507 165,375Healthcare consultancy 116,016 182,770IT Support services 132,855 269,472Total Turnover 275,378 617,617 Cost of sales 243,607 541,730Gross profit/(loss):Corporate consultancy (14,329) 1,711Healthcare consultancy 60,826 78,501IT Support services 34,756 48,625Business development (49,482) (52,950)Total Gross Profit 31,771 75,887Overhead 25,395 66,647Profit before interest and taxation 6,376 9,240Interest (net) 193 876Profit before taxation 6,569 10,116Taxation 0 0Profit retained 6,569 10,116 Glen Communications intends to complete the integration of the Explore businessby the end of September. Only the IT support services business will be continuedby Glen Communications and much of the overhead shown above is expected to beeliminated before the end of October 2006. Eclectic Group Limited, Glen'scorporate focused subsidiary, will benefit from the transfer of the residualhealthcare practice, including the transfer of the senior consultant. The balance sheets of Explore, taken from the unaudited filed accounts at 31stDecember 2005 and the unaudited management accounts as at 30th June 2006, issummarised as follows: 30th June 2006 31st December 2005 £ £ Fixed Assets 5,554 6,134 Current AssetsStock 0 13,012Debtors and prepayments 57,351 83,403Bank and cash 29,474 21,927Total Current Assets 86,825 118,342 Current LiabilitiesCreditors and accruals 19,959 44,876Taxation 0 1,786Value added tax 24,326 21,289Directors' loans 0 15,000Total Current Liabilities 44,285 82,951 Net Current Assets 42,540 35,391 NET ASSETS 48,094 41,525 Represented by: Share capital 233 233Reserves 47,861 41,292 SHAREHOLDERS' EQUITY 48,094 41,525 Since 30th June Explore has been trading at a loss as a direct result ofcarrying the salary costs of the corporate consulting business and the businessdevelopment arm. Commenting today, Graham J Duncan, Chief Executive of Glen Group plc, said: "Explore is a great little business which fits neatly into the Group and fromwhich we can see immediate value being added. This acquisition is very much inkeeping with our strategy to build up Glen through bolt on opportunities whichallow us to enhance our services to SMEs as well as continuing to groworganically" 5th September 2006 Enquiries: Glen Group plcGraham J Duncan, Chief Executive Tel: 0845 119 2100 College Hill AssociatesAlex Walters Tel: 020 7457 2020 This information is provided by RNS The company news service from the London Stock Exchange