CloudCoCo Regulatory News (CLCO)

31 Mar 2006 07:01

Glen Group PLC31 March 2006 Glen Group plc ("Glen" or "the Group") Trading Update Very significant progress has been made in the six month period since 30September 2005. On 15th February, just over six weeks ago, we completed theacquisition of Eclectic Holdings Limited ("Eclectic"), an IT value addedservices provider with a portfolio serving the corporate market. Theconsolidated interim results to 31st March 2006 will therefore reflect thetrading performance of Eclectic since 15th February 2006 as well as the resultsof Glen and our SME-focused operating company, Glen Communications Limited("Communications"). Eclectic Eclectic was acquired for an initial consideration of £2,212,500. A furthermaximum consideration of £787,500 will be payable, by a further issue of sharesin Glen, if Eclectic's profits before interest, tax and amortisation ("PBITA")exceed certain targets for the twelve month period ending 31st July 2006. Themaximum additional consideration is based on achieving PBITA of £400,000. The directors are pleased to note that the financial performance of Eclectic to28th February 2006, as shown in the latest unaudited management accounts, ismaterially better than the equivalent period last year, and currently ahead ofinternal budgets. The Board do, however, wish to stress that it is too early topredict whether the maximum earn-out will be achieved, although early signs areencouraging. The Board have taken steps to integrate the Eclectic business with the rest ofthe Group and have reorganised certain aspects of the Group operations with thecreation of a central support team in Glen. This change allows the operatingcompanies to focus exclusively on the operational side of the business andavoids duplication of back office functions. Communications Following the appointment in January 2006 of Craig Saunderson as ManagingDirector of Communications, we have made a number of significant changes to thebusiness in order to materially reduce its overhead costs and re-focus its salesactivity. The major changes are: • The operational headquarters have been moved from Scotland to Rotherham in South Yorkshire. This places Communications at the heart of the English market, which is approximately ten times larger than the Scottish market. A sales and support base remains in Scotland to service Scottish customers. • We have exited our prepaid phone card business, which had ceased to be a core activity. This was achieved in a management buy-out of this business, at a nominal sum, which allowed us to take costs off our books. • We have revisited and enhanced some aspects of our sales performance and have reduced the size of our sales team. We now have a fully focused, and more stable, sales group of six individuals. These changes are already starting to have a positive effect on the business. We are also pleased to report that Communications has recently signed a reselleragreement which will allow us to launch a full carrier-class Voice over IP("VoIP" or "broadband voice") service to the business market. The Glen broadbandvoice service, which will be hosted independently, will provide a rich featureset and be competitively priced. We expect to formally launch this early in thenext quarter. Although we have used a broadband voice service for the last year,we have been reluctant to promote it widely as it lacked certain essentialbusiness features. We are now confident that the new service has the range offeatures and robustness required to satisfy our target market. We expect to issue our interim results by mid June. Eric M Hagman CBEChairman31st March 2006 ENQUIRIES Glen Group plcGraham J DuncanChief Executive 0845 119 2100 College HillAlex Walters 020 7457 2020 This information is provided by RNS The company news service from the London Stock Exchange END