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14 May 2008 07:00
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COSALTΒ PLC
("Cosalt" or "the Group")
DisposalΒ ofΒ Banner LimitedΒ ("Banner")Β &Β Acquisition of Safety At HeightΒ Services LimitedΒ ("Safety At Height")
In line with the Group's strategy toΒ focus on itsΒ Marine Safety services businessΒ andΒ divest of non-core activities,Β the Board of Cosalt today announces the sale of Banner Limited, the Group's school uniform and childrenswear business,Β and the acquisition of the assets of Safety At Height Services, a fall arrestΒ protectionΒ business based inΒ Aberdeen.
DisposalΒ of Banner
The Board has been seeking to exit from the Group'sΒ non-coreΒ SchoolΒ Uniform and Childrenswear activitiesΒ as a part ofΒ itsΒ strategy of focusing on Marine Safety.Β Β TheΒ disposalΒ of part of the Banner site in Seaham in May 2007 for Β£ 1.2 million (realising a profit of Β£ 1.1 million) wasΒ the first step in this process.
The Board isΒ thereforeΒ nowΒ pleased to announce that it has sold Banner Limited to IDP (Holdings) LimitedΒ ("IDP")Β forΒ a total consideration ofΒ Β£ 4.5 million, of which Β£ 1.5 million has been received in cash and will beΒ immediatelyΒ utilised to reduce the Group's borrowings.Β Β The remaining Β£ 3.0 millionΒ will be satisfied byΒ 2008-10Β loan notesΒ repayable by the end of 2010 and paying interest of 7% per annum fromΒ 13 MayΒ 2009.
In addition, in the event thatΒ IDP disposes ofΒ Banner within 18 months,Β Cosalt will be entitled to 30% of the sale proceeds attributable to shareholders and,Β if the remaining Seaham property is sold within two years,Β Cosalt will receive 50% of the sales proceeds.
In the year to 28 October 2007 Banner made an operating profit of £ 1.25 million, however trading had deteriorated considerably compared to last year. Gross assets at 28 October 2007 were £ 10.2 million.
The disposal will result in a loss against its carrying value of £ 4.9 million before costs and goodwill impairment.
Acquisition of Safety At HeightΒ ServicesΒ (SAHS)
Cosalt has acquired the business and assets of SAHS for a cash consideration of £ 265,000.  The business and employees will transfer to Cosalt Lifting & Inspection (formerly GTC which Cosalt acquired on 12 October 2007).
SAHS, based inΒ Aberdeen,Β is the distribution and servicing armΒ for the offshore oil and gas industryΒ ofΒ Capital Safety,Β the world's leading fall arrestΒ protection equipment manufacturer.
Fall arrest harnesses are obligatory when working at heights on oil and gas platforms and new regulationsΒ in theΒ UKΒ now require that they are inspected and recertified annually. This is a new legislative driven service opportunityΒ whichΒ the groupΒ fullyΒ intendsΒ to capitalise.Β
Per Jonsson, Chief Executive of Cosalt, commented:
"The disposal of BannerΒ is importantΒ in further focusing theΒ Group'sΒ earnings and management on our rapidlyΒ developingΒ coreΒ Safety business,Β in which we are fast becoming a major player. Safety at Height ServicesΒ isΒ a tactical addition to our recent GTC acquisition, serving theΒ increasingly regulatory-driven,Β off-shore oil and gas industry."Β
14Β May 2008
Enquiries:
Cosalt 01472 504504
Per Jonsson, Chief Executive
Neil Carrick, Financial Director
College HillΒ
Mark Garraway 020 7457 2020
Adam Aljewicz
CavendishΒ
Philip Barker 020 7908Β 6020
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