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14 May 2008 07:00
COSALT PLC
("Cosalt" or "the Group")
Disposal of Banner Limited ("Banner") & Acquisition of Safety At Height Services Limited ("Safety At Height")
In line with the Group's strategy to focus on its Marine Safety services business and divest of non-core activities, the Board of Cosalt today announces the sale of Banner Limited, the Group's school uniform and childrenswear business, and the acquisition of the assets of Safety At Height Services, a fall arrest protection business based in Aberdeen.
Disposal of Banner
The Board has been seeking to exit from the Group's non-core School Uniform and Childrenswear activities as a part of its strategy of focusing on Marine Safety. The disposal of part of the Banner site in Seaham in May 2007 for £ 1.2 million (realising a profit of £ 1.1 million) was the first step in this process.
The Board is therefore now pleased to announce that it has sold Banner Limited to IDP (Holdings) Limited ("IDP") for a total consideration of £ 4.5 million, of which £ 1.5 million has been received in cash and will be immediately utilised to reduce the Group's borrowings. The remaining £ 3.0 million will be satisfied by 2008-10 loan notes repayable by the end of 2010 and paying interest of 7% per annum from 13 May 2009.
In addition, in the event that IDP disposes of Banner within 18 months, Cosalt will be entitled to 30% of the sale proceeds attributable to shareholders and, if the remaining Seaham property is sold within two years, 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 Height Services (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 in Aberdeen, is the distribution and servicing arm for the offshore oil and gas industry of Capital Safety, the world's leading fall arrest protection equipment manufacturer.
Fall arrest harnesses are obligatory when working at heights on oil and gas platforms and new regulations in the UK now require that they are inspected and recertified annually. This is a new legislative driven service opportunity which the group fully intends to capitalise.
Per Jonsson, Chief Executive of Cosalt, commented:
"The disposal of Banner is important in further focusing the Group's earnings and management on our rapidly developing core Safety business, in which we are fast becoming a major player. Safety at Height Services is a tactical addition to our recent GTC acquisition, serving the increasingly regulatory-driven, off-shore oil and gas industry."
14 May 2008
Enquiries:
Cosalt 01472 504504
Per Jonsson, Chief Executive
Neil Carrick, Financial Director
College Hill
Mark Garraway 020 7457 2020
Adam Aljewicz
Cavendish
Philip Barker 020 7908 6020
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