Last checked at 19 Dec 2011 07:00
Eleco plc
("Eleco")
Divestment of Timber Engineering Interests
The Board of Eleco (AIM: ELCO) announces the divestment of its Timber Engineering Interests with the sale of Gangnail Systems' UK timber engineering business, and of International Truss Systems' South African timber engineering business, to companies within the Illinois Tool Works Inc. group (NYSE: ITW).
Total funds receivable in relation to the sale amount to £7,962,500 of which £6,762,500 was received on completion and a further £1,200,000 was placed in escrow and will be released subject to certain conditions over the next 2 years. The funds received on completion have been applied to reducing Eleco's bank borrowings.
The divestment by Eleco of its timber engineering businesses is consistent with Eleco's previously announced strategy of reducing its involvement in certain of its capital intensive building systems activities and expanding its successful international software interests. The divestment also represents a major step towards strengthening Eleco's financial position.
Profit before Tax of Eleco's timber engineering businesses for the 12 months ended 30 June 2011 was £900,000. Net asset value as at 30 June 2011 was £1,900,000.The financial impact of the divestment on Eleco will be finalised and reported in Eleco's preliminary announcement of its results for the 18 month period ending 31 December 2011, which is anticipated in March 2012.
Enquiries:
John Ketteley
Executive Chairman Tel: 0207 422 8000
Matthew Turner
Finance Director Tel: 07907 545638
Cenkos Securities plc Tel: 020 7397 8900
Adrian Hargrave
Tim Anderson Tel; 0207 466 5103
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