1 May 2009 07:00
1 May 2009
ELECTRIC WORD PLC
("Electric Word" or the "Company")
Update on financing facilities and current trading
Current trading is in line with the Board's expectations and ahead of the same period in 2008. As a result of the Company's good current year performance and cash generation in each of its Professional Education, Sport Business and Specialist Consumer divisions, and to support its plans for continued development of the business, the Royal Bank of Scotland has agreed, subject to contract, to extend its £1.5m revolving credit facility with the Company to May 2011, from October 2010 previously. At the same time, the Company has agreed a revised repayment schedule for its loan agreement with Sussex Research Limited ("Sussex Research").
Sussex Trading Company Limited ("Sussex Trading") is a substantial shareholder in Electric Word plc, having previously sold a number of interests to the Company. Both Sussex Trading and Sussex Research are companies that are beneficially owned by Stewart Newton. The Group has debt of £1.2m with Sussex Research (down from £1.45m in June 2008), of which £600,000 was due to be repaid on April 30th 2009. Electric Word and Sussex Research have agreed that this will now be repaid on August 31st 2009, with all other conditions remaining the same (the "Transaction"). Following the positive start to the year, the Company's net debt at the end of March 2009 had reduced to £2.4m (£2.7m at the year end in November 2008) and payment was made in April 2009 of the final deferred consideration of £250,000 on the 2007 acquisition of Speechmark Publishing Ltd.
Under the AIM Rules for Companies, Sussex Research, Sussex Trading and Stewart Newton are treated as a related party of Electric Word. The Directors of Electric Word consider, having consulted with Panmure Gordon (UK) Limited, its nominated adviser, that the terms of the Transaction are fair and reasonable insofar as its shareholders are concerned.
Julian Turner, Electric Word's CEO, commented: "We are delighted with the positive start to the year and the continuing, strong relationships we have with our most significant stakeholders. The rescheduling of certain of our debt maturities allows us to continue to seek to take advantage of the opportunities in our markets, supported by our solid trading performance in this difficult economic environment."
- ENDS -
Enquiries:
| Julian Turner, Chief Executive, Electric Word | 020 7954 3470 |
| Tim Spratt/Nicola Biles, Financial Dynamics | 020 7831 3113 |
| Andrew Potts/Callum Stewart, Panmure Gordon | 020 7459 3600 |
Further information:
Stewart Newton holds 1,020,000 ordinary shares in Electric Word (representing 0.69% of the total shares in issue) and is the beneficial owner of Sussex Trading Company Limited, which holds 23,036,364 ordinary shares in Electric Word (representing 15.60% of the total shares in issue), representing in aggregate 16.29% of the total shares in issue. Sussex Trading Company Limited also holds £987,500 of convertible preference shares in Electric Word relating to the Company's acquisition of SportBusiness Group Ltd in December 2005 and £875,000 in convertible preference shares relating to the Company's acquisition of Special Education Publishing Limited in February 2008. Stewart Newton is also the beneficial owner of Sussex Research Limited. In June 2008, Sussex Research Limited advanced Electric Word a loan of £1.45 million, of which £250,000 was repaid on 30 November 2008. £600,000 is now due for repayment on 31 August 2009 and the balance of £600,000 due for repayment on 30 April 2010.