Empresaria Group Regulatory News (EMR)

21 Feb 2005 07:14

Empresaria Group PLC21 February 2005 21 February 2005 Empresaria Group plc ("Empresaria" or the "Group") Acquisition of The Recruitment Business and Group trading update Acquisition of The Recruitment Business Empresaria is pleased to announce that on 18 February 2005 (but with effect from1 January 2005) it acquired a 68 per cent. equity stake in The RecruitmentBusiness Limited ("TRB") for a total consideration of up to £2.025 million. TRB is made up of three separately branded divisions, MacPeople, WebPeople andCreativePeople, each supplying creative and design related staff on both apermanent and contract basis to a range of markets including the media, publicand financial services sectors. TRB has 11 staff and operates out of oneCentral London office. It has grown rapidly over the last two years and has astrong market presence in London and the South East. The initial consideration for 68 per cent. of the issued share capital is £1.3million, which has been satisfied by £950,000 in cash and the issue of 458,714new ordinary shares of 5 pence each in Empresaria ("Empresaria Shares"). Theinitial consideration includes a payment, on a pound for pound basis, of£300,000 for the net cash currently within the business. Deferred considerationof up to £725,000 my be payable based on the operating profit and cash positionof TRB in the two year period to 31 December 2006. Of this deferredconsideration, up to £75,000 will be paid in cash, on a pound for pound basis,for additional cash within the business. The remainder of the deferredconsideration of up to £650,000 will be payable based on the financialperformance of TRB for the 24 months ending 31 December 2006. This furtherdeferred consideration will be satisfied either by the issue of new EmpresariaShares or, at Empresaria's option, cash. In conjunction with the acquisition of TRB by Empresaria, senior members of theTRB management team have subscribed for shares in TRB. Following thissubscription, Empresaria holds 65 per cent. of the equity in TRB, BernadetteSturley, the Managing Director of TRB, retains 30 per cent. of the equity andthe other members of the management team together hold 5 per cent. of theequity. For the year ending 31 March 2004, the last year for which audited accounts areavailable, TRB reported profit before tax of £293,000. At 31 December 2004, TRBhad positive cash balances of £324,000, no debt and net current assets ofapproximately £662,000. Application will be made for the 458,714 Empresaria Shares to be issued asinitial consideration to be admitted to trading on AiM, the market owned andoperated by London Stock Exchange plc. It is expected that trading in theseshares will commence on 24 February 2005. The Empresaria Shares issued asinitial consideration will rank pari passu in all respects with the existingEmpresaria Shares. The TRB shareholders have given an undertaking not to in anyway dispose of the Empresaria Shares issued as part of the initial considerationfor a period of 12 months from 18 February 2005. Commenting on the acquisition, Miles Hunt, Chief Executive of Empresaria, said: "We are delighted that TRB is joining the Group. The TRB brands are well knownin their respective markets and are strong additions to our existing portfolioof specialist staffing businesses." Trading update Trading for the Group during the last six months of 2004 was in line with thedirectors' expectations. The Financial Services businesses continued the good performance shown in thefirst six months of the year, whilst the anticipated fourth quarter improvementsin volumes in the Supply chain and Construction/Property Services businesseswere achieved. In the latter sector, FastTrack and Reflex HR, the two businessesacquired during the year, produced encouraging performances. Volumes were also up in the Public Sector businesses in the second half of theyear, which again performed well. The Specialist Brands business performed asexpected. Overall, the prospects for 2005 are encouraging as the Group continues to buildon its performance in 2004. Contractor volumes are ahead year on year,particularly in the Construction/Property Services and Public Sector businesses. Whilst, the slow-down in the retail sector may have some impact on the Group'scontract driving operations, this should be compensated by the performance ofthe Group's other sectors. Our associated company in Japan has commencedtrading and the initial signs are encouraging, particularly in relation tocontract business. The Group continues to explore additional opportunities inoverseas markets. The Group expects to announce its results for the year ended 31 December 2004 on25 April 2005. Enquiries: EmpresariaMiles Hunt 01293 649 900Robert W. Baird LimitedNick Tulloch 020 7488 1212 This information is provided by RNS The company news service from the London Stock Exchange