25 Jun 2008 16:48
25 June 2008
Avanti Screenmedia Group plc
("Avanti" or the "Company")
Funding update
The Company announced on 11 June 2008 that it is in advanced discussions for the sale of certain parts of the business. These discussions remain ongoing, but there can be no certainty that a sale of assets will be completed, and as such there may still be an urgent need for further short term funding. The Company also announced on 11 June 2008 the entry by certain of the Company's directors into Convertible Loan Agreements to raise approximately £100,000 before expenses.
The Company has today issued a circular to shareholders ("the Circular") confirming that the Company is seeking shareholder approval to undertake a placing of new ordinary shares and for the entry into the Convertible Loan Agreements, as previously announced. The placing authority is for the issue up to 100,000,000 new Ordinary Shares in the event that the Directors are able to identify suitable investors to secure further working capital for the Company. The EGM is to be held at the offices of the Company at 242b Blackfriars Road, SE1 9UF at 10.00 a.m. on 17 July 2008 at which shareholders will be asked to approve the resolutions as detailed in the Circular.
Background
The Company issued a trading update on 6 August 2007 stating that, following a difficult trading period immediately following the demerger in April 2007, the Company had begun the process of refocusing its business and was implementing a new business strategy. As a result of this new strategy and certain new management, trading was showing signs of improvement, however, the previous poor trading and the costs associated with the implementation of the new strategy had had an adverse effect on the Company's cash resources which necessitated the Company seeking additional funding.
The new strategy involved:
A complete restructure of costs that included: moving premises; outsourcing of various functions; and staff restructures;
The re-negotiation of all contracts;
The establishment of two 'local' advertising sales teams; and
The introduction of a wider range of creative services.
However whilst the Company's advertising sales performed strongly initially, those sales tailed off during the last quarter of its financial year, coinciding with a downturn in national advertising sales in the out of home sector, and the end of the football season.
Following a strategic review by the Board, the Group will be refocusing its efforts on digital solutions and services within the leisure and retail sectors. This will be supported by expanded creative and consultancy services.
Current Trading and Prospects
After nine months of extensive restructuring and the successful delivery of the first phase of our strategy, to reduce costs, renegotiate contracts, develop stronger relations with our clients and focus the services we provide, we continue to develop more robust revenue streams through advertising sales, which were up by 145 per cent in the first half of the year.
In addition there have been significant new business wins during the period, including: a place on the BBC's production roster, Vodka Revolution Bars, Sports Café, and the Bluewater shopping mall.
We are confident that, in addition to restructuring our business, we have also brought new creative concepts to market, including AVA, an on-screen avatar that introduces the shopper to key events, latest news, weather and facilities around the malls in a creative and dynamic way.
Subject to shareholder approval and securing sufficient further funding, the Company can look forward with confidence to further developing and growing its business and creating a leading digital marketing business for the future.
The Company will update Shareholders further in due course.
Enquiries:
| Avanti Screenmedia Group plc Simon Rees, Chief Executive Gary Truman, Finance Director
| 020 7902 2345 |
| Charles Stanley Securities Nominated Adviser Russell Cook / Freddy Crossley
| 020 7149 6000 |
| Bishopsgate Communications Limited Jenni Herbert | 020 7562 3355 |