Journeo Regulatory News (JNEO)

14 Dec 2007 07:00

TG21 Plc14 December 2007 Embargoed Release: 0700 hrs 14 December 2007 TG21 plc ("TG21" or "the Group") TG21 ANNOUNCES FURTHER DISPOSALS IN LINE WITH ITS STRATEGY TO REPOSITION THE GROUP TG21, the vehicle installation service provider supplying public transport CCTVand other monitoring systems, today announces that its subsidiary company, Toad(UK) Limited ("Toad"), has disposed of its "Sigma" and "Toad Security"businesses which distribute car alarms and immobilisers. In addition itssubsidiary, Integrated Technologies (International) Limited ("ITI") whichdistributes in-vehicle interface leads and trades under the name "Soundlinx" hasdisposed of its business. The disposals have been made by way of asset sales.The Sigma, Toad Security and Soundlinx names and inventory are to be sold toScorpion Electro Systems Limited ("Scorpion"), a private company based inChorley, Lancashire. These Toad and ITI businesses together achieved breakeven in the six months to30 June 2007 on sales of around £1.5m. Scorpion is to pay a total cash consideration of £1.67m for the businesses whichincludes £0.4m in respect of stock. £1m of the consideration was paid oncompletion (13 December 2007) and the balance is to be paid in installmentsduring 2008. £0.4m will be payable within 120 days of completion; £0.07m ispayable in June 2008 and £0.2m in December 2008. Toad and ITI will incurcombined reorganisation costs of £0.2m and will make an exceptional provisionfor remaining obsolete stock of £0.3m. In addition, the Group will make aprovision for onerous leases on vacant premises of £0.3m. The net cash proceedswill be applied to reduce the Group's bank borrowing. These disposals are a key step in the repositioning of the business. The Boardanticipates that certain non-recurring costs relating to this ongoingrepositioning will arise in the next financial year and the Board thereforecurrently expects that this will have some impact on final year earnings for2008. Peter Ward, Chairman of TG21, said: "Following the disposal of our in-car entertainment business earlier this year,this transaction is the next phase of our strategy to exit from our maturelegacy businesses. "Scorpion has a successful track record in the manufacture and distribution ofvehicle security products and they will benefit from the addition of the Sigma,Toad Security and Soundlinx products to their portfolio. "This disposal will allow us to reduce our net debt and focus our management andfinancial resources on further developing our vehicle installation and publictransport businesses, which we consider to hold the most compellingopportunities for growth." -Ends- For Further Information: TG21 plc Nick Grimond, CEO 020 8710 4000Hogarth Partnership Limited Barnaby Fry/Sarah Richardson 020 7357 9477Daniel Stewart & Co plc (Nomad) Graham Webster 020 7776 6550 Notes to editors Launched in 1993, the Company began as Toad plc and was focused on thedistribution of in-car entertainment systems and vehicle security products.Under the stewardship of Chairman Peter Ward, former Chairman and CEO of RollsRoyce Motors and Cunard Line, who joined the board at the end of 2001, TG21'sstrategy has been to reposition itself away from its legacy businesses intomarkets with better growth potential while leveraging its core strengths -nationwide field force of vehicle electrical engineers, call centre anddistribution facilities. In line with this strategy, in 2005 the Company took a controlling stake in 21stCentury Crime Prevention Services Ltd ("21st Century"), the preferred supplierof on-board CCTV systems for Arriva UK Bus. 21st Century has pioneered the useof WiFi with on board CCTV systems and was the first company to successfullylaunch automatic video downloads and a bus CCTV monitoring system (HeartbeatTM).In addition to Arriva UK Bus, clients of 21st Century include ArrivaScandinavia, Go-Ahead Group, Metroline, Kinch Bus and ACIS. In 2006 the Companybolstered this division, with a strategic investment in another bus CCTVbusiness, Cyberlyne Communications Limited ("CCL"). This investment was made byway of a loan of £430,000 to CCL and in parallel with this loan agreement CCLhas granted an option to TG21 to acquire the whole of its share capital. Recently the Company has completed a number of installations for a pilot 'pay asyou go' motor insurance scheme with a major insurance company and has severalother similar trials in progress. The Company was awarded these opportunities onthe back of the long and valued relationships which it has developed in thismarket through its insurance replacement services. Headquartered in Mitcham, the Group also has leased offices in Blackburn andemploys around 120 staff. This information is provided by RNS The company news service from the London Stock Exchange