MIL.L Regulatory News (MIL)

30 Mar 2006 07:30

Millfield Group PLC30 March 2006 Millfield Group plc Disposal The Board of Millfield Group plc ("Millfield") announces that contracts havebeen exchanged and completed today for the disposal of its interests in RSTGroup Limited and RST Audits Limited to James Ormston, the Managing Director andprincipal shareholder in RST Group Limited. Under the terms of the arrangements RST Group Limited and one of itssubsidiaries, RST Accountants Limited, will repay £500,000 of intra groupindebtedness to Millfield Group plc. Of this amount £400,000 has been repaid andthe balance of £100,000 will be repaid over the next six months. It is intendedthat these amounts will be applied as additional working capital within theMillfield Group. The 20% interest in the capital of RST Group Limited and the 19% interest in thecapital of RST Audits Limited held by Millfield Group plc have been soldtogether with the remaining intra group debt (with a book value of approximately£3.5 million) to Mr Ormston and to a company associated with him, for aconsideration of £2. The RST Group was primarily engaged in the provision of accountancy services andadvice and also engaged to a limited extent in the IFA business, which Millfieldhad hoped to expand. In the event this has not proved to be practicable and thistransaction represents an opportunity for Millfield to exit this business areareleasing management time and financial resource which can be devoted toMillfield's core business of the provision of financial advice. Commenting on the disposal, Paul Tebbutt, Chief Executive of Millfield Groupplc, said: "RST is an accountancy practice in which Millfield acquired aminority interest in 2003. The decision to dispose of our interest in thecompany is part of the Board's strategy of focusing on our core financial adviceproposition and divesting of such activities that are non-core." In the year to 31 March 2005 (the latest date to which audited accounts havebeen made up) RST Group Limited and its subsidiaries incurred a loss on ordinaryactivities before taxation of £479,263 (2004: £839,305). The net liabilities ofthe RST Group on a consolidated basis were £150,870 at that date. RST has been accounted for in the accounts of Millfield as a subsidiary andaccordingly the disposal is being treated as a related party transaction for thepurpose of the AIM Rules. The Directors of Millfield consider, having consultedwith Cenkos Securities Limited, Millfield's nominated adviser, that the terms ofthe transaction are fair and reasonable so far as shareholders are concerned. Press enquiries: Andrew Waterworth / Louise Dolan: Financial Dynamics on 0207 831 3113 This information is provided by RNS The company news service from the London Stock Exchange