Riverfort Regulatory News (RGO)

2 Feb 2007 07:00

Caldwell Investments PLC02 February 2007 Caldwell Investments reviews current operations and investigates bio-dieselfeedstock project The board of Caldwell Investments ("Caldwell" or "the Company") announces thatit has carried out a review of its current operations and is investigating thefeasibility of a biodiesel feedstock project in Brazil. Caldwell's underwear business has been subject to growing margin pressure.Retailers are increasingly moving to direct sourcing and the board expects thiswill continue to impact turnover in the future. As a result, the board isplanning to reduce its underwear business in Germany with a view to withdrawingfrom distribution before the lease on the Company's German warehouse premisesfall due for renewal in December 2008. It is anticipated that Caldwell willcontinue to source product for certain of its German customers on an agencybasis, removing the requirement to maintain a storage and distribution centre.The Company will continue to distribute underwear in the UK and is experiencingincreasing orders in this market in the current financial year. The Company's baby buggy parasol business, "NinaClip", is experiencing a reducedvolume of orders which the board believes is due primarily to a change in thedesign of baby buggies which now incorporate integral hoods removing therequirement for a separate parasol. It is the board's intention to continue tosupply this market, although an ongoing reduction in demand is expected and theoperation will therefore be scaled accordingly. The Company's garden furniture and sun canopy business, "NinaSun" is also underreview and the board is considering a number of options for this operation,including franchising. In consideration of the anticipated changes in its operations, the board hasalso taken the decision to dispose of the Company's premises at Skelmersdale,which is expected to realise a cash gain in excess of £100,000. In view of the above anticipated changes in its existing businesses, the boardhas been actively investigating a new area of operation for Caldwell and hasidentified bio-diesel as a rapidly growing market. The board believes this is amarket whose growth will continue to be driven by legislation and theenvironmental lobby and one where there is substantial potential demand butcurrently limited sources of supply. An initial review has confirmed the market opportunity for the production ofjatropha crude for the esterification of bio-diesel and the board is nowcarrying out a more detailed feasibility study which includes preliminarydiscussions with potential esterifiers and commodity brokers, sourcing of keypersonnel and the planting of a trial plantation of 1000 jatropha trees inBrazil. To progress this project further would require a significantfundraising by Caldwell and shareholder approval. Interest has been expressedby potential investors in Brazil. The board of Caldwell emphasises that thisproject is still at a very early stage, requires further due diligence and issubject to a number of major uncertainties, including funding, recruitment oflocal management, access to suitable land and successful cultivation of theplantation. This information is provided by RNS The company news service from the London Stock Exchange