SSY.L Regulatory News (SSY)

4 Jul 2006 07:00

CODASciSys PLC04 July 2006 Embargoed until 7.00am Tuesday 4 July 2006 CODASciSys plc ("CODASciSys" or "the Company") PROPOSED DEMERGER INTO CODA PLC AND SCISYS PLC PAYMENT OF SPECIAL DIVIDEND APPOINTMENT OF NON-EXECUTIVE DIRECTORS TRADING UPDATE FOLLOWING END OF FIRST HALF 2006 PROPOSED DEMERGER INTO CODA PLC AND SCISYS PLC The Directors of CODASciSys, the supplier of specialist software, consultancyand IT services, today announce the proposed demerger of the Company's CODA andBusiness Collaborator Divisions from CODASciSys (the "Demerger"). The principal features of the Demerger are as follows: • The Company's CODA and Business Collaborator Divisions, together with other related trading entities, will become part of a separate group under a holding company, CODA plc, which will be separately listed on AIM with the proposed ticker CODA; • The SciSys Division will continue to be operated through CODASciSys plc, which, following the Demerger, will change its name to SciSys plc with the proposed ticker SSY; • 1 share in CODASciSys plc will effectively become 1 share in SciSys plc and 3 shares in CODA plc; • Shareholders on the register of CODASciSys plc on 28th July 2006 will receive a special dividend of 25p per share. The payment date is expected to be 11th August 2006; • The Demerger is subject, inter alia, to the following conditions: o The approval of shareholders at an extraordinary general meeting of the Company ("the EGM") planned to be held in August 2006; and o The approval of the High Court of a cancellation of the Company's share premium account. • Mark Wells and Mike Greig have been appointed as Non-Executive Directors of CODASciSys plc. Following the Demerger, they will serve as Non-Executive Directors of CODA plc. The principal reasons for the Demerger are as follows: • Both businesses have demonstrated a track record of independent strength; • The Demerger provides an opportunity to enhance shareholder value by effecting greater levels of transparency of both businesses; • Independence will allow the two businesses increased focus on their respective markets, whose dynamics and drivers are very different; thereby enhancing the potential for growth of each; and • The interests of the management teams will be more closely aligned to the respective performance of the two businesses, thereby creating a greater degree of incentivisation. Further information on the Demerger and a notice of the EGM will be sent toshareholders in due course. The Demerger and admission of CODA plc shares totrading on AIM are expected to take place in late September 2006. Following the Demerger, the Boards of CODA plc and SciSys plc will be asfollows: CODA plc SciSys plcGraham Steinsberg Executive Chairman Mike Love Non-Executive ChairmanCliff Preddy Deputy Chairman and Senior Mark Hampson Chief Executive Officer Independent Non-Executive DirectorJeremy Roche Chief Executive Officer Stephen Hill Chief Financial OfficerBryan Hucker Chief Financial Officer Steven Brignall Executive DirectorMark Wells Non-Executive Director David Jones Non-Executive DirectorMike Greig Non-Executive Director Graham Steinsberg, CEO, of CODASciSys plc, commented: "We believe there are now compelling reasons to effect this Demerger, both froman investment and a commercial perspective. By giving corporate independence toCODA and SciSys, both companies will be better able to address their respectivemarkets. In addition, the Demerger will enhance shareholder value throughexposure to these distinct markets, separate operational management and improvedvisibility." Mike Love, Chairman of CODASciSys plc, added: "We see this as excellent news for all concerned: staff, customers andshareholders. Trading for both companies continues to be healthy and wetherefore look forward to continued success as separately listed entities." DIVIDENDS The Directors have assessed the ongoing capital requirements of both the CODAand SciSys Divisions and believe that the Demerger provides a suitableopportunity for the distribution of cash to shareholders as a means of returningimmediate value. This is based on the successful performance of the Company, thehealthy cash position achieved as a result and the positive outlook for bothDivisions. Therefore, as stated above, a special dividend of 25p per share will be paid tothe holders of CODASciSys plc shares on the register on 28th July 2006. Thespecial dividend is expected to be paid on 11th August 2006. A proposed interim dividend of 0.55 pence per SciSys plc Share and 0.75 penceper CODA plc Share is also announced (such interim dividends are proposed to bepaid following completion of the Demerger). This level of interim dividendswould be equivalent to an interim dividend of 2.8 pence per CODASciSys plcShare. APPOINTMENT OF NON-EXECUTIVE DIRECTORS The board is delighted to announce the appointment as Non-Executive Directors ofCODASciSys plc of Mark Wells and Mike Greig. Following completion of theDemerger, Mark Wells and Mike Greig will continue to serve as Non-ExecutiveDirectors of CODA plc. Mark Wells, aged 50, has extensive expertise in the applications softwaremarket, having been UK Managing Director of Dun & Bradstreet Software, COO atBrainpower NV (specialists in Asset Analysis Software for Wealth Management) andCEO at Image Metrics Plc (specialists in Image Analysis Software). Mark iscurrently non-executive director of DICOM Group plc (where he serves as a memberof the audit, remuneration and nomination committees). Mark will act as Chairmanof CODA's Remuneration and Nomination Committees. Mike Greig, aged 49, is a Fellow of the Chartered Institute of ManagementAccountants with considerable experience in the software & IT sector. Mike isGroup Finance Director at RM plc, where he has served since 1989 (prior to thishe was Finance Director at Case Group Ltd.). From 1999 until 2006 he was anon-executive director at Comino Group plc, where he served as SeniorIndependent Director and Chair of the Audit Committee until the company wasacquired by Civica during 2006. Mike will act as Chairman of CODA's AuditCommittee. TRADING UPDATE FOLLOWING END OF FIRST HALF 2006 CODASciSys is pleased to report that all Divisions have continued to performwell and, at this stage of the year, the Group expects its results for 2006 tobe in line with market expectations. The CODA Division enjoyed strong sales of its core financial management systemsin the first half of 2006, with notable recent new clients including Ligne Rosetand Louvre Hotels. The sales pipeline going into the second half of 2006 remainssolid. Demand for the CODA-Control solutions for compliance and fast close continue,with JJB Sports a notable recent success. The OCRA financial consolidationproduct has also generated good interest across the world and is already provingitself against more established competitors, resulting in sales and pipelinegrowing across the territories. Demand remains healthy both within new business and existing clients. Recentuser conferences in the Nordic region and UK have seen record attendances andthere has been considerable interest particularly in the new control andanalytic products. Business Collaborator has also continued to deliver strong results in theperiod. The SciSys Division continues to perform well in all primary market sectors:Space, Defence & Transport and Public Sector. The Division is characterised bylong term contracts and significant progress has been made with the major winsannounced in 2005. Milestones have been reached in the delivery of the Galileoprogramme in Space, the Integrated Regulation programme for the EnvironmentAgency and the FRES programme for Lockheed Martin. The provision of services tothe Cabinet Office under the contract announced last month is also progressingwell. There continue to be major near term opportunities for SciSys to develop furtherinto both existing and adjacent markets. In the first half of this year theDivision gained approved status in two additional Government categories for thesupply of IT-related services which places it in a good position to add to itsfuture pipeline of work. In addition, the award winning technology and methodsbeing developed through the current programmes have increased the Division'scompetitiveness, creating new opportunities in each sector. All Divisions of the CODASciSys group will continue to drive for organic growthin their respective markets. Ends FOR FURTHER INFORMATION PLEASE CONTACT: CODASciSys plc Tel. 01249 466466Graham Steinsberg, Group Chief Executive Bridgewell Limited Tel. 020 7003 3000Simon Bridges / Richard Banham Pelham Public Relations Limited Tel. 020 7743 6670 / 07802 442486Archie Berens / Philip Dennis This information is provided by RNS The company news service from the London Stock Exchange