Sysgroup Regulatory News (SYS)

14 January 2013

Daily Internet plc

("Daily" or "the Group")

Admission to AIM and Commencement of Dealings

Highlights

·; Daily (AIM: DAIP) has joined AIM from the ISDX Growth Market, formerly PLUS Market, and dealings in the enlarged issued share capital will commence at 8.00am today

·; Daily provides Web Hosting services to more than 50,000 customers throughout the UK and is currently ranked as the 13th largest supplier of .uk domain registrations out of over 2,300 suppliers (source: Nominet)

·; Focused on mass-market Web Hosting products, which has driven a high recurring revenue model with 64 per cent. of customers currently bringing repeat business

·; To support the development of Daily's new product range and its move to AIM, Daily raised £550,000 by way of conditional subscription for 25,000,000 new Ordinary Shares at 2.2p per Ordinary Share on 20 December 2012

·; Managing Director of Daily, Abby Hardoon, has been involved in the Web Hosting business since 1996 and is supported by a highly experienced senior management team. Successfully sold his previous hosting venture "Host Europe plc" to PIPEX Communications plc in 2004 for over £31m

·; On admission the Group will have an estimated market capitalisation of £3.6 million

Abby Hardoon, Managing Director, commented:

"Daily Internet has achieved sustained organic growth since its formation. The Company is now joining AIM as the board believes it will assist the Group in raising additional equity capital, provide improved liquidity for investors and enable future acquisition opportunities as we seek new technologies to improve market share, gain access to new markets, increase revenue and consolidate the Group's market position."

The Group

The Group is an established Web Hosting solutions provider focused on delivering a broad range of reliable, cost effective and scaleable Web Hosting services to small and medium sized businesses and individuals in the UK. Services such as domain registration, email and shared server Web Hosting services, online remote back up services, e-commerce solutions and Virtual Private Server services represent the Company's current business activities.

The Group's strategy is to continually extend its range of products and services to provide customers with a 'one-stop shop' for all their internet hosting requirements, whilst maintaining and expanding its highly automated system, allowing customers to self-help and therefore minimising overheads through optimal efficiency. The Group's "Phase II" project will broaden its operations into Dedicated Servers, Cloud Hosting and Managed Hosting Services.

The Group's Phase II development

The Group has demonstrated continued organic growth over the last three years whilst the UK economy has remained depressed. As companies, both large and small, continue to seek to improve profitability through the outsourcing of hosting and the associated costs savings that this delivers, the Group has sought to identify further opportunities for organic growth. The Group launched its Phase II projects with the aim of extending its remit into Dedicated Servers, Cloud Hosting and Managed Hosting solutions.

The Group intends to broaden its product offering to introduce a range of dedicated server products and value added services, extend its Virtual Private Server platform to a Cloud based solution, introducing new features, and to develop and roll out new reseller hosting products. In addition, the Group intends to upgrade its existing systems, including upgrading and refreshing its website and control panel, and streamlining its order processes. To support this expansion, the Group intends to expand its marketing initiatives and to recruit additional developers and marketing personnel.

Key Strengths

The Directors believe that Group has the following key strengths:

·; Provide high quality customer service - ensuring customer satisfaction to drive customer recommendations and repeat custom

·; Price and feature competitiveness - delivering repeat purchases from existing customers

·; Broad range of reliable and highly featured internet hosting products - allowing the Group to be a one-stop supplier for internet hosting products

·; Greater automation of services - enabling customers to self-serve and keeps staff numbers low and drive efficiency; and

·; Apply knowledge gained at Host Europe plc - driving organic growth via new product introduction and existing product enhancements, increasing efficiencies and system improvements.

Strategy

The Group's strategy is to achieve strong organic growth by maximising revenue opportunities through its current product range and the completion and implementation of its Phase II development. This will be driven by improving profit margins, whilst maintaining and increasing repeat customer business and continuing to focus on customer service and value.

In addition, the Directors intend to expand and develop the Group's portfolio of services by seeking complementary acquisition opportunities which will enhance market penetration and provide access to new markets as well as improve product usability and function.

Furthermore, the Board is considering a move into the ownership and operation of data centres as an addition to its current services. Accordingly, the Group will seek to identify and evaluate potential opportunities for space to create a data centre or look to acquire an existing data centre which it could utilise for its own purposes.

Directors and Company Secretary

John Michael Edelson (Non-executive Chairman), aged 68, has been a Founder Director or Chairman of a number of companies admitted to the AIM market, including Prestbury Group plc, Knutsford Group plc, Mercury Recycling Group plc (now Ironveld plc) and ASOS PLC. He was a non-executive Chairman of Bramhall plc, subsequently renamed Magic Moments Internet plc and then Host Europe plc, which acquired Magic Moments Design Limited in September 1999, a company of which Abby Hardoon was one of the founding members. He has also been on the board of Manchester United Football Club Limited since 1982.

Abby Hardoon Adulayavichit (Managing Director), aged 50, is a Business Administration graduate from George Washington University, Washington DC USA. He was a founder of NETDesign Limited and Magic Moments Internet plc. Following the admission of Magic Moments Internet plc to trading on AIM in September 1999, he served as Chief Executive Officer. Under Mr Hardoon's leadership that company acquired two other hosting companies, WebFusion Internet Solutions Limited and One2One GmbH (now Host Europe GmbH). Following the acquisition of One2OneGmbH, Magic Moments Internet plc was renamed Host Europe plc. Mr Hardoon, together with his team, successfully grew the combined business organically into profitability until it was sold in April 2004 to PIPEX Communications plc for over £31m.  

Julie Ann Joyce (Finance Director), aged 47, is a Fellow of the Chartered Association of Certified Accountants. She was employed as Finance Manager of WebFusion Internet Solutions Limited, an internet hosting company which was bought by Magic Moments Internet plc in May 2000. She became Group Financial Controller for Host Europe plc and its group companies following its acquisition of WebFusion Internet Solutions Limited and continued in this role for the SME hosting division of PIPEX Communications plc after the successful sale to PIPEX in April 2004. She also has extensive auditing and private practice experience, having spent 10 years in this sector prior to her move into commerce and industry.  

Robert Khalastchy (Non-Executive Director), aged 50, is a graduate of the University of Sussex where he received a Bachelor's degree in Electronic Engineering. Mr Khalastchy has been involved in commercial property management for the last 20 years, working with high net worth oversees clients, assisting in the management of their total UK portfolio and various planning applications, as well as the day to day management of the portfolio. In 2001 he set up RK Management Limited, a commercial property portfolio company, dealing with overseas and local clients. RK Management Limited successfully grew its property portfolio to over £35 million, and subsequently sold the majority of its portfolio in 2007 & 2008. Since that time Robert has been involved in residential block management and set up Sterling Property Management (UK) Limited at the end of 2010 for this purpose. Sterling Property Management (UK) Limited has been growing steadily and continues to do so.

Clive Maudsley (Company Secretary), aged 46, is a Fellow of the Institute of Chartered Accountants in England and Wales and a former audit partner with two national firms, Baker Tilly and UHY Hacker Young. During his time as audit partner he was responsible for the audits of a number of listed companies and advising companies on technical and corporate governance matters. Mr Maudsley was also registered with the US PCAOB to carry out work in accordance with the Sarbanes - Oxley Act of 2002. Since October 2011 he has run his own consultancy business advising SME's and is currently acting as Interim Finance Director and Company Secretary for a number of companies.

Admission to Trading and Dealing Arrangements

Following admission to AIM, the enlarged issued share capital of Daily will comprise 118,984,892 Ordinary Shares of 0.5 pence each.

Lock-in arrangements

Each of the Directors and Emma Myers have undertaken that he/she and his/her connected persons will not, save in the event of an intervening court order, a takeover offer becoming or being declared unconditional, where required by law an intervening court order, dispose of any interest in the Ordinary Shares for a period expiring on the first anniversary of Admission or thereafter dispose of any interest in the Ordinary Shares for a further period of 12 months, without offering the same for sale through Merchant Securities (as the Company's broker), provided that the price and settlement terms offered are competitive.

Ends

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