2 May 2012 10:35
2 May 2012
Eco City Vehicles PLC
("ECV" or "the Group")
Trading Update and Directorate Changes
Eco City Vehicles PLC, a developer and supplier of eco-friendly commercial vehicles and the London licensed Mercedes Vito taxi, is pleased to announce the following trading update and changes to its board of directors.
Summary:
·; Mercedes Vito more than doubles share of new London licensed taxi market to 37% in first quarter 2012
·; New London Vito taxi licenses up 244% to 203 vehicles in Q1 2012 (Q1 2011: 59)
·; Directorate changes streamline Board structure
Trading has remained robust since the previous announcement on 31 January 2012, when the Group reported a strong start to the new year with a doubling in new Mercedes Vito taxi sales in January compared with the same period in 2011.
The Group has continued to enjoy solid demand over the subsequent months and throughout the first quarter. Based on Transport for London (TfL) data, the Mercedes Vito increased its share of the new London licensed taxi market to 37% in the first quarter of the year, more than doubling from a 16% share in the same period last year. New Vito taxi licenses increased by 244% to 203 vehicles in the quarter vs. 59 in the same period last year, and 331 for the whole of 2011. This means that first quarter new licenses in 2012 represented 61% of the annual license sales achieved last year.
The surge in new taxi sales reflects the growing popularity of the latest version of the Blue Efficiency Vito taxi, which was launched a year ago and complies with stringent new European Union vehicle emission standards as well as providing superior quality, improved fuel efficiency, comfort and six-seat capacity.
The second quarter has started well and April saw the introduction of a new Mercedes-Benz (MB) funded initiative whereby MB will provide the purchaser of a new Euro 5 model taxi £1,500 in exchange for cab-owners carrying MB advertising for 18 months. The scheme, introduced after discussions with TfL, in support of initiatives to deliver cleaner air for London provides an additional incentive to taxi drivers affected by the 15-year age limit on London licensed "black cabs" that came into force earlier this year. The Group estimates that the new rules will create a potential replacement market of approximately 3,000 vehicles in London, providing a solid growth opportunity for 2012 and beyond.
Further to the announcement of 31 January 2012, the Group has today entered into an agreement with KPM-UK Taxi Plc Discretionary Pension Scheme (the "Pension Scheme"), whose beneficiaries are Peter DaCosta, Michael Troullis and Keith Marder (all directors and/or shareholders of the Group) to provide the Group with a short term loan of £0.5 million to provide working capital for the continued growth of the business. Interest will be payable at a fixed rate set at 3.9 per cent. above the average base lending rate of six high street banks on the sixth day following drawdown rounded up to the nearest multiple of one quarter per cent. ("Base rate"). Of this total, £0.25 million is due to be repaid in three months and £0.25 million is due to be repaid at the earliest of three months following demand or within fifteen months from the date of the loan. The receipt of the loan is expected by 31 May as the Pension Scheme is in the process of securing the liquid funds. This loan will be covered by the existing fixed and floating charge over the assets of the Group, excluding the leasehold property, in favour of the Pension Scheme. This loan is in addition to the loans disclosed in Table 1 below. The aggregate outstanding balance with the Pension Scheme prior to today was £1 million, as stated in the Group's announcement on 31 January 2012, which includes a remaining balance of £680,000 in relation to the £850,000 loan announced on 3 June 2010. In accordance with AIM Rules 13 and 16, the loans set out in Table 1 are required to be aggregated and classified as a related party transaction for the purposes of the AIM Rules for Companies. Accordingly, the independent Directors (being all of the Directors other than Peter DaCosta, Michael Troullis and Keith Marder), having consulted with Numis Securities Limited (in its capacity as the Group's nominated adviser), confirm that they are satisfied that the terms of the agreements are fair and reasonable insofar as shareholders in the Group are concerned.
The cash position of the Group remains tight following the challenging conditions in 2011. In addition to these loans provided by the Pension Scheme, the Group maintains the full support of its bank and is continuing to consider other funding options.
Board changes
The Group announces a number of Board changes to streamline its management structure, effective as of today. Michael Troullis and Roger Philips have stepped down from the Board. On behalf of the Board, Peter DaCosta, Chief Executive, would like to thank Michael for all his hard work and support over the last 37 years and wish him well in his retirement. The Board would also like to thank Roger for his contribution and support.
David Trendle has resigned by mutual consent as Finance Director to pursue other business interests. Ran Oren has been appointed as Interim Finance Director.
Disclosures under AIM regulations
Mr Oren (41) holds, or has held, the following directorships within five years prior to the date of this announcement:
Current directorships/ partnerships | Past directorships/ partnerships (past 5 years) |
William Ransom and Son Holdings Plc | Creative Outsourcing Solutions Limited* |
R.O Solutions Limited | COSi Holdings Limited* |
| Screwfast Foundations Limited |
*Mr Oren acts as an interim director and was a director of Creative Outsourcing Solutions Limited and COSi Holdings Limited (together 'Creative Outsourcing') and other group non trading companies related to them. Creative Outsourcing and some of the group non trading companies were put into administration by the directors as part of the sale of the trading company.
There is no other information that needs to be disclosed under pursuant to Schedule Two paragraph (g) of the AIM rules for companies.
Enquiries:
Eco City Vehicles plc | +44 20 7377 2182 |
Peter DaCosta, Chief Executive Officer | |
Ran Oren, Interim Finance Director |
|
Numis Securities Limited |
+44 20 7260 1000 |
Stuart Skinner (Nominated Adviser) | |
David Poutney (Corporate Broker) |
|
Luther Pendragon | +44 20 7618 9100 |
Neil Thapar, Alexis Gore |
|
Table 1 - Loans to the Company from the Pension Scheme
Date | Principle Amount | Outstanding Balance | Annual Interest rate | Term | Repayment | Secured* |
27 May 2011 | £170,000 | £170,000 | Base+4.5% | 5 year | Equal annual instalments | Yes |
9 August 2011 | £100,000 | £50,000 | Base+6% | 12 months | Equal quarterly instalments | Yes |
7 December 2011 | £75,000 | £75,000 | Base+4.5% | 3 years | Equal annual instalments | Yes |
28 March 2012 | £25,000 | £25,000 | Base+5% | 12 months | End of the Term | Yes |
27 April 2012 | £500,000 | £500,000 | Base+3.9% | 250,000: 3 months
£250,000 on 3 months' notice or no later than 15 months | On term
On term/on demand | Yes |
*Covered by the existing fixed and floating charge over the assets of the Group, excluding the leasehold property, in favour of the Pension Scheme