18 Jun 2008 07:00
18 June 2008
CSS Stellar Plc
Disposal of interest in subsidiary
The Directors of CSS Stellar plc ("CSS") are pleased to announce that CSS has agreed to dispose of its wholly owned subsidiary, The Peters Fraser & Dunlop Group Limited ("PFD") to PFDH Limited, a newly formed company backed by a consortium of investors led by Andrew Neil. PFD is one of the UK's oldest and largest talent management agencies with offices in London and New York.
The decision to dispose of PFD followed an operational review by the CSS board, in which it became clear that there are no benefits to continuing to develop the activities of PFD and CSS's other operations within the same group. The Directors concluded that it is in the best interests of CSS shareholders for the Group to focus on the core business of Sports Marketing and Events and to effect a disposal of PFD.
Total consideration is a maximum of £4.0 million, of which £3.75 million is payable in cash on completion, with the balance of £0.25 million payable in cash in 2011 dependent on PFD's earnings in the three years to 2010.
PFD's operating profit for the year ended 31 December 2007 was £0.4 million (2006: £0.7 million) on turnover of £9.4 million (2006: £9.3 million), with net assets at 31 December 2007 of £1.7 million (2006: £1.4 million). The disposal is expected to generate a profit of £3.4 million before write off of goodwill of £3.6 million.
Due to the size of PFD relative to the CSS Group, the sale is conditional on the approval of the CSS shareholders at an Extraordinary General Meeting ("EGM") to be held on Monday 7th July 2008. A circular containing further details of the transaction and formally convening the EGM is expected to be posted to shareholders on Friday 20th June 2008.
Subject to the approval of the shareholders, it is expected that completion will take place following the EGM. The proceeds from the sale will be used to reduce the Group's borrowings and for reinvestment in group activities.
CSS expects to issue its preliminary statement of its 2007 results on Friday 20th June 2008.
David Buchler, Chairman, CSS Stellar said:
"Following a review of the Group's direction, it was decided that CSS Stellar's future is best served by focussing on our core business of Sports Marketing and Events. This disposal comes at the right time for CSS, providing value for shareholders and creating a more streamlined business which is in a good position to now move forward.
PFD has been a valuable contributor to the Group, and the Board would like to thank Caroline Michel and her team for the hard work they have put in, and wishes them well in the future. PFD has been through a traumatic period of change and this sale will provide a platform for the business to return to a market leading position."
- ends -
Enquiries
David Buchler, Chairman, CSS Stellar Plc
Telephone: 020 7647 9903
John Craven, Landsbanki Securities (UK) Ltd
Telephone: 020 7426 9000
Stephen Benzikie/ Andrew Benbow, Bell Pottinger Corporate and Financial
Telephone: 020 7861 3232
Primorus Inv. (PRIM)