Issue of Equity

23 Jul 2007 07:00

Lawrence PLC20 July 2007 21 July 2007 Lawrence plc ("Lawrence" or the "Company") Placing of 2,718,500 new ordinary shares at 200 pence per share to raise £5.44 million The Board of Lawrence is pleased to announce that Charles Stanley Securities andNomura Code Securities have, on behalf of the Company, completed a conditionalplacing (the "Placing") of 2,718,500 new Ordinary Shares of 5p each (the"Placing Shares") at a price of 200 pence per Placing Share with institutionaland other investors to raise approximately £5.44 million. The Placing isconditional, inter alia, upon the Company obtaining shareholder approval ofcertain resolutions at an extraordinary general meeting to be held on 14 August2007 (the "EGM"). Background to and details of the Placing The proceeds of the Placing will be applied to accelerate the development of theCompany's Eco subsidiary which is now well established and represents the coreactivity within Lawrence. Eco was formed in 1993 as a joint venture to developand market pharmaceutical products principally for the treatment of medicalconditions in food producing animals worldwide. Eco has to date successfully obtained marketing authorisations (also known asdrug registrations) for in excess of 600 different treatments in over 70countries. Registration is a pre requisite in every country before sales canbegin and the veterinarian bodies that grant these registrations have becomeincreasingly stringent in their testing regimes to ensure the safety of thetreatments as they affect not only the animals but also consumers and theenvironment. These ever rising standards ensure the safety of the food that weeat but also have led to delays in gaining registrations and at increasingcosts. Lawrence has invested some £20 million on applying for and obtaining marketingauthorisations, as well as making applications for approximately 100 furtherapprovals which have been submitted and are commencing trial work. TheDirectors believe that this is a huge achievement for a relatively small companysuch as Lawrence, which has funded this work from its own resources. An opportunity now exists to accelerate the registration timetable, which willallow Eco to achieve more authorisations in a shorter time and also carry outmultiple trial work (as opposed to single trials which, due to the very natureof sick animals, can produce inconclusive results). The Board has alsoidentified various investment opportunities within the pet medication marketwhich it believes will enable the Company to exploit its knowledge and expertiseof animal pharmaceutical products generating significant opportunities withinthis sector. The Company will apply up to £2.2 million of the funds raised for progressingglobal registration of its products for three particular animal applications inthe food production market. In the pet medication sector, the Board hasidentified a further three products, in a market with estimated total annualsales of £1.5 billion, and which the Board estimates will require up to £1.0million for registration costs to gain the necessary marketing authorisations.In addition, the Board will allocate a further £2.0 million towards completingthe pipeline of work that the Company has already begun in its farmed animalproducts business, and for working capital. Details of the Placing Charles Stanley and Nomura Code have agreed to use their reasonable endeavoursto place 2,718,500 Placing Shares on behalf of the Company, representing a totalof 8.0 per cent. of the total issued share capital of the Company following thePlacing, with institutional and other investors. The Placing is conditional,inter alia, upon Admission. The Placing is expected to raise approximately £5.44 million, before expenses. Application will be made for the Placing Shares to be admitted to trading on AIMand it is anticipated that Admission will become effective and that dealingswill commence on 15 August 2007. It is expected that the Placing Shares will be delivered into CREST on 15 August2007 and that share certificates for the Placing Shares to be held incertificated form will be despatched by 28 August 2007. The Placing is not a rights issue or open offer and Placing Shares will not beoffered generally to Shareholders, whether on a pre-emptive basis or otherwise.A Circular containing details of the Placing and containing notice of the EGMhas been sent to shareholders today. Peter Lawrence, a Director of the Company, and his family have agreed tosubscribe for 500,000 Placing Shares, pursuant to the Placing. FollowingAdmission they will own 9,500,000 Lawrence ordinary shares representingapproximately 28.0 per cent. of the enlarged issued share capital of theCompany. The Directors have irrevocably undertaken to vote in favour of the resolutionsto be proposed at the EGM in respect of an aggregate number of 9,060,000Ordinary Shares representing approximately 29.1 per cent. of the issued sharecapital of the Company. The participation by Mr Lawrence is regarded as a related party transaction forthe purposes of the AIM Rules. In the opinion of the Directors, havingconsulted with Charles Stanley, the Company's Nominated Adviser, thesubscription by Mr Lawrence is fair and reasonable insofar as Shareholders areconcerned. Summary of results for 12 months to 31 March 2007 The Company has today released its preliminary announcement of results for the12 months to 31 March 2007. Turnover for the year was £18.3 million (2006:£20.3 million). Comparison with the 2006 figure is distorted following the saleof the Agil natural animal feed additive business in November 2006, and whichmade a contribution for eight months in the year under review. In addition, theUS dollar weakened by 8.5 per cent against sterling during the year and as themajority of sales are invoiced in dollars, this had a negative translationalimpact on the turnover. Profit before interest, tax, depreciation, amortisation and impairment for theyear to 31 March 2007 was £5.8 million (2006: £3.4 million) and includesdiscontinued activities and the profit on the Agil disposal. Amortisation roseduring the year from £2.2 million to £2.6 million reflecting the high level ofinvestment in new drug registrations. The amortisation figure reflects theCompany's investment in the future of the Eco business. Amortisation is anon-cash item and has no effect on our underlying trading performance. Profit before tax for the year ended 31 March 2007 was £2.4 million, whichincluded discontinued activities and the profit on the Agil disposal (2006: loss£66,741), while the earnings per share were 5.77p (2006: loss 0.135p). Expected Timetable of Principal Events: Publication of the Circular to Shareholders 21 July 2007Latest time and date for receipt of completed Forms 11.00am 12 August 2007of Proxy for the EGMExtraordinary General Meeting 11.00am on 14 August 2007Dealings in new ordinary shares expected to commence 8.00 am on 15 August 2007on AIM For Further Information: Lawrence plc 020 8336 6190Peter Lawrence Nominated Adviser and BrokerCharles Stanley Securities 020 7149 6000Philip DaviesRussell Cook Joint BrokerNomura Code Securities Limited 020 7776 1200Chris Collins This information is provided by RNS The company news service from the London Stock Exchange