Sale of Legacy

18 Jun 2007 12:10

Air Music & Media Group PLC18 June 2007 18 June 2007 Air Music & Media Group plc ("Air Group") Sale of Legacy Entertainment Inc. The Directors of Air Group, the UK distributor of home entertainment products,are pleased to announce the sale of the non-core operation in Canada, LegacyEntertainment Inc. ("Legacy") to Terry Perusini (the President of Legacy) andMark Frey (Former CEO of Air Group). The sale was completed after the close ofthe market on Friday 15 June 2007. Legacy has been sold for cash consideration of Can$500,000 (£232,000), payableby instalments over nine months. Air Group has indemnified the purchasers forpotential tax liabilities relating to on going investigations for the periods2002 to 2005. The results of Air Group for the year ended 31 March 2007 willinclude a provision of £503,000 (unaudited) for the maximum estimated taxliability. The final tax liability will only be determined after agreement hasbeen reached with the Canadian tax authorities. Air Group has also entered in toa license agreement with Legacy which may result in an income due to Air Groupbased upon Legacy's future sales performance. The Air Group results for the yearto 31 March 2007 will include an asset write down of £312,000 (unaudited) and agoodwill write off of £618,000 (unaudited) in relation to Legacy. The Directorsconsider, having consulted with Seymour Pierce Ltd. as their Nominated Adviser,that the terms of the transaction are fair and reasonable insofar as itsshareholders are concerned. As highlighted in the interim statement and trading update, performance atLegacy had been disappointing in the current year with little prospect forimprovement. Sales for the year to 31 March 2007 were £2.5 million (unaudited)compared to £4.6 million in the previous year. Legacy made a loss before tax andexceptional items of £110,000 (unaudited) for the year to 31 March 2007 comparedto a profit of £678,000 in the previous year. As at 31 March 2007 Legacy had netassets of £232,000 (unaudited). Peter Cowgill, Chairman of Air Group, commented: "The sale of Legacy completesthe strategic actions taken this year by the Board to address Air Group'sunderperforming operations. We closed down our pilot retail operation inSeptember 2006 and earlier this month we absorbed the activity of Air Music andMedia Sales in to our wholesale business, ESD Wholesale. The transparency andkey focus of the business is now significantly improved." --ENDS-- Enquiries: AIR MUSIC & MEDIA GROUP PLC Tel: 0161 767 1620Peter Cowgill, Chairmanwww.airmusicandmedia.com SEYMOUR PIERCE LIMITED Tel: 020 7107 8000Mark Percy BISHOPSGATE COMMUNICATIONS LIMITED Tel: 020 7562 3350Dominic Barretto This information is provided by RNS The company news service from the London Stock Exchange