2 December 2004
The Creative Education Corporation Plc
("Creative" or "Company")
ACQUISITION AND PLACING
HIGHLIGHTS
* Conditional recommended offer for Academy Childcare Group Plc
* Conditional placing by Corporate Synergy Plc to raise �5 million (before
expenses) at 5p per ordinary share
* Board changes
* Preliminary statement of results for the period ended 31 July 2004
Chris Phillips, Creative Chairman, commented,
"The acquisition of Academy Childcare Group will be the first significant step
for Creative towards becoming the UK's principal quoted consolidator in the
nursery school sector, taking the Group to nearly two times the size of its
existing operations. We believe that our strategy to consolidate the smaller
operators will result in greater economies of scale and higher revenues per
unit based on high quality service.
I am delighted that a number of distinguished investors have recognised the
potential for Creative Education and its strategy and have supported this
placing."
Enquiries:
David Alexander
Creative Education Corporation Plc
020 8864 5147
Adam Reynolds
Hansard Communications
020 7245 1100
Olly Cairns
Corporate Synergy Plc
020 7626 2244
Terms defined in the Offer Document have the same meaning in this announcement.
Corporate Synergy Plc, which is authorised and regulated by the Financial
Services Authority, is acting as nominated adviser and broker to the Company in
connection with the proposed placing, offer and admission and will not be
responsible to anyone other than the Company for providing the protections
afforded to customers of Corporate Synergy Plc or for providing advice in
relation to the Offer.
This announcement does not constitute an offer to sell or invitation to
purchase any shares or the solicitation of any vote or approval in any
jurisdiction. The release, publication or distribution of this announcement in
certain jurisdictions may be restricted by law and therefore persons in such
jurisdictions into which this announcement is released, published or
distributed should inform themselves about and observe such restrictions.
INTRODUCTION
Creative is pleased to announce that it has today made a conditional
recommended offer to acquire the entire issued share capital of Academy
Childcare Group Plc ("Academy"), other than those Academy shares it already
holds ("the Offer"), for a total consideration of �1.55 million to be satisfied
by the issue of up to 30,912,203 new Creative shares at 5p in cash for every
Academy share provided such cash is used to subscribe for new Creative shares
at 5p per share. The cash alternative option is being offered to Academy
Shareholders who wish to claim tax relief under the Enterprise Investment
Scheme in respect of those new Creative Shares.
The Offer values each Academy share at 5p and the current issued share capital
of Academy at approximately �2.18 million in aggregate. Creative will finance
the cash element of the Offer through the proceeds of the Placing. Further
details of the Offer are set out in the announcement of the Offer being made
today by Creative and in the formal offer document being sent to Academy
Shareholders today.
In order to enable the Company to take advantage of the consolidation
opportunity in the childcare nursery sector, to fund the cash alternative of
the Offer and to provide additional working capital for the enlarged group to
pursue its future strategy, the Company is seeking to raise approximately �5
million (before expenses) by way of a placing by Corporate Synergy Plc of
100,000,000 new ordinary shares with institutional and other investors at 5p
per share ("the Placing"). The Placing has not been underwritten and is
conditional on Admission.
The Company has today announced it preliminary results for the period ended 31
July 2004, which are set out in Appendix 1 to this announcement.
BACKGROUND TO AND REASONS FOR THE OFFER
Creative currently operates 14 nurseries and one pre-prep school in South East
England under the trading names Primary Steps and Happy House. The acquisition
of Academy will take the total number of Creative operating units to 29,
comprising 27 nurseries, one pre-prep school and one cr�che. The Directors
believe that the proposed acquisition of Academy will provide the enlarged
group with the first significant step in becoming the principal quoted
consolidator in the UK nursery school sector. The Directors believe that the
proposed acquisition of Academy will enable the enlarged group to have the
benefit of Academy's operational contribution whilst eliminating significant
head office costs currently being paid by Academy, as Academy's operations can
largely be supported by Creative's current head office structure. In addition
the Directors also believe significant short and medium term improvement in
Academy's operational performance can be achieved.
The nursery school sector is highly fragmented and most private sector
nurseries are operated by sole traders or small private companies, with the
largest single operator having less than two per cent. of the market. The
Directors believe the 20 largest childcare nursery operators have less than ten
per cent. of the market and that, due to this fragmentation, there is an
opportunity for significant consolidation in the industry.
Creative's policy to achieve consolidation and further growth is principally to
acquire groups of small nurseries. The Directors believe they can consolidate
the turnover from acquired businesses without taking on significant additional
head office costs.
The Company is therefore making the Offer and undertaking the Placing for the
following reasons:
* the enlarged group will be nearly three times the size of Creative's
existing operations and yet the Directors believe that it can operate
largely with Creative's current head office structure and cost, thus
bringing economies of scale by way of consolidation and achieving critical
mass and eliminating the attributable head office overhead associated with
individual nursery groups;
* Academy has an arrangement with Next Generation Clubs Limited ("Next
Generation") that grants Academy rights of first refusal to establish
nursery units at new openings of Next Generation clubs in England and
Wales. The Directors see Academy's agreement with Next Generation to open
and operate nurseries in its fitness clubs, as an opportunity to expand its
childcare network throughout the UK;
* the Directors believe that the funds from the Placing available to the
enlarged group will enable them to further actively consolidate the nursery
school sector by acquisition and seek to take the benefit of operating
contribution without the overheads associated with head office operations.
The Directors believe that Creative's existing head office structure can
manage up to 50 operating units without significant expansion;
* the Directors believe Creative's operating format will improve child
occupancy levels and increase the operating performances at unit level; and
* all of Academy's operating units are fitted to purpose and the Directors
believe that they are located to suit its target market of working parents.
The Directors believe that a combination of acquiring Academy and the Placing
will provide a significant platform from which to build a substantial group of
nursery schools in the UK and that the Enlarged Group will be one of the top
ten largest operators of day nurseries in the United Kingdom, with more than
1,600 full time places.
INFORMATION ON ACADEMY
Academy Limited was founded in 1999 and provides childcare services to children
aged from 3 months to 8 years.
Since 1999 the Academy group has concentrated on expanding its chain of
nurseries and currently owns and operates 12 nurseries, 1 children's cr�che
facility and has a further nursery (the Carlton Club) under its management.
There are currently over 300 childcare staff and managers employed by Academy
in its nurseries, cr�che and at head office. Each nursery or cr�che has a
manager and the adult:child ratios are in accordance with childcare
regulations.
In October 2003 Academy entered into a CVA due to an inability to raise
sufficient funds to meet working capital needs. This was concluded in April
2004.
The nurseries
The Directors believe that Academy's sites are located in areas where there are
significant populations with planned housing growth and that its nursery sites
enjoy good access to transport, particularly main roads and motorways which
makes life easier for their customers. The Directors believe that the Next
Generation clubs, are situated in areas where the demographics favour fitness
clubs and that such demographics are, in general, similar to those needed to
obtain a suitable catchment area to operate a successful nursery operation.
Academy currently operates in the following areas and provides 1,107 full time
places:
Nursery and location Tenure Maximum No of
places
Kings Hill, Kent Freehold 98
Guildford, Surrey Freehold 129
Ashford, Kent Leasehold 125
Bluewater Park, Kent Leasehold 116
Next Generation Brierley Hill, West Leasehold 68
Midlands
Next Generation Southmead, Bristol Leasehold 44
Chichester, West Sussex Leasehold 126
Next Generation Cambridge Leasehold 42
Next Generation Carlton Club, Maida Managed 15
Vale
Next Generation Chorley, Lancashire Leasehold 64
Next Generation Dartford, Kent Leasehold 48
Next Generation Ipswich, Suffolk Leasehold 60
Next Generation York, North Yorkshire Leasehold 68
Cr�che
Bluewater Cr�che Leasehold 104
At present, the average occupancy rate of Academy nurseries is approximately 43
per cent. based on the number of full time equivalent nursery places being
filled as at 31 October 2004. The Directors believe this low occupancy rate
gives scope for significant improvement in operational performance. To bring
Academy's larger nurseries in line with Creative strategy they intend to reduce
the size of Academy's larger nurseries to a maximum of 80 places.
Next Generation
Next Generation provides quality clubs offering health, leisure and fitness
facilities. Academy has an arrangement with Next Generation that grants Academy
rights of first refusal to establish nursery units at new openings of Next
Generation's clubs in England and Wales. This arrangement will continue with
Creative following completion of the Offer.
The relationship with Next Generation has provided Academy with potential sites
for nursery units. Academy nursery units are located ahead of the health club
turnstile, so parents wishing to put their children into its nurseries need not
be members of the club.
Financial Information on Academy
The following information has been extracted, without adjustment, from the
audited accounts of Academy for the periods ended 31 March 2004:
Period ended Period ended Year ended
30 June 2002 31 March 2003 31 March 2004
�'000 �'000 �'000
Audited Audited Audited
Turnover 2,042 2,408 3,715
Gross profit 708 789 1,321
Operating loss (835) (668) (2,260)
Profit/(loss) on ordinary (903) (746) 312
activities before taxation
DETAILS OF THE PLACING
The Company is proposing to raise �5 million (before expenses) by way of a
conditional placing of 100,000,000 new Ordinary Shares ("Placing Shares") by
Corporate Synergy Plc. The Placing Shares will rank pari passu in all respects
with the existing Ordinary Shares including the right to receive any and all
dividends or other distributions and issues declared, made or paid on the
Ordinary Shares after Admission. The Placing has not been underwritten.
Conduit Square Limited, a company controlled by Laurence Davis intends to
subscribe for 5,000,000 Placing Shares pursuant to the Placing. In addition,
Gillian Lumsdon intends to subscribe for 80,000 Placing Shares pursuant to the
Placing.
USE OF PROCEEDS
The net proceeds of the Placing receivable by the Company are estimated to be
approximately �4.32 million. The Company intends to apply these funds towards:
* payment of the cash element of the Offer;
* repayment and redemption of loans and loan notes in the Company and
Academy;
* refurbishment costs of existing and Academy nurseries;
* acquisition of further childcare nurseries (and associated integration
costs); and
* provision of working capital.
FUTURE STRATEGY
The Directors' principal objective is to operate a group of quality nurseries
that makes the enlarged group the nursery provider of choice within each
community that it operates. The Directors believe that there is scope for
consolidation and there is potential for further acquisitions to be made
thereby increasing the size of the business, enhancing market penetration, and
building a higher awareness of the `Creative' brand and services.
As part of its future strategy Creative intends to:
* Consolidate within the sector
The Directors intend to acquire further small groups of operating nurseries and
integrate them into the enlarged group thereby achieving critical mass and
eliminating the attributable head office overhead associated with individual
nursery groups.
The Directors are continuously investigating other acquisition opportunities
that may lead to further acquisitions and are already negotiating terms to
acquire 2 childcare companies with 13 nurseries between them.
* Increase its occupancy rate
The Directors intend to increase the occupancy rates of its and Academy's
nurseries.
* Reduce overheads
The Directors have identified a number of opportunities to reduce costs and
achieve higher margins in Academy's operations which will reduce the losses and
enhance the profitability of those nurseries in future.
* New nurseries
In addition to acquiring existing nurseries, the Directors intend to open new
nurseries. These nurseries will be branded to Primary Steps specifications. It
is intended that not more than 25 per cent. of additional nurseries opened or
acquired will be new build due to the lead time to profitability.
* Sector advantage
Through continuous expansion throughout the UK, Creative aims to become the
nursery provider of choice for all parents. The Directors intend to implement
this through:
* consistent quality of service;
* training, recruitment and retention of highly skilled staff;
* investment in education and training; and
* comprehensive marketing and presentation campaigns to reinforce its
reputation and presence within each community.
BOARD CHANGES
Raymond Harris, James Sterling and John Baker have today resigned from the
Board but will continue to be employed by the Company on an operating board.
They will be responsible for the day to day operations of the Group and will
report to the enlarged board on a monthly basis.
Laurence Davis has been appointed executive deputy chairman and Adam Davis has
joined the board as a non-executive director.
ADMISSION TO AIM
Application will be made to the London Stock Exchange for the Enlarged Share
Capital which will include the new Creative shares issued pursuant to the Offer
to be admitted to trading on AIM. Admission is expected to become effective and
trading to commence on 30 December 2004.
ORDERLY MARKET ARRANGEMENTS
At Admission, Laurence Davis, David Alexander, Rakesh Patel and Gillian Lumsdon
will be interested in an aggregate of 46,521,468 Ordinary Shares, representing
15.3 per cent. of the Enlarged Share Capital.
Each of Laurence Davis, David Alexander, Rakesh Patel and Gillian Lumsdon has
undertaken to Corporate Synergy and to the Company not to sell nor to dispose
of any of their Ordinary Shares other than through the Company's broker from
time to time (subject to certain limited exceptions), for a period of twelve
months from Admission.
DOCUMENTS
An AIM admission document comprising a prospectus and offer document giving
details of the Offer and the Placing and convening an Extraordinary General
Meeting, and a relative Form of Acceptance, is expected to be posted to
shareholders today. Copies of the AIM admission document and offer document are
available free of charge, from the offices of Fladgate Fielder, 25 North Row,
London W1K 6DJ from the date of this announcement until one month from the date
of Admission. Forms of acceptance should be completed and returned as soon as
possible but, in any event, so as to be received not later than 3.00 pm on 23
December 2004.
OUTLINE TIMETABLE
First closing date of the Offer 23 December 2004
Latest time and date for receipt of the form of 10:00 a.m. on 24 December 2004
proxy relating to the EGM
Extraordinary General Meeting 10:00 a.m. on 29 December 2004
Admission effective and dealings commence on 30 December 2004
AIM in the new Ordinary Shares
CREST account credited 30 December 2004
Share certificates in respect of Placing Shares 06 January 2005
to be dispatched by
NOTES TO EDITORS
Adam Davis is a practicing barrister who specialises almost exclusively in the
area of serious fraud and has been a criminal defence barrister for the past 18
years. He is also a member of the South-East Circuit Committee, the Bar Council
Disability Committee, the Panel of Barristers to represent Commonwealth Death
Penalty Cases and is a lecturer accredited with the Law Society and Bar Council
on the Proceeds of Crime Act 2002.
Current directorships
None
Past directorships
None
On 8 October 2004 the Bar Council Disciplinary Tribunal found that Adam Davis
had failed to comply with the barristers' Code of Conduct and Pupillage
Guidelines in that he failed properly to supervise his pupil barrister. No
further action has been taken. This finding is subject to appeal.
There are no further disclosures required to be made in respect of Mr Davis
with regard to paragraph (f) of Schedule 2 of the AIM Rules.
The Board of Creative now comprises the following:
Christopher Phillips, aged 54, non-executive chairman
Laurence Davis, aged 43, executive deputy chairman
David Alexander, aged 41, chief executive officer
Rakesh Patel, aged 41, finance director
Gillian Lumsdon, aged 62, non-executive director
Adam Davis, aged 41, non-executive director
APPENDIX 1
CREATIVE EDUCATION CORPORATION PLC
Preliminary Statement of results for the period ended 31 July 2004
Chairman's statement
For the eleven months to 31st July 2004 the company made a trading loss before
taxation of �1,338,555 against �576,795 for the year to 31st August 2003. This
loss equated to a loss in earnings per share of 0.85p against a loss of 0.49p
for the year to 31st August 2003. At the end of the financial year net assets
were �4,774,578. The loss for the trading period reflects the development and
expansion of the business and the creation of operational and financial
systems, which will enable the Corporation to expand without incurring
significant central overheads.
During the financial year the number of nurseries operating under the Primary
Steps brand increased from 7 to 12. The company also expanded and increased the
number of places at East Sheen and Hemel Hempstead which also provided an
opportunity to enhance the facilities for the children at both of these units.
Under the leadership of David Alexander, we have also worked hard to provide
the best environment for our children to develop their learning and social
skills while attending one of our nurseries. We have also worked hard on
expanding the quality and range of services offered to the children and their
parents and guardians. To this end, we have appointed one of our non-executive
directors Gillian Lumsdon to act as the group educational advisor, to give
advice on the educational services your company provides and look at ways that
new innovations can be introduced to improve the quality and range of our
service.
A major development during the year was the acquisition of a 21.88% interest in
the ordinary share capital of Academy Childcare Group Plc. After the year end
this holding was increased to 29.2% and your company also acquired �400,000 of
secured convertible loan notes. Given the size and commitment of your group to
this associate, we have been represented on the Academy board since December
2003 by Laurence Davis. Following the year end he has been joined by David
Alexander and Ray Harris. Although this company is currently trading
unprofitably, your directors view this investment as a springboard to further
expansion in the nursery and training sectors of the UK educational market.
Since the year end your company has made a recommended offer of 5p per share
for the remainder of the ordinary shares in Academy and has also completed the
acquisition of Happy House. These new acquisitions should enable your company
to reap the benefits of the major investment in systems made over the first two
years of operations.
I believe the future prospects for your company look extremely encouraging as
your company continues to grow by acquisition and increasing the occupancy
levels in its existing nurseries. The greatest asset in our business is our
management team and staff who continue to provide a high quality good value
service. I would like to thank them and all of our suppliers and contractors
for their continued support over the past eleven months.
The directors do not recommend payment of a dividend.
Chris Phillips
Chairman
1 December 2004
GROUP PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 31 JULY 2004
Period Year
ended ended
31 July 31 August
2004 2003
� �
Turnover 1,927,096 318,042
Administrative expenses (2,963,672) (894,273)
******* *******
Operating loss (1,036,576) (576,231)
Share of operating loss in (299,076) -
associated undertaking
Other Income 2,542 -
--
Interest payable and similar (5,445) (564)
charges
******* *******
Loss on ordinary activities (1,338,555) (576,795)
before taxation
Tax on loss on ordinary - -
activities
******* *******
Loss on ordinary activities (1,338,555) (576,795)
after taxation
Accumulated loss brought forward (611,975) (35,180)
Transfers from merger reserve 289,229 -
******* *******
Accumulated loss carried forward (1,661,301) (611,975)
******* *******
Loss per share
- Basic (0.85) p (0.49) p
******* *******
- Diluted (0.85) p (0.49) p
******* *******
The profit and loss account has been prepared on the basis that all operations
are continuing operations.
There are no recognised gains and losses other than those passing through the
profit and loss account.
BALANCE SHEET
AS AT 31 JULY 2004
Group & Company
As at As at 31
August
31 July
2004 2003
� �
Fixed assets
Intangible assets 4,050,204 4,249,097
Tangible assets 682,430 454,807
Investments
Investments in associate 78,160 -
Investments in subsidiary - -
******* *******
4,810,794 4,703,904
******* *******
Current assets
Debtors 313,773 74,268
Cash at bank and in hand 145,247 42,029
******* *******
459,020 116,297
Creditors: amounts falling due (495,236) (1,053,903)
within one year
******* *******
Net current liabilities (36,216) (937,606)
******* *******
Total assets less current liabilities 4,774,578 3,766,298
******* *******
Capital and reserves
Called up share capital 1,659,762 1,171,766
Share premium account 2,265,346 406,507
Merger reserve 2,510,771 2,800,000
Profit and loss account (1,661,301) (611,975)
******* *******
Shareholders' funds - equity 4,774,578 3,766,298
interests
******* *******
GROUP CASH FLOW STATEMENT
FOR THE PERIOD ENDED 31 JULY 2004
Period ended 31 July Year ended 31 August
2004 2003
� � � �
Net cash outflow from (1,382,507) (615,970)
operating activities
Returns on investments and servicing of finance
Interest paid (5,445) (564)
Interest received 2,542 -
******* *******
Net cash outflow from returns on (2,903) (564)
investments
and servicing of finance
Capital expenditure and financial investment
Payments to acquire tangible (281,667) (137,113)
fixed assets
Payments to acquire - (52,090)
subsidiary
Payments to acquire associated (377,236) -
undertaking
Net overdrafts acquired with - (156,583)
subsidiary
Receipts from sales of tangible - 1,864
fixed assets
******* *******
Net cash outflow from capital expenditure (658,903) (343,922)
and
financial investment
******* *******
Net cash outflow before financing (2,044,313) (960,456)
Financing
Issue of ordinary share capital 2,439,980 770,000
Cost of share issue (93,145) (171,077)
******* *******
Net cash inflow from 2,346,835 598,923
financing
******* *******
Increase/(decrease) in cash 302,522 (361,533)
******* *******
Accounting policies
Basis of preparation
The accounts have been prepared under the historical cost convention and on a
going concern basis.
Compliance with accounting standards
The accounts have been prepared in accordance with applicable accounting
standards.
Basis of consolidation
The consolidated profit and loss account and balance sheet include the accounts
of the company and of its subsidiary undertaking, Primary Steps Limited, made
up to 31 July 2004. The results of subsidiaries sold or acquired are included
in the profit and loss account up to, or from, the date control passes.
Intra-group sales and profits are eliminated fully on consolidation.
In addition the consolidated accounts of the company include its share of the
loss made by its associated undertaking, Academy Childcare Group Plc, from the
date of acquisition to 31 July 2004.
Turnover
Turnover represents the invoiced value of services provided net of VAT.
Goodwill
Goodwill is amortised over its useful economic life currently estimated to be
20 years.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is
provided on all tangible fixed assets at rates calculated to write off the cost
less estimated residual value of each asset over its expected useful life, as
follows:
Leasehold property Over the period of the lease
Fixtures, fittings & equipment 20% - 33.3% straight line
Leasing
Rental payments under operating leases are charged to the profit and loss
account on a straight line basis over the period of the lease.
Deferred taxation
Deferred tax is provided in full on timing differences which result in an
obligation at the balance sheet date to pay more tax, or a right to pay less
tax, at a future date, at rates expected to apply when they crystallise based
on current tax rates and law. Timing differences arise from the inclusion of
items of income and expenditure in taxation computations in periods different
from those in which they are included in the accounts. Deferred tax is not
provided on timing differences arising from the revaluation of fixed assets
where there is no commitment to sell the assets. Deferred tax assets are
recognised to the extent that it is regarded as more likely than not that they
will be recovered. Deferred tax assets and liabilities are not discounted.
Earnings per share
The calculation of the basic earnings per share and diluted earnings per
share is based on the loss attributable to ordinary shareholders of �
1,338,555 (2003: Loss �576,795), divided by the weighted average number of
shares in issue during the year.
The weighted average number of shares used on the calculations are set out
below:
Period Year ended
ended 31 31 August
July 2004 2003
Number of Number of
Shares shares
156,773,501 117,176,560
******* *******
Related party transactions
Leases;
During the period the company was charged rent by Conduit Square Limited, a
company in which L Davis and J Baker are directors and shareholders, in
respect of the leases on the following properties:
Primary Steps Bedford �69,097 (2003: �nil)
Primary Steps Hemel Hempstead �22,000 (2003: �nil)
Primary Steps Ilford �239,919 (2003: �nil)
Primary Steps Milton Keynes �52,500 (2003: �21,875)
Also during the period the company was charged �64,167 (2003: �4,583) for the
lease of Primary Steps East Sheen by Iron Founders & Allied Trade Nominees
Limited, a company in which J. Baker is a director and sole shareholder
Other transactions;
During the period �11,750 was paid to Adler Shine LLP, of which R Patel is a
partner and R Harris a consultant, in respect of professional fees relating to
diligence reviews.
Conversion of loans;
On 25 September 2003 J Baker Consultancy, a company in which J Baker (a
director) has a controlling interest, converted a loan of �130,000 included
within Directors' current accounts to 2,600,000 Ordinary Shares of 1 pence at
a conversion price of 5 pence per share. J Baker Consultancy was owed �15,000
(2003: �84,000) at the period end.
On 25 September 2003, a loan of �205,000 included within Directors' current
accounts from Shortlands Investments Limited, a company in which L Davis (a
director) has a controlling interest, was converted into 4,100,000 Ordinary
Shares of 1 pence at a conversion price of 5 pence per share. Shortlands
Investments Limited was owed �35,000 (2003: �205,000) at the period end.
Directors' current accounts;
The following balances were outstanding at the period end, included in
"Directors' current accounts":
Shortlands Investments Limited �35,000 (2003: �205,000)
J Baker Consultancy �15,000 (2003: �84,000)
J Baker �nil (2003: �60,000)
In addition as at 31 July 2004 the Company owed Conduit Square Limited, a
company in which John Baker and Laurence Davis have a controlling interest, �
120,000.
Post Balance Sheet Events
Group and company
Subsequent to the year end the company acquired for cash a further 7.32%
interest in Academy Childcare Group Plc. As a result the total interest in
Academy Childcare Group Plc increased to 29.2%.
On 24 September 2004, the Company announced the acquisition of �400,000 secured
convertible loan notes in Academy Childcare Group Plc from Lightning Star
Limited and others for a consideration of �645,875 to be satisfied by the issue
of new unsecured convertible loan notes totalling �400,000 and the allotment of
4,800,000 new ordinary shares credited as fully paid at 5p per share and �5,875
in cash in the company..
The Academy Childcare Group Plc Loan Notes are repayable on or before 31
December 2005 and are convertible in whole or in part, at the holders option
only, into new ordinary shares in Academy, up to 31 December 2004 at 5p per
share, on or after 1 January 2005 at 1p per share or, in the event that a
conversion event has occurred prior to conversion, at 39% discount to the price
at which a conversion event occurred.
On 29 July 2004, the Company announced that it exchanged contracts to acquire
the business, assets and certain liabilities of the partnership, trading as
Happy House Educational Care. The completion of the acquisition is expected to
take place on 29 October 2004 and is conditional on written consents, orders,
clearances, authorisations or exemptions under and in respect of landlords'
consent to assign the properties and re-registration with OFSTED being
obtained. The net consideration is �657,000, comprised of �557,000 in cash and
�100,000 in shares to be adjusted for net assets or liabilities at completion.
FINANCIAL INFORMATION
The financial information contained in this preliminary announcement of audited
results does not constitute the group's statutory accounts for the period ended
31 July 2004. The financial information has been prepared using consistent
financial policies. The accounts for the year ended 31 July 2004 will be
delivered to the Registrar of Companies.
The statutory accounts for the period ended 31 July 2004 have been reported on
by the company's auditors; the reports on these accounts were unqualified and
they did not contain a statement under section 237(2) or (3) of the Companies
Act 1985.
Copies of the full statutory accounts will be despatched to shareholders in due
course. Copies of this announcement and the full statutory accounts will be
available, free of charge, from the registered office of the company at Aston
House, Cornwall Avenue, London N3 1LF, and from the offices of the Company's
nominated adviser, Corporate Synergy Plc at 12, Nicholas Lane, London EC4N 7BN.
END
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