Dobbies Garden PLC - Placing and Open Offer
March 28 2000 - 2:04AM
UK Regulatory
RNS Number:0107I
Dobbies Garden Centres PLC
28 March 2000
DOBBIES GARDEN CENTRES PLC
PLACING AND OPEN OFFER TO RAISE #10.0 MILLION
WITH ISSUE OF SHARES AT 425P PER SHARE
* Placing and Open Offer to raise #10.0 million (net of expenses)
* Institutional Placing of 1,116,224 shares at 425p per share
* Open Offer of 1,323,776 shares on the basis of 1 for 5 at 425p per
share
* Current year has started well
* Sales to mid-March up 60% with like-for-like up 18.8%
Commenting on the proposed Placing and Open Offer, James Barnes, Managing
Director of Dobbies said:
"This new financing materially strengthens our balance sheet and will
provide a firm foundation for further expansion. We have ambitious
expansion plans which particularly involve further acquisitions and new
building developments."
Enquiries:
James Barnes, Managing Director
Dobbies Garden Centres plc Tel: 0131 663 1941
Frank Malcolm
Bell Lawrie Wise Speke Tel: 0131 225 2566
Bob Gregory
Bell Pottinger Financial Tel: 020 7353 9203
DOBBIES GARDEN CENTRES PLC
("Dobbies" or "the Company")
Dobbies, the Edinburgh based retail garden centre operator, is to raise
approximately #10.0 million (net of expenses) by way of a Placing and Open
Offer of 2,440,000 New Ordinary Shares at 425p per share. The Placing and
Open Offer are conditional on, inter alia, the passing of resolutions at an
Extraordinary General Meeting to be held on 25 April 2000.
Placing and Open Offer
Of the 2,440,000 New Ordinary Shares which are being conditionally placed
by Bell Lawrie Wise Speke, 1,116,224 shares are being placed firm with the
balance of 1,323,776 New Ordinary Shares being placed subject to the right
of Qualifying Shareholders to participate in the issue by the way of the
Open Offer. Under the Open Offer, Qualifying Shareholders will have the
right to subscribe for:
ONE New Ordinary Share for every FIVE Ordinary Shares
held at 17 March 2000, at a price of 425p per share. All the New Ordinary
Shares will be allotted fully paid and will rank pari passu with the
existing issued Ordinary Shares of the Company, including for all future
dividends, but not for the final dividend in respect of the year ended 31
October 1999, due to be paid on 28 April 2000. Application will be made to
the London Stock Exchange for the New Ordinary Shares to be admitted to
AIM. Dealings in the New Ordinary Shares are expected to commence on 3 May
2000.
Current Trading
Dobbies' results for the year to 31 October 1999 were announced on 9
February 2000 and the Annual Report and Accounts were dispatched to
Shareholders on 18 February 2000. Dobbies reported turnover of #15.8
million (1998: #11.1 million), pre-tax profits of #1.95 million (1998: #1.4
million) and earnings per share of 22p (1998: 18.3p). Total dividends paid
and recommended for the year amounted to 5.5p (1998: 5.0p). Like-for-like
sales rose 12.2%, gross margins widened by 0.5% to 45.8% and the net
operating margin rose to 13.5%.
The current year has started well. At the Annual General Meeting on 20
March 2000, the Chairman stated that sales for the period to mid March
2000, were #5.3 million, an increase of over 60% against last year. In the
same period, like-for-like sales were 18.8% ahead. The Board continues to
see no reason why Dobbies should not be able to achieve further improvement
for the financial year to October 2000.
Acquisition of Findlay Clark
Dobbies announced on 6 March 2000 that it had agreed to acquire the
ordinary share capital of Findlay Clark Limited for a cash consideration of
about #6.0 million. In addition, the Company will be refinancing Findlay
Clark's net borrowings, expected to be around #2.84 million at the
completion date, 31 March 2000.
Findlay Clark owns and operates four retail garden centres in Scotland, two
in the Glasgow area, one in Aberdeen and one in Kinross. It also owns a
landscaping business that will not form part of the acquisition.
Dobbies, as enlarged by Findlay Clark, should be able to achieve economies
of scale in terms of central costs, marketing and advertising expenditure
and improved buying margins.
Commenting at the time of announcement, James Barnes, Dobbies' Chief
Executive, said:
"Findlay Clark complements Dobbies' twin-track strategy of acquiring large
garden centres and of reinforcing our regional presence. Each of the
Findlay Clark centres is capable of enlargement through further
development, and culturally and operationally the fit is a good one. The
acquisition expands our presence into two major Scottish cities, Glasgow
and Aberdeen, and gives Dobbies the commanding position in Scotland. With
14 centres, the Group is now the third biggest garden centre operation in
the UK (by number of centres)."
Reasons for the Issue and Use of Net Proceeds
The core of Dobbies' business strategy is the purchase or new build of
retail garden centres with either existing or potential turnover of at
least #3.0 million. Dobbies believes that these larger garden centres,
accommodating 40,000 sq ft or more of covered retail space, offering a wide
range of products, quality catering facilities, demonstration gardens and
ample car parking, are best placed to serve the needs of the modern
consumer of garden and garden related products.
In pursuit of this strategy, and since its Ordinary Shares became quoted on
AIM in March 1997, Dobbies has:
- acquired in August 1997 Clovergate Limited, the owner and operator of
a garden centre at Gailey in Staffordshire;
- developed and opened in March 1999, a completely new garden centre at
Monifieth, near Dundee;
- acquired in March 1999, E. J. Bayley & Sons (Shrewsbury) Limited, the
owner and operator of two garden centres in Shropshire;
- continued to invest in the further development of its garden centres
including those at Gailey in Staffordshire and Edinburgh; and
- agreed to acquire Findlay Clark on 31 March 2000.
Dobbies has financed its acquisitions and capital expenditure through a
combination of internal cash flow, bank borrowings and approximately #8.0
million raised from three share placings, in March 1997, August 1997 and
March 1998.
At 31 October 1999, the date of Dobbies' last audited accounts,
Shareholders' funds stood at #13.0 million compared to net debt of #5.0
million. This figure will increase following the proposed acquisition of
Findlay Clark, as the cash consideration payable for the ordinary shares
and the refinancing of Findlay Clark's debt will be met from Dobbies'
existing borrowing facilities.
Dobbies nonetheless has ambitious expansion plans which particularly
involve further acquisitions and new building developments. Dobbies' board
believes that it is vital that the Company can negotiate strategic
acquisitions in the full knowledge that it has not only the necessary
banking facilities but also a strong foundation of equity finance in its
balance sheet. The Board is therefore proposing the Placing and Open
Offer.
Further Information
A Circular setting out details of the Placing and Open Offer and containing
the notice of the Extraordinary General Meeting together with a
recommendation from the Board to vote in favour of the resolutions to be
proposed at the EGM will be despatched later today. The Circular will be
accompanied by an application form in respect of the Open Offer, (which may
not be split or transferred except to satisfy bona fide market claims) and
a form of proxy for use at the EGM. The latest time and date for receipt
of completed application forms and payment in full under the Open Offer is
3.00pm on 20 April 2000. The latest time and date for the splitting of
application forms is 3.00pm on 18 April 2000. Application Forms are
personal to shareholders and may not be transferred except to satisfy bona
fide market claims.
Copies of the Circular will be available from Bell Lawrie Wise Speke, 7
Drumsheugh Gardens, Edinburgh, EH3 7QH.
END
MSCJRMMTMMITTPM
Dobbies Garden Centres (LSE:DGC)
Historical Stock Chart
From Jun 2024 to Jul 2024
Dobbies Garden Centres (LSE:DGC)
Historical Stock Chart
From Jul 2023 to Jul 2024
