Eleco PLC Divestment of Precast Concrete Interests (1465W)
December 20 2013 - 10:16AM
UK Regulatory
TIDMELCO
RNS Number : 1465W
Eleco PLC
20 December 2013
For immediate release
20 December 2013
Eleco plc (AIM: ELCO)
("Eleco")
Divestment of Precast Concrete Interests
Eleco emerges as an international software group
The Board of Eleco announces the sale of certain precast
concrete manufacturing assets to FP McCann Limited ("FP McCann"),
for a total consideration of GBP2,500,000 in cash. FP McCann is a
leading specialist manufacturer of precast concrete products in the
United Kingdom.
As a consequence, Eleco's continuing businesses now consist
solely of its profitable software interests, which are based in the
United Kingdom, Sweden and Germany and in effect Eleco has emerged
as an international construction software specialist.
Sale of certain precast assets to FP McCann
The assets sold to FP McCann are as follows, (i) the business
and assets of Milbury Systems Limited ("Milbury Systems"); (ii) the
freehold land and buildings at Lydney, Gloucestershire, where
Milbury Systems is based; and (iii) the freehold land and buildings
at Grantham, Lincolnshire, where Bell & Webster Concrete
Limited ("Bell & Webster") is based.
Application of proceeds
The proceeds from the sale of these assets have been applied by
Eleco to reduce its bank borrowings.
Recent Performance of ElecoPrecast
Based on audited accounts for the 12 months ended 31 December
2012, turnover of ElecoPrecast was GBP9.06m, of which Milbury
contributed GBP5.87m and Bell & Webster GBP3.19m. The loss
before tax of ElecoPrecast in the period was GBP1.74m, of which
Milbury contributed GBP0.26m and Bell & Webster GBP1.48m.
The total book value of the assets sold as at 31 December 2012
represented GBP6.4m.
Appointment of Administrators to Bell & Webster
John Alexander and John Dickinson of Carter Backer Winter LLP
were today appointed as Administrators of Bell & Webster.
Eleco has been informed that FP McCann approached the
Administrators following their appointment and have now reached
agreement to acquire the business and assets of Bell & Webster
(in administration).
Employees
Eleco has been informed by FP McCann that of the employees of
Milbury Systems and Bell & Webster have transferred to FP
McCann, pursuant to the TUPE regulations, and each employee's
continuity of service, together with all other rights, has been
preserved.
Pension Scheme
Bell & Webster is a statutory employer under the Eleco
Retirement and Benefits Scheme, a defined benefits pension scheme,
which was closed to ongoing service accrual in 2010. The
Administrators are expected to notify the Pension Protection Fund
of the administration, whereupon the Pension Protection Fund will
determine if the Eleco PLC Retirement & Benefits Scheme will
enter into an assessment period to assess the eligibility of its
members for compensation from the Pension Protection Fund.
John Ketteley, Executive Chairman of Eleco commented:
"We are pleased to have found in FP McCann, a highly regarded
and successful precast concrete specialist in the UK and Northern
Ireland, with a breadth of operations and capabilities that will
enable our former precast interests to be integrated into a larger
scale precast business.
"Our skilled and experienced workforce will now become part of
FP McCann's workforce and I would like to thank them for all their
efforts and contribution to Eleco, while they were part of the
Eleco Group. I would also like to thank John Stothard MBA and Carol
Lound for their outstanding leadership and service since they
became respectively Managing Director and Finance Director of
ElecoPrecast in a very difficult market".
"The disposal of our former precast concrete interests
eliminates an activity that had a lack of visibility of future
performance, required major capital investment and generated
substantial losses in recent years in very hostile market
conditions. The divestment also represents the last stage in the
transformation of Eleco from a Group dominated by loss making and
capital intensive construction and building products companies,
into a Group that is now wholly populated by consistently
profitable, cash generative and growing construction software
companies based in the United Kingdom, Sweden and Germany."
"Eleco's software interests have increased their profits in each
of the past 5 years, having written off software development
expenditure as it was incurred. They have also consistently been
strongly cash generative throughout the period. We again expect to
launch a number of new software programs in the year ahead and we
look forward with confidence to 2014."
-ENDS -
For further information
please contact:
Eleco plc http://www.eleco.com
John Ketteley, Executive Tel: 0207 422 0044
Chairman
Peckwater PR
Tarquin Edwards Tel: 07879 458 364 /
0207 808 7340
Cenkos Securities plc
Nicholas Wells (Nomad) Tel: 0207 397 8920
This information is provided by RNS
The company news service from the London Stock Exchange
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