TIDMTRAF
RNS Number : 9814G
Trafalgar Property Group PLC
21 November 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION (EU) 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE
UNITED KINGDOM BY VIRTUE OF THE EU (WITHDRAWAL) ACT 2018.
TRAFALGAR PROPERTY GROUP PLC
("Trafalgar", the "Company" or "Group")
Proposed Acquisition of Hydroponics R&D Facility, Notice of
General Meeting and Trading Update
Trafalgar (AIM:TRAF), the AIM quoted residential and assisted
living property developer, announces that a conditional agreement
has been entered into with May Barn Horticultural Consultancy
Limited ("May Barn") for the acquisition of assets and leasehold
premises comprising a hydroponic research and development facility,
for a cash consideration of GBP30,000 (the "Acquisition"). No
profits (or losses) are attributable to these assets.
Paul Treadaway, Managing Director of Trafalgar, commented:
"The acquisition of this dedicated research and development site
is a step in the Company's plans to facilitate its vertical
hydroponics strategy, with opportunities for research relevant to
food, cosmetic and pharmaceutical products.
This is an exciting development for the Company and I look
forward to being able to update shareholders further in due
course."
As May Barn is controlled by Dr Paul Challinor, a director of
the Company, the Acquisition, and the grant of a lease over the
premises are related party transactions under AIM Rule 13, and the
Acquisition is also conditional upon the approval of shareholders
in general meeting as required under section 190 of the Companies
Act 2006.
Trading Update
Trafalgar is pleased to report that its residential property
activities have continued to progress during 2022. In particular,
it has received outline planning permission for a private
residential scheme in Leatherhead Surrey, where it has an option to
purchase the land.
Posting of Circular and Notice of General Meeting
The Acquisition is conditional on the passing by Shareholders of
the resolution at a General Meeting of the Company, which is to be
held at 10:00am. on 8 December 2022 at Chequers Hill, Bough Beech,
Edenbridge, Kent TN8 7PD. The notice convening the General Meeting
is set out in the Circular which has been posted to Shareholders
together with a form of proxy for the General Meeting. The Circular
will be available on the Company's website at
www.trafalgarproperty.group . The Letter from the Chairman has been
extracted and is set out below:
1. Introduction
In March 2020, the Company announced that it intended to deliver
value to shareholders through exploring hydroponics ventures which
leverage off the Company's property development expertise alongside
its property development business. The Company strengthened the
resources of the Board with the appointments of Gary Thorneycroft
in November 2020 and Dr Paul Challinor in May 2022. Paul has been
reviewing opportunities in the hydroponic and vertical farming
areas.
It has become apparent that, in addition to food production,
there are a number of opportunities to grow various plants for use
in cosmetic and pharmaceutical products, and that there are
opportunities for further research to improve knowledge of plant
structures and the capabilities of indoor farming to produce food,
cosmetic and pharmaceutical products.
The Directors believe that establishing a dedicated in-house
research and development facility fitted out with up to date
technology will provide a good base to undertake such activities
both for the Company and on behalf of third parties, including work
carried out alongside third parties.
As announced on 21 November 2022, Life Hydroponic Assets Limited
(a newly incorporated subsidiary of the Company) has entered into a
conditional agreement with May Barn for the acquisition of assets
and leasehold premises comprising a hydroponic research and
development facility, for a cash consideration of GBP30,000
(including vat). May Barn was founded by Dr Challinor in 2011, and
provides horticultural consultancy services. The Facility has been
established by May Barn and is suitable for growing a range of
micro-greens, allowing detailed work on plant propagation
requirements and initial studies on tissue culture of plant
material to be carried out. Plant types and varieties can be tested
in the Facility to determine suitability for commercial production
using a range of hydroponic systems. The Facility is considered to
be well suited to the testing of research-generated ideas in
readiness for commercial scaling-up, using the flexibility provided
by the space in the Facility and the size of the bench trays.
As May Barn is controlled by Dr Challinor, a director of the
Company, the Acquisition and the grant of a lease over the premises
are related party transactions under AIM Rule 13, and the
Acquisition is also conditional upon the approval of shareholders
in general meeting as required under section 190 of the Companies
Act 2006.
A General Meeting of the Company is to be held at 10.00 a.m. on
8 December 2022 at Chequers Barn, Chequers Hill, Bough Beech,
Edenbridge, Kent TN8 7PD to approve the Acquisition. Formal notice
of the General Meeting is set out at the end of this document.
2. Further details of the Facility
The research and development facility is situated in Nantwich,
Cheshire in a dedicated insulated air conditioned building of
approximately 900 sq ft, which is equipped with 16 Staal and Plast
"Ebb and Flow" irrigation bench trays, each of which is 3.2m long
and 1.5m wide, mounted on Unistrut support racking four tiers in
height. Fully automated lighting and irrigation systems are
installed, including Phillips dr/w 120 LED grow lights. The
lighting systems were updated in 2020 by the addition of a range of
new LED luminaires from Current by GE, Valoya, and
Heliospectra.
The Facility will provide an in-house horticultural and
hydroponic research and development capability to the Company under
the direction of Dr Challinor.
At present, the Facility is being used by May Barn to monitor
the growth characteristics of two new multi-leaf lettuce varieties,
which have been specifically developed for use under controlled
environment conditions. This work will allow the correct selection
of leafy plant varieties for future supply to specific food market
and supermarket outlets.
In addition, the Facility is being used for the Company to
demonstrate the capabilities of the Facility to interested third
parties:
-- Hydroponic tomato seedlings are being raised to enable plant
density and potential plant leaf yield information to be recorded,
in readiness for future work on the production of vitamins.
-- Seedlings of Nicotiana benthamiana are being grown in
rockwool (a hydroponic substrate), to monitor growth and
development of the plants in readiness for future work on the
formulation of plant proteins in leaf tissue for cosmetics and
pharmaceutical preparations.
3. Further details of the Acquisition
The Company has conditionally agreed to acquire (through a newly
formed subsidiary, Life Hydroponic Assets Limited) the Facility's
equipment and fixtures and fittings for a consideration of
GBP30,000 (including vat), to be satisfied in cash on completion.
The Company intends to maintain the Facility at the Nantwich site.
The Acquisition Agreement provides that a lease over the premises
occupied by the Facility will be granted to LHA for a five year
period (terminable by either party on six months' notice) at an
annual rent of GBP6,000.
The Independent Directors consider that the Acquisition presents
an opportunity for the Company to establish a research and
development facility at a significant saving in time and cost, as
the Facility is already established and operating in situ to Dr
Challinor's specifications and under his direction. The
consideration is less than the original cost of the equipment
proposed to be acquired, and is considered to be significantly less
than it would cost to purchase and set up new equipment in (and fit
out) new premises. The Independent Directors consider that the rent
for the premises is in line with rents for similar premises in the
local area.
As the Acquisition is from a company controlled by Dr Challinor,
being a Director of the Company, as the new lease will be granted
by Dr Challinor (and his wife, Mrs D. Challinor), and as the assets
being acquired comprise "substantial non-cash assets" for the
purposes of the Companies Act 2006, the Acquisition is conditional
upon the approval of Shareholders of the Company in general meeting
as required by section 190 of the Companies Act 2006.
4. Trading Update
Trafalgar is pleased to report that its residential property
activities have continued to progress during 2022. In particular,
it has received outline planning permission for a private
residential scheme in Leatherhead Surrey, where it has an option to
purchase the land.
5. Related Party Transaction
As Dr Challinor is a Director of the Company, the Acquisition
and the grant of the lease also comprise related party transactions
under Rule 13 of the AIM Rules. The Independent Directors (being
all the directors of the Company excluding Dr Challinor), having
consulted with SPARK, the Company's nominated adviser, consider the
Acquisition Agreement and the terms of the lease to be fair and
reasonable insofar as the Company's Shareholders are concerned.
6. General Meeting
At the end of this Circular is a notice convening a General
Meeting of the Company to be held at Chequers Barn, Chequers Hill,
Bough Beech, Edenbridge, Kent TN8 7PD at 10.00 a.m. on 8 December
2022, at which the Resolution will be proposed as an ordinary
resolution to approve the Acquisition and grant of the lease.
7. Action to be taken
Shareholders will find a form of proxy enclosed for use at the
General Meeting. Whether or not you intend to be present at the
meeting, you are requested to complete and return the form of proxy
in accordance with the instructions printed thereon as soon as
possible. To be valid, completed forms of proxy must be received by
the Company's Registrars, Neville Registrars Limited, Neville
House, Steelpark Road, Halesowen, West Midlands B62 8HD, not later
than two business days before the time appointed for holding the
General Meeting.
You are entitled to appoint a proxy to attend and to exercise
all or any of your rights to vote and to speak at the meeting
instead of you. Completion of the form of proxy will not preclude
you from attending and voting at the meeting in person if you so
wish. Your attention is drawn to the notes to the form of
proxy.
8. Recommendation
The Directors consider the Resolution to be in the best
interests of the Company and the Shareholders as a whole. The
Independent Directors therefore unanimously recommend that you vote
in favour of the Resolution at the General Meeting, as they intend
to do in respect of the 20,823,466 Ordinary Shares held by them,
representing approximately 7.55% of the current issued ordinary
share capital.
Enquiries:
Trafalgar Property Group
plc
James Dubois +44 (0) 1732 700 000
SPARK Advisory Partners Limited
- AIM Nominated Adviser
Matt Davis +44 (0) 203 368 3550
Peterhouse Capital Limited
- Broker
Duncan Vasey/Lucy Williams +44 (0) 20 7409 0930
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END
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