Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
2 April
2024
Software Circle plc
("Software Circle", the "Company" or the
"Group")
Sale of printing.com ("PDC") Domain and
update regarding sale of Works Manchester Limited
("WML")
Sale of
printing.com ("PDC") Domain
Software Circle plc (AIM:SFT) announces the sale
of the domain name printing.com to JAL Equity Corp, an owner and
operator of marketing, printing, signage, and promotion businesses
in the USA, for $2.27m (£1.8m).
The consideration will be satisfied in cash
payable in two instalments, one of $0.23m on completion with the
balance of $2.04m payable on or before 31 July 2024. The sale
proceeds will be applied to potential acquisitions and supporting
the Group's working capital requirements.
The PDC domain has formed part of our Nettl
Systems business for two decades. It has a special place in our
hearts for many reasons. It is, after all, where it all
began.
But things evolve. Eight years ago Nettl was
born. Extending the offering to existing and new partners alike.
Over that time more and more printing.com partners have upgraded to
Nettl, taking advantage of the additional features that help future
proof their business. Moving away from the PDC domain.
That's meant fewer and fewer PDC partners over
those years and more and more Nettl partners. As that trend and
focus continues, we find ourselves saying a very fond farewell to
printing.com. Thanks for the good times, old friend. It's been
emotional.
For the few remaining partners that utilise the
PDC domain, there'll be time for transition. We've already had
those conversations and have been preparing for a move away from
its use. We'll provide support for partners to enable a smooth
transition. We expect the majority will upgrade and become Nettl
partners. Those who don't, can continue using the software platform
to run their business as a white label partner.
Update
regarding sale of Works Manchester Limited
The sale of WML to Rymack Sign Solutions Limited
("Rymack") was first announced on 19 May 2022.
On 1 June 2023, the Company announced it hadn't
received the first instalment of deferred consideration from Rymack
which was due on 31 May 2023.
We reported in the Company's interim results on
27 November 2023 that, due to our reduced confidence of receiving
payment of any deferred consideration, the carrying value of the
£2.81m due under the sale and purchase agreement had been reduced
to £0.35m.
Our confidence in receiving any deferred
consideration further reduced following notification that WML had
filed a notice of intention to appoint administrators in December
2023. The remaining deferred consideration has now been written
down which, together with outstanding charges due from WML and net
of trading balances due to Rymack's group that the Company has set
off, results in a net charge of £0.24m.
In addition to this, as a consequence of WML's
administrator vacating the hub in Trafford Park, the Company, as a
guarantor of the lease, became liable for unpaid rent arrears,
ongoing rent for the remainder of the lease term and dilapidations.
The Company has agreed a full and final settlement of this
liability with the landlord for £0.62m.
Outlook
As part of our strategy to become a serial
acquirer of vertical market software businesses, we continually
reach out to and start conversations with potential acquisition
targets that match our criteria. The Group is currently in
exclusive discussions with two acquisition targets with a
collective turnover of approximately £3.0m and an adjusted EBITDA
of £0.9m. We will provide a trading update during April.
For further information:
Software Circle
plc
Gavin Cockerill (CEO)
07968 510 662
Allenby Capital
Limited (Nominated Adviser and
Broker)
David Hart / Piers Shimwell (Corporate Finance)
0203 328 5656
Stefano Aquilino / Joscelin Pinnington (Sales
and Corporate Broking)
Notes to editors:
Software Circle plc is a UK based acquirer of
vertical market software businesses. Our aim is to help founders
find the right exit strategy, without fuss or drama. Continuing
operations in an independent, decentralised way. Keeping the
entrepreneurial spirit and culture that exists in the businesses we
acquire. Providing a permanent home for their teams, management
talent and culture.