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RNS Number : 8761Z
Slimma PLC
21 January 2011
Slimma PLC
("Slimma or the "Company")
Disposal and Posting of Circular to Shareholders
The Board of Slimma announces that it has today entered into a
conditional agreement for the disposal of its Slimma and Splendour
brands (the "Brands") to JD Williams & Company Limited ("JD
Williams") for a consideration of GBP800,000. The consideration is
to be settled in cash on completion.
In the year ended 2 October 2010, the Slimma Brand contributed
approximately GBP1.6 million in sales revenue to the Company with
an attributable profit before tax of approximately GBP195,000. In
the year ended 2 October 2010, the Splendour Brand contributed
approximately GBP0.3 million in sales revenue to the Company with
an attributable loss before tax of approximately GBP650,000. The
total Company sales for the year were approximately GBP7
million.
After the disposal the company will continue to operate the
Frank Usher and Michel Ambers brands. The Directors believe that
the disposal of the brands will not materially impact on the
continuing part of the business but will result in cost benefits,
mainly arising from redundancies which will need to be made as a
result of the Brand sale.
The disposal is conditional, inter alia, on the Company changing
its name from Slimma PLC and it ceasing to use the Slimma name
following Completion. It is therefore proposed that the Company's
name be changed to "CDU PLC" requiring a special resolution to be
passed by its shareholders.
The Company is today posting to its shareholders a circular (the
"Circular") in relation to the proposed disposal which includes a
notice convening a general meeting of the Company to take place at
10.15 a.m. on 14 February 2011 at which resolutions will be
proposed:
1. to change the Company name to CDU plc; and
2. for shareholders to consider, in accordance with section 656
of the Companies Act 2006, whether any, and if so what, steps
should be taken to deal with a reduction in the Company's net
assets.
A copy of the circular together with the notice of general
meeting will also be available on the Company's website,
www.slimma.com.
Further details of the disposal are set out in the letter to
shareholders from Carolyn Simons, the non-executive director of the
Company, which is included in the Circular, and which is set out
below.
For further information please contact:
Slimma PLC 01538 399141
WH Ireland Limited
Dan Bate 0161 832 2174
Definitions used in this announcement have the same meanings as
given to them in the Circular unless the context requires
otherwise.
Full text of the letter to Shareholders from Carolyn Simons
LETTER FROM THE DIRECTORS OF THE COMPANY
SLIMMA PLC
(Incorporated and registered in England and Wales under the
Companies Act 2006 with registered number 02645724)
Directors: Registered Office:
Stephen Thwaite Chief Executive Slimma House
Christopher Heath Managing Director PO Box 30
Carolyn Simons Non-Executive Director Barngate Street
Leek
Staffordshire
ST13 8AR
20 January 2011
To the Shareholders
Dear Shareholder,
Disposal of the Slimma and Splendour brands,
change of name to CDU PLC
and
Notice of General Meeting
1 Introduction
The Company has today entered into a conditional agreement for
the disposal of its interests in the Slimma and Splendour brands,
to JD Williams for a total consideration of GBP800,000 (before
expenses). The consideration is to be settled in cash on
Completion. The Disposal is conditional, inter alia, on the Company
changing its name from Slimma PLC and it ceasing to use the Slimma
name following Completion. It is therefore proposed that the
Company's name be changed to "CDU PLC", an acronym of Coterie, Dusk
& Usher (the key brands), requiring a special resolution to be
passed by Shareholders.
Details of the proposed Disposal and the short term financing of
the Company following Completion are set out below.
2 Background to and reasons for the Disposal
Slimma was admitted to trading on AIM in January 2006 having
been previously listed on the Official List of the London Stock
Exchange since 1994.
The Slimma and Splendour brands are both mail order and
independent shop brands. Although the Slimma brand name has the
support of a loyal customer base, its sales over the years have
continued to fall. The Directors believe that this is primarily due
to the brand now being seen as expensive when compared to its
competitors in the competitive value retailing sector. Although the
Company has tried to improve its competitive ability using cheaper
sources of supply, whilst still maintaining a contribution, its
products can now be sourced from other global manufacturers at much
lower prices than Slimma can achieve. This has led to increasing
requests for licensing of the Slimma brand by retailers on a
variety of products sourced by themselves rather than purchasing
the product from the Company. It is under these conditions that we
believe it is in Shareholder interests to sell the Slimma and
Splendour brands to JD Williams our principal customer.
3 Financing of Company post Completion
As Shareholders are aware, the Company has been dependent on the
financial support of its bankers, Lloyds TSB PLC, for a number of
years to enable it to continue trading during these difficult
times. Upon completion of the Disposal the indebtedness to Lloyds
TSB PLC will be reduced by approximately GBP675,000 being the net
proceeds of the Disposal, after deducting the amount to be used to
pay for professional costs incurred in connection with the Disposal
and to fund the associated restructuring.
The Directors believe that the funds immediately available to
the Group after Completion, will only be sufficient to cover the
support of the Company until the Group's current bank facility is
due for renewal on 31 March 2011. Shareholders should therefore
note that the Company will be dependent on raising an alternative
source of funding or agreeing a renewal of the bank facility within
that time period in order to enable the Company to continue as a
going concern.
As Shareholders have been previously made aware the reduction in
borrowing ability from September 2010 to March 2011 has proved
particularly challenging. To support trading through this difficult
period the Company has been forced to sell assets at values less
than would historically have been possible through managed programs
resulting in the value of the Company's net assets being at a level
that is less than half of its called up share capital. In such
circumstances, the Directors are required under section 656 of the
Act to convene a general meeting of the Company for the purpose of
considering whether any, and if so what, steps should be taken to
deal with the situation. This matter will be considered at the GM
and the steps which are recommended by the Directors are set out
below; if the steps as described are implemented, the Directors do
not consider that any additional action needs to be taken to deal
with this situation.
a. The sale of the Slimma and Splendour brands.
b. The sale of the Barngate street building.
c. A return to profitability.
4 General Meeting
A notice convening the GM of the Company for 10.15 a.m. on 14
February 2011 to be held at its registered office is set out at the
end of this document.
At the GM:
a. a special resolution will be proposed to change the name of
the Company to "CDU PLC" on Completion.
b. Shareholders will be able to consider, in accordance with
section 656 of the Act, whether any, and if so what, steps should
be taken to deal with the reduction in net assets.
5 Action to be taken
A Form of Proxy is enclosed for use at the GM. Whether or not
you intend to be present at the meeting you are requested to
complete, sign and return the Form of Proxy in accordance with the
instructions printed thereon to the Company's registrars, Capita
Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3
4TU, as soon as possible but in any event so as to arrive not later
than 10.15 a.m. on 12 February 2011. The completion and return of
the Form of Proxy will not preclude Shareholders from attending the
GM and voting in person should you subsequently wish to do so.
6 Documents available
Copies of this document will be available to the public, free of
charge, at the Company's registered office during usual business
hours on any weekday (Saturdays, Sundays and public holidays
excepted) for one month from the date of this document. This
document will also be available on the Company's website.
Recommendation
The Directors consider that the Disposal and the proposed change
of name are in the best interests of the Company and its
Shareholders as a whole and therefore unanimously recommend that
Shareholders vote in favour of the Resolutions to be proposed at
the GM as they intend to do in respect of their beneficial
holdings, which in aggregate amount to 971,569 Ordinary Shares,
representing approximately 9.32 per cent. of the Company's issued
share capital.
Yours sincerely
Carolyn Simons
For and on behalf of the Directors
This information is provided by RNS
The company news service from the London Stock Exchange
END
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