GRC International Group PLC Postponement of Preliminary Results (1992G)
July 22 2019 - 1:00AM
UK Regulatory
TIDMGRC
RNS Number : 1992G
GRC International Group PLC
22 July 2019
This announcement contains inside information
22 July 2019
GRC International Group plc
("GRC International", the "Company" or the "Group")
Postponement of Preliminary Results
The Company announces that the publication of its preliminary
accounts for the year ending 31 March 2019, which were expected to
be published today, has been subject to a short delay whilst the
Company finalises the deferred consideration due to the vendors
(and existing management team) of DQM Holdings Limited ("DQM") that
was acquired by the Company at the end of the financial year, as
announced on 11 February 2019.
Under the sale and purchase agreement (the "Agreement"), further
consideration ("Deferred Consideration") is due to the vendors of
DQM based on the accounts for the financial year ending 28 February
2019 ("Earn-out Accounts"). DQM's financial performance was better
than originally expected and the final amount of Deferred
Consideration is consequently expected to be in the region of
GBP3.7 million, slightly ahead of the top range of the GBP2.5 -
GBP3.5 million as announced on 11 February 2019.
Under the Agreement, the Deferred Consideration is intended to
be satisfied through cash (as to 60 per cent. of the Deferred
Consideration) and the issue of Ordinary Shares (as to 40 per cent.
of the Deferred Consideration and based on an issue price per
Ordinary Share of 116.5 pence) within five business days of
completion of the audit of DQM's Earn Out Accounts.
In advance of the Deferred Consideration falling due, the
Company is presently holding constructive discussions with the
vendors of DQM, who are mainly Group employees, in order to vary
the terms of the existing Agreement, which may result in the timing
and/or composition of the deferred consideration being different
from that as announced on 11 February 2019.
Negotiations with the vendors will include in what form
settlement might take and the Company is considering a range of
options which includes, but is not limited to, adjusting the
balance of consideration between cash and shares and exploring the
feasibility of a payment schedule in order to enable the Company to
satisfy the cash element of the deferred consideration that is
expected to fall in August or possibly September. The Company will
also, if necessary, consider different potential funding options,
including but not limited to debt and equity, from existing and
other potential investors. Discussions are ongoing and the Company
expects to announce its preliminary results once negotiations with
the vendors have concluded.
As previously reported, the Company's unaudited preliminary
annual results will show revenue of GBP15.8 million, an underlying
EBITDA loss of approximately GBP4.3 million and a loss before tax,
exceptional items and share based payments of approximately GBP5.1
million.
The year ended 31 March 2019 was a year of significant
investment in new business areas and geographies which, as
expected, impacted short-term profitability. Within the final
quarter of the year ended 31 March 2019 the Group saw a return to
positive EBITDA and positive cash generation as the benefits of
these investments came through.
Enquiries
GRC International Group plc www.grci.group
Alan Calder (CEO) +44 33 3800 7000
Chris Hartshorne (Finance Director)
Grant Thornton UK LLP (Nomad)
Philip Secrett/ Jamie Barklem/ Ben Roberts 020 7383 5100
Dowgate Capital Limited (Broker)
James Serjeant 020 3903 7717
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END
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