Issue of Equity
April 15 2004 - 2:00AM
UK Regulatory
RNS Number:6265X
Ultimate Finance Group PLC
15 April 2004
Ultimate Finance Group PLC
Placing and Offer for Subscription
Ultimate Finance Group PLC ("Ultimate", or "the Company") offers factoring and
invoice discounting services, which provide small to medium sized businesses
with a highly flexible form of cash flow funding
The Board of Ultimate is pleased to announce the placing of 3,473,646 new
ordinary shares at a price of 15p each, raising approximately #495,000, net of
expenses, for the development of the Company's factoring and invoice discounting
business. The Company's broker is W.H. Ireland Limited and its Nominated Adviser
is Dawnay Day Corporate Finance Limited. Application has been made to AIM for
the new ordinary shares to be admitted to trading ("Admission") and dealings in
the new ordinary shares are expected to commence on 20 April 2004. On Admission
of the new ordinary shares, Ultimate will have 14,697,018 ordinary shares in
issue. In order to give other investors the opportunity to subscribe for new
ordinary shares on the same terms, a prospectus will be issued within the next
few weeks for an offer for subscription. If the offer for subscription is
oversubscribed, priority will be given to existing shareholders.
Use of proceeds
The proceeds of the placing will strengthen the Company's capital base and
enhance its borrowing capacity, enabling it to fund its growing factoring and
invoice discounting books. The proceeds of the placing will also enable the
Company to expand its sales force and continue to build its portfolio, but at a
quicker pace than hitherto.
Background
The Company started trading in July 2002 as a cash flow finance company managed
by a number of experienced executives in the UK factoring, invoice discounting
and trade finance markets. The Company operates from offices in Bristol and has
a branch in Manchester.
Since the Company's initial admission to AIM in June 2002, it has made
significant progress. Fully operational teams and systems have been established,
a steady flow of opportunities has been generated and a growing portfolio of
factoring and invoice discounting clients has been built up. The Company's
additional capital requirements will provide the resources necessary to expand
the business and address a significant UK market opportunity.
The provision of factoring and similar products has grown rapidly in the UK in
recent years. As at 31 December 2003, members of the FDA (a trade body
representing factoring and invoice discounting companies) were providing
approximately #8.8 billion of funding showing a 40% increase on the 2000 figure
of #6.3 billion (source: FDA). Over the same period, turnover achieved by
members of the FDA increased from #76.2 billion to #117.1 billion (source: FDA).
Major shareholdings
The holdings of certain directors and major shareholders in Ultimate are
increasing as a result of the placing. Following Admission, City Equities
Limited and its investment clients will hold 1,500,000 Ultimate shares
representing 10.21% of Ultimate's enlarged issued share capital.
The shareholdings of those directors who participated in the Placing (and their
percentages of Ultimate's issued share capital) will be as follows following
Admission:
Name Shares acquired Enlarged holding Percentage
----------- ----------------- ----------------- -----------
Clive Garston 50,000 191,810 1.31%
Brian Sumner 133,500 1,335,345 9.09%
Derek Ashford 20,000 61,000 0.42%
Jeremy Coombes 100,000 800,01 5.44%
Richard Lee 20,000 61,000 0.42%
Richard Pepler 116,650 934,160 6.36%
W.H. Ireland Group PLC is deemed by the City Code on Takeovers and Mergers to be
acting in concert with its directors and with discretionary investment
management clients of its wholly owned stockbroking subsidiary, W.H. Ireland
Limited (together referred to as "the Concert Party"). After Admission of the
new shares in the placing, the Concert Party will, in aggregate, hold 4,371,184
Ultimate shares (representing 29.74% of its enlarged issued share capital).
Commenting on the placing, Clive Garston, the Company's chairman, said :
"As a start up business and new-comer to AIM in 2002, Ultimate has made
significant progress. It has steadily built up its sales customer base and now
provides services to 89 corporate clients. The proceeds of the placing and of
the planned offer for subscription will provide Ultimate with the resources to
pursue significant opportunities within the UK factoring market. I am also
pleased to report that our interim results, which were announced at the end of
March were in line with expectations. The Board is confident of the group's
continued progress and we look forward to updating shareholders in due course".
Enquiries:
Brian Sumner, Chief Executive Tel: 07976 406474
David Floyd, Dawnay, Day Corporate Finance Tel: 0207 509 4570
Shane Dolan, Biddicks Tel: 0207 448 1000
This announcement, for which the directors of Ultimate are responsible, does not
constitute an offer for securities. Dawnay, Day Corporate Finance Limited and
W.H. Ireland Limited, both of which are authorised and regulated by the
Financial Services Authority, are acting for Ultimate and no-one else and will
not be responsible to anyone other than Ultimate for providing the protections
afforded to customers of Dawnay, Day Corporate Finance Limited or W.H. Ireland
Limited respectively or for providing advice in relation to the placing.
Notes to editors
Factoring
Factoring is a method whereby trading companies raise finance by selling the
debts due from their customers on a continuing basis to raise cash for working
capital and for expansion. It is in many cases preferable to a bank overdraft
for the company and for this reason is a strongly growing sector of the
financial market.
Products
The full factoring package service arrangement provides advances of up to 85% of
approved debtors and debt collection / sales ledger management services for
client businesses which results in faster payments from customers, without
damaging goodwill. Invoice discounting is similar in that clients sell the trade
debts due from their customers and receive a cash advance, but the client
retains responsibility for its own credit management.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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