Virtue Broadcasting PLC
26 June 2003
Virtue Broadcasting divests UK Media Services division
London, 26 June, 2003: Virtue Broadcasting Plc ('Virtue') today announces that
it has divested its UK Media Services division, one of its subsidiary companies,
Virtue Media Services Limited ('VMS'), to Interoute Communications Limited ('ICL
') for an aggregate consideration of approximately £800,000, in order to focus
on the Corporate Communication market segment and capitalise on its current
market position. ICL has been treated as a related party for the purposes of the
rules of the Alternative Investment Market as it is believed that Interoute
Finance Plc, which owns 13.4% of Virtue, is related to ICL.
VMS contributed a pre-tax loss before exceptional items from continuing
operations of £1,345,000 on turnover of £1,711,000 to the Group's result in the
financial year ended 31 December 2002. At 31 December 2002 VMS had net assets of
The consideration is comprised of cash payable on completion of £600,000 and
adjusted net working capital as at 30 June, which the Board estimate to be
£200,000, payable over a period of six months from completion. Additionally,
Interoute will provide a range of services to Virtue to the value of €168,000
and has contracted to purchase £77,000 of services from Virtue.
Mr. Nicholas English and Mr. Giles English, who will each remain with VMS as
employees and directors until the closure of the transaction, are deemed not to
be independent directors of Virtue in relation to the disposal and as such have
not participated in the Board's consideration of the disposal. The board of
Virtue, other than Mr. Nicholas English and Mr. Giles English, having consulted
Brewin Dolphin Securities, the Company's nominated adviser, believe the terms of
the transaction are fair and reasonable insofar as shareholders are concerned.
Following the disposal, Virtue will be solely focused on the Corporate
Communication market segment, where it has a strong market position. Further
information on the refocus will be included in the Group's preliminary
announcement. The Group's Corporate Services division will consist of two
subsidiaries: Virtue Corporate Services Limited and Virtue Broadcasting Pty Ltd,
operating in the UK and Australia respectively.
The proceeds of the divestment will be used to fund the Group's working capital
requirements over the coming year.
Virtual Broadcasting - Tel. 0207 785 6000
Neil Ferris, Chairman
James Ormondroyd, Finance Director
Mantra PR Ltd. - Tel. 0207 072 2319 / 07831 655 630
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