Disposal of Feedback Instruments Limited

RNS Number : 9727D

Feedback PLC

23 May 2012

 



23 May 2012

Feedback plc

("Feedback", the "Company" or the "Group")

Disposal of Feedback Instruments Limited

The Company announces that it has today completed the sale of Feedback Instruments Limited and Feedback Inc. to Feedback Strategic Improvement Ltd, a newly incorporated subsidiary of LD Didactic GmbH for a total consideration of approximately £260,000 (the "Disposal") comprising a nominal consideration in respect of the shares in each company and a repayment of £260,000 of the Group's indebtedness.

Reasons for the Disposal

As reported, in the Chairman's statement that accompanied the half yearly results for the six months ended 30 November 2011, Feedback Instrument Limited and Feedback Inc have continued to suffer the legacy effects of previous years' under-investment in research and development and sales activity.

The Board anticipates that Feedback Instruments Limited and Feedback Inc will continue to generate operating losses in the current financial year and into the medium term. The operating losses are now at a level which are unsustainable and the Board has taken the necessary action to stem those losses and resultant cash outflow by disposing of the businesses.

In the year ended 31 May 2011 Feedback Instruments Limited generated a turnover of £4,514,000 and an operating loss of £586,000 before taxation and the write-back of an intercompany loan, and had net assets of £37,000. In the same period Feedback Inc generated a turnover of $1,156,000 and operating profit before taxation of $64,000, with net assets of $341,000.

Following the Disposal the Company intends to concentrate on its remaining operating businesses, Feedback Data Limited and Feedback Black Box Company Limited. Significant investment has been seen in each of these businesses in the last six months and the Company remains confident that these businesses, given the renewed focus following the Disposal, will generate shareholder value in the medium term.

Commenting on the announcement:

Nick Shepheard, Executive Chairman, said;

"It has been a very difficult and challenging last five years for Feedback and in particular for our education businesses. The losses arising from these two businesses were not sustainable in the short term without a significant injection of capital. These two businesses have a history that dates back to 1958 and it is very sad that we have to take these steps to secure the future of the remaining businesses but the lack of investment in product development over many years has meant that these companies are unable to compete effectively in the current marketplace. We remain cautiously optimistic that the remaining businesses, with the renewed focus of the Board, will be able to achieve growth in the medium term".

For further information contact:

Feedback plc	Tel: [phone]
Nick Shepheard
Merchant Securities Limited (Nominated Adviser and Broker)
Simon Clements/Lindsay Mair	Tel: [phone]

 

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