Acqn of Stewart Travel Centre & Trading Update

RNS Number : 4661Z

Minoan Group PLC

16 March 2012

 



16 March 2012

Minoan Group Plc

("Minoan" or the "Group") 

Acquisition of Stewart Travel Centre and Trading Update

Minoan, the AIM listed travel and leisure company, is pleased to announce that it has  signed an agreement for the purchase of the assets and business of Stewart Travel Centre ("Stewart") having previously announced the acquisition of a 19.9% interest in Stewart and the signing of a management agreement for the future operation thereof on 1 June 2011.

Background

The business of Stewart, which also trades as Scotland's Cruise Centre, commenced in 1972 and Stewart now employs 67 people. In addition to its cruise division, the group operates Stewart Corporate Travel as well as golf and affinity divisions.

In its financial accounts for the year ended 30 April 2011 Stewart generated a net profit of £107,000 before exceptional items (£143,000 post exceptional items, mainly in respect of an insurance claim) on gross revenues (being total transaction value) of £19.7 million and commission of £2.1 million. 

Willie Stewart, who will be appointed a director of Stewart Travel Limited, the wholly owned subsidiary of Minoan that is acquiring Stewart, is also the Chairman of Advantage, a consortium of 800 independent travel agencies, and was recently awarded an Outstanding Contribution Award for his contribution to retail travel at the Agent Achievement Awards in London.

Acquisition

The key terms of the acquisition of the assets and business of Stewart are:

(i)     Consideration of £545,000 comprising:

·    £320,000 cash; and

·    Convertible loan note of £225,000 repayable in cash at par on 30 June 2012 or, at the noteholder's choice, on 30 June 2013. The noteholder may choose to convert all, or part, of the loan note into fully paid up ordinary shares of 1p each in Minoan ("Ordinary Shares") at 7.5 pence per share at any time until 30 June 2013.

      (ii)    Earn-out of five times net profits (as defined) in excess of £150,000 for the

               period from 1 March 2012 to 31 October 2012. Given that the earn-out will only be payable on profits up to £250,000, the maximum payable in cash under the earn-out would be £500,000.

 (iii)  The grant of an option to Stewart to purchase up to 1 million Ordinary Shares

               at an exercise price of 7.5 per share. The Option will expire on 30 June 2015. 

      (iv)  Conditions:

·    Minoan to receive regulatory approval from the relevant authorities; and

·    Stewart to provide Minoan with a signed warranty certificate as defined.

The long stop date for the completion of these conditions is 5 p.m. on 31 May   2012 or such later date as the parties may agree.

       (v)  Minoan to resign as a partner in Stewart.

The acquisition of the assets and business of Stewart has been treated as a substantial transaction in accordance with AIM Rule 12.

Travel and Leisure Business Update

In the four month period to the end of February, Minoan is pleased to announce that the Group's bookings, including Stewart, are down 2% and sales commissions are down 1% relative to the comparable period in the previous year. This compares with tough general market conditions where bookings, according to latest industry figures, are approximately 14% down on the comparable period in 2011. However, in the key trading period of January and February the Group's bookings, including Stewart, are in line with the previous year. In the same period, sales commission is approximately 5% ahead of the previous year.

This positive trend has been achieved during the initial period of integration of the businesses and further improvement is anticipated by the Board following the acquisition of Stewart as all three businesses acquired become fully integrated and the local economies of scale anticipated are achieved.

Christopher Egleton, Chairman of Minoan commented:

"We are delighted to have completed the Stewart acquisition, which will further enhance the Group's first regional cluster of travel businesses.

The initial results of the Group's travel and leisure business are very encouraging and the Board is confident that the full integration of Stewart will serve to further improve the performance of this section of the Group's business.

The Group is already targeting a number of further travel distribution   opportunities whilst continuing to build its online presence and review certain strategic partnerships."

For further information visit www.minoangroup.comor contact:

Minoan Group Plc

Christopher Egleton                                              [e-mail]

Bill Cole                                                                020 8253 4305

Seymour Pierce Limited                                     020 7107 8000

Nicola Marrin/David Foreman (Corporate Finance)  

Rivington Street Corporate Finance Limited   020 7562 3384

Jon Levinson

Bishopsgate Communications Limited              020 7562 3350                               

Nick Rome/Shabnam Bashir

 

END

 

 

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