Disposal of Letts
Bemrose Corp PLC
11 August 2000
BEMROSE CORPORATION PLC
('Bemrose' or the 'Company')
Disposal of the Charles Letts diary business ('Letts')
Introduction
The Board of Bemrose announces that it has sold Letts (on a debt
and cash free basis) for £12.25 million to a newly formed company
that has recently changed its name to Letts Holdings Limited
('LHL'). LHL is a company formed on behalf of Dunedin Capital
Partners Limited, Bank of Scotland and certain senior management
of the business.
The disposal of Letts, the only remaining business within the
Specialist Print Services division, represents the final stage in
the implementation of the fundamental reorganisation of the
business strategy to concentrate Bemrose's managerial, technical
and financial resources on the Promotional Marketing division
(4imprint).
The Directors continue to believe that the prospects for both
organic and acquisition led growth in the continuing business
will be enhanced by the re-investment of the sale proceeds.
Investment and acquisition opportunities within the promotional
marketing industry are currently being assessed. If there is a
surplus of disposal proceeds over investment requirements, this
surplus will be returned to shareholders in due course.
Rodger Booth,Chairman commented:
'Completion of this deal is important for Bemrose shareholders.
It marks the end of the disposal programme and will enable the
management team to concentrate solely on building a more
substantial international corporate promotional products
business under the 4imprint brand. A significant step in this
direction was taken recently with the strategic alliance with
Lands' End, the world largest on-line seller of clothing.'
Information on Letts
Letts is a long established and widely recognised, international
diary business based in Dalkeith, Scotland. Letts designs,
develops, manufactures and sells a range of branded and own label
diary products (approximately 20 million diaries per annum),
which are distributed to over 25 countries worldwide. It is the
largest publisher and manufacturer in the UK with over 40 per
cent. market share and is particularly strong in the business to
business market. Its customers include a mix of corporate,
retail and wholesale clients in the UK and overseas.
For the year ended 1 January, 2000 Letts generated operating
profit of £2.7 million (1998: £2.1 million) on turnover of £25.4
million (1998:£26.6 million). As at 1 January, 2000 it had net
assets of £15.0 million (1998:£13.6 million).
Details of the disposal
The sale of Letts has been effected by the sale of the entire
issued share capitals of Barnard and Jackson (Holdings) Limited
and Charles Letts Group Limited to LHL for an aggregate
consideration of £12.25 million in cash, subject to certain
conditions and adjustments. Bemrose has given certain warranties
and indemnities in favour of LHL.
The exceptional loss on the disposal of Letts based upon the net
assets book value of £15.0 million at 1 January 2000 and £17.4
million of goodwill previously written off is £21.2 million after
disposal costs of £1.0 million and will be reported as an
exceptional item in the profit and loss account for the 52 weeks
ending 30 December 2000. No taxation liabilities are expected to
arise from the disposal.
Board changes
As previously announced Rodger Booth has become non-executive
chairman of Bemrose following the disposal of Letts.
For further information, please contact:
Bemrose Corporation PLC
Dick Nelson, Chief Executive 001 920810 9696 (after 11am)
Rodger Booth, Chairman 01482 867 862
Richard Harrison, Finance Director 01482 867 862
N M Rothschild & Sons Ltd
David Forbes 0113 200 1900
David Wilton 0113 200 1900
Buchanan Communications
Mark Edwards 020 7466 5000
Jeremy Garcia
N M Rothschild & Sons Limited, which is regulated in the United
Kingdom by The Securities and Futures Authority Limited, is
acting for Bemrose and no-one else in connection with the
disposal and will not be responsible to anyone other than Bemrose
for providing the protections afforded to its customers or for
providing advice in relation to the disposal or any matter
referred to in this announcement.
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