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Fastrack Group PLC (FTK)


Wednesday 04 October, 2000

Fastrack Group PLC

Interim Results/Acquisition

Fastrack Group PLC
4 October 2000

FASTRACK GROUP PLC (the 'Company')


The Group's performance in the first half of 2000 has been disappointing.
Although sales growth was 4.6% compared with the same period last year, costs
have increased by 11.5%, as a result of which, the loss on ordinary activities
before tax was £1,640,000 compared with a loss of £669,000 in the first half
of 1999. The high fixed costs of our infrastructure, which continues to
operate well below capacity and large increases in fuel and insurance costs
have exposed the lack of critical mass in the network.

Our Home Delivery Business has continued to grow successfully during the year
with significant activity from Cellular Operations Ltd, Virgin Wine and the
Australian Wine Club. However, the sudden closure of the largest customer of a
major client has had a negative impact on sales since July. Since the half
year we have been successful in gaining a major new contract with Parcelnet,
the distribution arm of Grattans plc and Freemans, two of the largest UK home
shopping companies.

Sales in July and August have continued to be below expectations, a situation
which we believe has impacted the whole sector and the recovery that was
evident in early September has been stalled by the fuel crisis in the middle
of the month. These factors have put considerable pressure on the Group's cash

In line with my 1999 statement, the Board has been considering a number of
acquisition opportunities in order to take advantage of the consolidation
taking place in our industry.

I am therefore pleased to announce today that the Company has entered into a
conditional agreement with Jacobs Holdings Plc ('Jacobs') to acquire the
business and assets of Ontime Logistics Limited ('Ontime') and the assets held
by Jacobs Transportation Limited used in the Ontime business, in consideration
for the issue of 61,548,387 new Ordinary Shares in the Company to Jacobs. In
addition, Jacobs has today subscribed for 6,451,613 new Ordinary Shares at a
price of 7.75 pence per ordinary share, being the closing mid-market price on
3 October 2000. Application will be made for these shares to be admitted to
the Official List of the UK Listing Authority and to trading on the London
Stock Exchange's market for listed securities.

Ontime provides both domestic express parcel delivery and international
freight forwarding services to a broad range of business-to-business
customers. The domestic parcel business operates from 22 locations throughout
the UK of which 16 are operated by Franchisees. The international business has
a long established customer base, and is expanding through the selection and
appointment of a number of partnerships within Europe.

The business and assets to be transferred will comprise cash, fixed assets,
goodwill stocks, debtors and creditors, with a net asset value of
approximately £3.5 million. For the year to 31 December 1999 Ontime generated
sales of £21.8 million and incurred an operating loss of £4.7 million.

The Directors believe that the proposed acquisition will enable the Group to
achieve the critical mass necessary to move into profitability much faster
than would be achieved organically. Although we expect strong levels of
organic growth from new contracts in the last four months of the current year,
the hub and depot network would still be operating below capacity. We believe
the mix of sales we will acquire from Ontime, with their strong international
sales base and good business to business contracts, will blend well with our
existing customer base. The Directors believe the merger of the two franchise
networks will improve customer service levels and require only a relatively
small amount of reorganisation of territories. It will also enable a number of
corporately operated depots of both businesses to be closed with consequent
significant cost savings. Your Board believe the enlarged network of 71 depots
will enable us to optimise trunking and to attack the domestic market with a
larger sales force than either business has previously had available.

Ontime's track and trace system, which has recently been developed, will be
utilised in the enlarged business to enable the Group to accelerate the
availability of this service to its customers by 6-12 months, and at a lower
investment cost than had previously been envisaged.

It is proposed that, following the completion of the acquisition, Michael
Kingshott, the Managing Director of Jacobs, will be appointed to the Board as
non-executive Director. Michael joined Jacobs in 1994 as Managing Director,
prior to which he was Chairman of Sally Ferries. Michael also co-founded
Sheertruck International Limited and Seaking Limited, a vehicle pre-delivery
inspection specialist.

The Board indicated in an announcement made on 18 August 2000 that, in order
to allow the Board the maximum flexibility to act in relation to suitable
opportunities as they arose, it believed that it was in the best interests of
the Company to cancel the existing listing on the Official List of the UK
Listing Authority and trading on the London Stock Exchange's market for listed

As the acquisition of Ontime will significantly enhance the scale of the
Group's operations, the Board have decided to postpone the previously proposed
cancellation of the Group's listing and admission to AIM pending further
consideration of the most suitable market for the enlarged Group's securities
to be traded on. No final decision on this matter will be made until the
Ontime business has been fully integrated with the Company's existing

It is also proposed to grant to each of Goldpower Limited and Jacobs put and
call options in each case over 12,903,226 and 10,526,316 Ordinary Shares
respectively, which will enable the Group to raise up to £2 million in further
funding at various times over the next 2 years.

Jacobs will also guarantee the obligations of Fastrack to HSBC Bank plc in an
amount of £2 million. In the event of a call being made under this guarantee,
the amount of the call will either be reimbursed in cash by Fastrack to
Jacobs, or at Fastrack's option, satisfied by the allotment of new Ordinary
Shares in Fastrack, having a value, at a subscription price of 7.75 pence per
ordinary share, or the closing market price on the day preceding the date of
the call if lower (subject to a minimum of nominal value), equal as nearly as
may be to the amount of the call.

Due, inter alia, to the size of the acquisition, the acquisition and the put
and call options are conditional upon shareholder approval. An explanatory
circular comprising listing particulars will be sent to shareholders as soon
as is practicable, containing, inter alia, the notice of an extraordinary
general meeting of the Company at which the shareholder approvals will be

Following completion of the acquisition Jacobs will be interested in 34.7 per
cent of the issued share capital of the Company . Assuming subsequently that
Jacobs were to acquire the maximum potential number of Ordinary Shares under
the option and bank guarantee arrangements outlined above, Jacobs could be
interested in a maximum of approximately 48 per cent of the issued share
capital of the Company. Consequently, shareholders' approval will be sought to
waive the requirement that Jacobs make a general offer to shareholders. The
acquisition will be conditional on such approval.

As shareholders will appreciate, this has been a very difficult environment
for the Company's franchisees and employees. As always they have responded
well to the ongoing challenges, for which the Board is very grateful.

Unaudited Consolidated Profit and Loss
for the six months ended 30 June
                                            Unaudited   Unaudited   12 months
                                              6/30/00     6/30/99    12/31/99
                                      Note      £'000       £'000       £'000
Turnover                                       13,165      12,589      26,229
Operating loss
Normal                                        (1,390)       (390)     (1,557)
Exceptional                              2          0        (70)        (70)
                                              (1,390)       (460)     (1,627)
Interest payable                                (250)       (209)       (429)
Loss on ordinary activities before
taxation                                      (1,640)       (669)     (2,056)
                                                    0           0         100
Loss on ordinary activities after
taxation                                      (1,640)       (669)     (1,956)
Basic loss per share                     4     (2.04) p    (0.92) p    (2.60) p

The Group had no recognised gains or losses other than the losses
shown above.

Results for the current and previous period relate wholly to
continuing operations.

Unaudited Consolidated Balance Sheet
as at 30 June 2000
                                          Unaudited    Unaudited        Audited
                                           30/06/00     30/06/99       31/12/99
                                              £'000        £'000          £'000
Fixed Assets
Tangible Assets                               2,522        2,824          2,714
Current Assets
Debtors                                       8,223        7,349          7,905
Creditors: amounts falling due
within one year:
Convertible loan                              (500)            0          (500)
Other                                      (11,622)      (8,750)        (9,633)
                                           (12,122)      (8,750)       (10,133)
Net current liabilities                     (3,899)      (1,401)        (2,228)
Total assets less current liabilities       (1,377)        1,423            486
Creditors: amounts falling due
after more than one year                      (437)        (842)          (660)
Net (liabilities)/funds                     (1,814)          581          (174)
Capital and Reserves
Called up share capital                       4,022        3,633          4,022
Share premium account                           232           89            232
Other reserves                                1,135        1,135          1,135
Profit and loss account                     (7,203)      (4,276)        (5,563)
Equity shareholders' (deficit)/funds        (1,814)          581          (174)
Reconciliation of Shareholders' Funds
(Loss) for the period                       (1,640)        (669)        (1,956)
New share capital issued                          -            -            532
Net (decrease) in shareholders' funds       (1,640)        (669)        (1,424)
Opening shareholders' funds                   (174)        1,250          1,250
Closing shareholders' (deficit)/funds       (1,814)          581          (174)

Unaudited Consolidated Cash Flow Statement
for the six months ended 30 June 2000
                                              Unaudited    Unaudited     12     
                                             30/06/00     30/06/99   months to
                                    Note  £'000 £'000  £'000 £'000  £'000 £'000 
Net cash outflow from operating       5        (1,974)        (313)       (989)
Returns on investments and servicing of
Interest and finance
charges paid                                (210)       (153)        (325)
Interest element of finance
lease rental payments                        (40)        (56)        (104)
Net cash outflow from returns
on investments and servicing
of finance                                       (250)         (209)      (429)
UK corporation tax repaid                           -             -           -
Capital expenditure and financial
Purchase of tangible fixed assets            (108)       (91)        (265)
Current asset investment disposals
Sale of tangible fixed assets                  40         92          152
                                                   (68)          1        (113)
Net cash outflow
before financing                                 (2,292)      (521)     (1,531)
Share issues (net proceeds)                  (36)          -          532
Capital element of finance lease      6     (240)       (212)        (385)
Other loans (repaid)/received                              -          500
Net cash inflow/(outflow) from
financing                                          (276)       (212)        647
Decrease in cash and cash equivalents            (2,568)       (733)      (884)

Notes to the unaudited financial statements
for the six months ended 30 June 2000

1.  These unaudited accounts have been prepared on the basis of the accounting
    policies set out in the Annual Report and Accounts for 1999.

2.  The exceptional cost in 1999 was compensation for loss of office paid to a

3.  The financial information contained in this document does not constitute
    financial statements within the meaning of section 240 of the Companies Act
    1985. Financial statements for the year ended 31 December 1999 have been
    filed with the Registrar of Companies. The auditor's report on those
    financial statements was unqualified.

4.  The calculation of loss per share for the period set out above has been
    based on the weighted average number of ordinary shares in issue in the
    period of 80,434,648 (six months ended30 June 1999 72,667,981; 12 months to
    31/12/99 74,627,433).

5. Reconcilliation of operating loss to net cash outflow from
operating activities
                                             Unaudited  Unaudited  12 months to
                                              30/06/00   30/06/99      01/12/99
                                                 £'000      £'000         £'000
Operating loss                                 (1,390)      (460)       (1,627)
Depreciation                                       258        243           476
Profit on sale of tangible fixed assets              2          -             2
Decrease/(increase) in debtors                   (318)      (782)       (1,338)
(Decrease)/increase in creditors                 (526)        686         1,498
Net cash outflow from operating activities     (1,974)      (313)         (989)
6. Analysis of net debt
                                                  Cash Non Cash
                                    01/01/00      flow  Charges       30/06/00
                                       £'000     £'000    £'000          £'000
Cash at bank and in hand
Overdrafts                           (1,097)   (2,562)                 (3,659)
Invoice discounting                  (2,941)       (6)                 (2,947)
                                     (4,038)   (2,568)                 (6,606)
Debt due within one year
Finance leases                       (1,055)       240                   (815)
Convertible debt                       (500)                             (500)
                                     (5,593)   (2,328)        0        (7,921)

7. Reconcilliation of net cash flow to movement in net debt
                                                 Unaudited    Unaudited    12   
                                                  30/06/00    30/06/99 01/12/99
                                                     £'000       £'000    £'000
Decrease in cash                                   (2,568)        (733)   (884)
Cash outflow from decrease in debt and lease           240          212    385
                                                   (2,328)        (521)   (499)
New finance leases                                       0        (256)   (267)
Convertible debt                                         0            0   (500)
Movement in net debt                               (2,328)        (777) (1,266)
Debt at 1st January 2000                           (5,593)      (4,327) (4,327)
                                                   (7,921)      (5,104) (5,593)

For further information, please contact:

Andy Ducker     Fastrack Group PLC                            024 7638 9017
Tim Blackstone  Blackstone Business Communications            020 7251 2527
Mark Brady      Brewin Dolphin Securities Ltd                 0161 839 4222

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