Disposal
Anite Group PLC
20 December 2002
For immediate release Friday, 20 December 2002
ANITE GROUP plc
Disposal of loss making German subsidiary
Anite Group plc ('Anite'), the worldwide IT solutions and services company,
today announces that it has agreed to sell its loss making German subsidiary,
Anite Consulting GmbH ('ACG'), previously known as GMO and part of its
Consultancy division, to its management team for a nominal consideration.
The majority of Anite's Consultancy division in the region, including Anite
Systems, Anite Deutschland, GMO-MC and Anite Austria, (together representing
some 82% of the total reported turnover in Austria and Germany) is being
retained and continues to perform in line with expectations. The disposal is
consistent with Anite's strategy to accelerate its plans to focus its
international consultancy based businesses on its chosen business sectors of
public sector, travel, telecoms and finance, and to leverage opportunities
provided by its strong offering of applications developed by its core UK
businesses. Completion is expected to take effect on 1 January 2003.
ACG, a specialist ERP (SAP) consultancy serving the manufacturing sector, has
offices in Berlin, Hamburg and Stuttgart, Germany, and employs around 130
people. The performance of the business has recently been disappointing
culminating in it reporting losses in the most recent trading periods, with
little prospect of an immediate return to profitability in light of the slowdown
in the German economy. As was indicated at the time of the Anite's interim
results announcement on 11 December 2002, the German consultancy market is under
extreme pressure with an over-supply of services and shortening contract cycles
combined with pricing pressure.
ACG reported losses of £1.5m (before interest, goodwill and Anite central costs
but including restructuring costs) on turnover of £3.4m in the six months to 31
October 2002 which were included in Anite's interim results for that period,
announced on 11 December 2002. These numbers will be shown as a discontinued
activity in Anite's future results. The net loss on disposal under FRS3
including goodwill written off will be approximately £14m.
The net cash outflow in respect of the disposal totals approximately £980,000:
(i) At completion Anite will pay €3m to ACG for the assumption by Anite of
tax losses of ACG, under an existing obligation resulting from an inter-company
agreement entered into for routine German group tax relief purposes. At the
same time, ACG will repay €2.3m of intra-group debt to the Anite Group;
(ii) Anite will make a payment of €750,000 in three equal tranches in the
three months to May 2003 primarily in respect of Anite's commitment to bear
certain restructuring costs of ACG.
As indicated at the time of the interim results, overall the Consultancy
division continues to benefit from its application and management support
contracts in Germany as well as an increase in public sector contracts won
through the German armed forces. Anite's business with the European Space Agency
in Germany has also performed well with sales up 10% compared with 2001, and
orders up by 60%. In addition, over 100 of the division's consultants (mostly in
Germany) are linked to long-term contracts with customers - resulting in a
variable cost structure.
John Hawkins, Chief Executive of Anite Group plc, commenting on the disposal,
stated:
'We are delighted to have agreed the sale of ACG to management. The decision to
make the disposal was taken in the light of advice that the costs, including
redundancy payments, of closing down the ACG business would have been
substantial.
'The disposal will enable Anite to focus its management and resources in Germany
on developing the faster growing and higher margin elements of its Consultancy
division.'
- Ends -
For further information, please contact: www.anite.com
Anite Group plc 0118 945 0129
John Hawkins, Chief Executive
Neil Bass, Group Financial Controller
Ian Tait, Managing Director of International Operations
Weber Shandwick Square Mile 020 7067 0700
Reg Hoare/Sara Musgrave
This information is provided by RNS
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