Disposal
14 April 2008 - 5:01PM
UK Regulatory
RNS Number:2290S
AMCO Corporation PLC
14 April 2008
Press Release 14 April 2008
Amco Corporation Plc
Disposal of non-core assets
Proposal to change of name to Billington Holdings plc
Board changes
Change of Registered Office
Amco Corporation Plc ("Amco Corporation" or "the Group") is pleased to announce
that it has reached agreement to sell certain non-core operations, comprising
the Group's construction, manufacturing and property investment and development
businesses ("the exiting group"), to Amco Group Limited ("Newco") for a cash
consideration of �9.4 million, payable as to �8 million on completion and the
balance within 12 months. Amco Group Limited is owned by Endless LLP and
certain directors and employees.
Reasons for the disposal
Amco Corporation Plc is the holding company for a broad mix of companies serving
a range of sectors, including structural steel, construction, property,
engineering and manufacturing. Following the talks held in 2006 regarding a
possible buy out of the entire Group, the Board has reviewed the strategic
direction of the Group. The Board has concluded that there are limited
synergies between some parts of the Group and that shareholder interests would
be better served by a clear strategic focus.
The transaction will transform the Group, with the Retained Group focussed
wholly on the existing Structural Steel and Engineering businesses. The
majority of the Retained Group comprises Billington Structures Ltd, a large and
profitable structural steel business with a track record of growth. The exiting
group includes businesses which have provided volatile results which detract
from the consistency and visibility of the earnings stream from the Retained
Group (being the Amco group companies following the sale of the exiting group).
The independent directors (being the Directors of Amco Corporation apart from
Messrs Jackson and Swire) believe the Retained Group is capable of sustained
organic growth, whilst the disposal proceeds provide the flexibility to invest
where appropriate to capitalise on organic opportunities and to consider growth
by acquisition.
Structural Steel comprises Billington Structures, the award-winning and
nationally recognised steelwork contractor; easi-edge, a safety solutions
provider, and Hollybank, a manufacturer of steel arches for the mining industry.
Engineering comprises Dosco, an internationally known designer and
manufacturer of underground tunnelling and roadheading machinery.
Related Party Transaction
The disposal constitutes a related party transaction under the AIM Rules as
David Jackson and Ian Swire, both directors of Amco Corporation, are interested
in Newco. Their combined interest in Newco exceeds 30% of the issued share
capital in that company.
The independent directors consider, having consulted with Brewin Dolphin
Investment Banking, the nominated adviser, that the terms of the transaction are
fair and reasonable insofar as its shareholders are concerned.
Change of name
At the AGM a resolution will be put to shareholders to change the company's name
to Billington Holdings plc. The independent directors believe that the new name
will better reflect the focus of the Group's activities and also signifies a
major change in the life of the Group. In addition, with immediate effect, the
Registered Office of Amco Corporation Plc will be relocated to the offices of
Billington Structures Limited at:
Barnsley Road
Wombwell
Barnsley
South Yorkshire
S73 8DS
Board changes
David Jackson and Ian Swire, the present Executive Director and Finance Director
of Amco Corporation, have worked with Endless LLP on the disposal and are
leaving Amco Corporation as part of the disposal. Accordingly, both have
resigned with immediate effect.
Peter Hart and Mike Fewster are currently Finance Director and Operations
Director for Billington Structures Ltd and accordingly have been appointed
Directors of Amco Corporation with immediate effect (further details are set out
below).
Preliminary results
The results for the year ended 31 December 2007 will be announced by the end of
April 2008. For the Group as a whole, these are expected to be in line with
expectations before non-recurring items. Profit after taxation for the Retained
Group is expected to be �3.31 million (2006: �3.27 million). However, profit
after taxation relating to the exiting Group is expected to be �1.13 million
(2006: �2.91 million) which is below management expectations following a one off
provision relating to a mining contract. In addition, the results are expected
to show a loss of �8.62 million relating to the disposal, being the difference
between the consideration net of transaction costs and the net assets being
disposed of. The overall result for the year is therefore expected to be a loss
of �4.18 million (2006: profit of �6.19 million). The figures stated above are
at present unaudited, but it is not anticipated that there will be any material
change between these figures and the preliminary announcement.
The final dividend for the year ended 31 December 2007 will be in line with
expectations at 7.5p per share.
Current trading
Structural Steel has a record forward order book in excess of �40 million. The
workload is spread geographically across the length and breadth of the UK
mainland with structural steelwork destined for projects that service a wide
variety of building types and sectors. Current projects cover a wide spectrum
of activities including education, military infrastructure, the arts, commercial
premises and industrial buildings. This coupled with a substantial blue chip
customer base, provides a strong trading pipeline for our Structural Steel
activities to continue to develop through 2008 and beyond.
The recent turmoil in the financial markets has led to a degree of general
nervousness in the construction sector, particularly affecting residential and
distribution projects. Neither of these building types feature highly in
Billington's current portfolio and we continue to see strong demand from the
various schools initiatives, power stations and general town centre regeneration
projects.
The current buoyant conditions in the world mining industry mean that Dosco is
experiencing a steady demand in its spares business and has orders and enquiries
for new and refurbished machines going through into 2009.
For further information please contact:
Amco Corporation Plc
Peter Hems, Executive Chairman Tel: + 44 (0) 116 2575170 (Chairman's office)
+44 (0) 1226 340666 (Billingtons)
Brewin Dolphin Investment Banking
Andrew Emmott Tel: +44 (0) 845 270 8610
Media enquiries:
Abchurch
Sarah Hollins / Chris Lane Tel: +44 (0) 113 203 1343
chris.lane@abchurch-group.com www.abchurch-group.com
Information about the Retained Group
Billington Structures Ltd has been trading continuously since 1947 and now
employs in excess of 300 people at its factories and offices in Barnsley (its
head office) and Bristol.
Billington has an extremely experienced management team, led by Stephen Fareham
as Managing Director, Mike Fewster as Operations Director and Peter Hart in the
role of Finance Director. The senior management is backed and supported by a
strong and experienced divisional team of managers operating in the roles of
Commercial Director (Martin Goddard age 41), Technical Director (Steve Mason
AMIStructE age 54), Contracts Director (Mike Rowe MIOB age 50) and Production
Director (Kevin Campbell BEng MBA MIET age 42).
Billington details, procures, fabricates and erects on site over 27,000 tonnes
of steelwork for use in schools, hospitals, defence, commercial and industrial
buildings; its particular strength is its ability to deal with the more complex
structures sometimes avoided by its mass production rivals. All work is
controlled by its Bilmis intranet and in accordance with its ISO 9001, 14001 and
18001 accreditations.
Some 20% of its sales revenue arises from additional contracting activity,
including metal deck flooring, edge protection (utilising easi-edge), concrete
floors, stairs, intumescent paint and cold rolled products. Production operates
on a just-in-time basis meaning that stocks of main steel sections are kept to a
minimum. Steel is supplied by Corus Distribution's sites at Leeds and Yate.
This seamless electronic, arrangement has operated for over 14 years and
Billington is now ranked as one of Corus Distribution's largest customers.
A mix of stability, strong customer base, innovation and creativity has provided
Billington Structures with year on year growth, coupled with a steady and
reliable profit stream. The company's turnover has grown from �16 million in
1997 to over �50 million today and profit before tax from �1.2 million to �4.5
million in the same period. Billington Structures has a blue chip customer base
including Balfour Beatty, Bovis, HBG, ISG, Kier, Laing O'Rourke, Mace, Shepherd,
Sir Robert McAlpine and Wates.
Computer modelling has enabled Billington to successfully complete a whole host
of complex landmark buildings. Furthermore, Billington's achievements have
received industry recognition winning Steelwork Contractor of the Year,
Specialist Contractor of the Year and IT Innovator in recent years.
Billington is seen as a leader in its market and as an example of its innovative
approach it has developed easi-edge, a safety solutions provider to the
construction industry, based in Tuxford and Bristol. Over 70 km of edge
protection barriers are in daily hire use across the country delivering a
recurring revenue stream. Other products in the easi portfolio include
Trailarrest, which protects operatives from falls from vehicles and Coresafe, a
gate system for lift shaft protection during construction. Manufacture is
generally in-house and patents have been gained or are pending for the majority
of easi products. easi-edge is an associate member of the British
Constructional Steelwork Association with whom it has achieved silver status for
sustainability. It is a founder member of the Edge Protection Federation and
has Quality Assurance and Environmental accreditation to ISO 9001 and 14001
respectively.
The easi-edge safety solution business provides an opportunity for future growth
with an innovative and expanding product range in a growing market. The Group
will be looking to expand operations in this area to take advantage of and
expand on the foothold gained into this market.
Billington has managed Hollybank Engineering Ltd, based in Tuxford, North
Nottinghamshire, for a considerable number of years. Hollybank remains the
supplier of choice for steel underground support arches to the UK mining
industry. Recent times have seen an upsurge in the requirement for underground
steelwork to a wide variety of mining and civil engineering contractors.
Additionally, Hollybank manufactures some of easi-edge's products, all in
accordance with its ISO 9001 and 14001 accreditations.
Dosco Overseas Engineering Ltd, also based at Tuxford, has a worldwide
reputation for the design and manufacture of roadheading and tunnelling
equipment for the mineral mining and civil markets. The company was established
in the early 1950's by Dominion Steel and Coal Company of Canada to market the
Dosco miner into the UK coal mining industry and since that time has gone on to
manufacture and supply over 3,000 machines to clients around the world. Since
the demise of the UK coal mining industry the company has diversified its
markets and now generates some 85% of its business from overseas including the
major coal producing countries of China, Russia, USA and India.
Dosco's products are not just limited to coal mining; they have also introduced
machines for use in high volume production of a range of minerals as well as
machines for various types of civil construction. Dosco is also accredited to
ISO9001 and as such maintains an independent quality assurance department,
responsible for all aspects of a machines design, manufacture and installation
in the field. Dosco is also accredited and certified to IS014001 demonstrating
the company's commitment to improving its environmental and conservation
performance by minimising waste, controlling pollution and protecting natural
resources.
Board of Directors
The Retained Group board will comprise:
Peter Hems, Executive Chairman
Stephen Fareham, Managing Director
Peter Hart, Finance Director
Mike Fewster, Operations Director
John Gordon, Non-executive Director
Mike Speakman, Non-executive Director
Directors' Biographies
Peter Hems - Executive Chairman
Peter (aged 59) joined the board on 1 April 2007. He is a chartered accountant
who has spent most of his career as a business and advisory partner with Grant
Thornton until he resigned in March 2007 to take up this role.
Steve Fareham - Managing Director
Steve (aged 57) has 40 years experience in the steelwork industry. He is a
Chartered Structural Engineer, a Chartered Health and Safety Practitioner, has a
first class honours degree in Civil Engineering and a masters degree in Health
and Safety Management. He is a former president (2000-2003) of the UK steel
contractors trade body BCSA, a past chair of the National Steelwork Contractors
Group, member of the BCSA H&S Committee, and a founder member of the Edge
Protection Federation.
Peter Hart - Finance Director
Peter (aged 59), a member of the Chartered Institute of Management Accountants
has 19 years experience with Billington, and had previously worked in the mining
machinery and aerospace industries. He is also Chairman of the Trustees of
Dosco Overseas Engineering Ltd Pension Scheme and a member of the BCSA
Sustainability Working Group.
Mike Fewster - Operations Director
Mike (aged 60) is a Chartered Civil and Structural Engineer with 25 years
experience in the steel construction industry. He is a member of many industry
committees and is chairman of the Steel Connections Group and a past Chairman of
the Northern BCSA.
John Gordon - Non-executive Director
John (aged 41) practised as a barrister from 1989 until 1999 when he
re-qualified as a solicitor. John is in private practice as a partner in
Crichtons Solicitors LLP, specialising in commercial and property litigation.
He was appointed to the board in 2007, and his legal-commercial background makes
him a valuable member of the team.
Mike Speakman - Non-executive Director
Mike (aged 72) is a Fellow of the Institute of Civil Engineers and a Fellow of
the Chartered Institute of Building. He first joined the group Board in 1996
and has had a number of roles both as an executive and later as a non executive
director. Mike's experience over many years is wide ranging and he continues to
be an important member of the team. Prior to joining Amco Group, Mike was Chief
Executive of the Stepney Group of Companies.
Information about the exiting group
The exiting group comprises the following principal companies and their
subsidiaries:
Company Activity
Amco Property Investments Ltd Group property investments
Amco Developments Ltd Property development
Amalgamated Construction Ltd Specialist engineering
Amco Plastics Ltd Plastic products
Amco Interinvest Ltd Motor leasing
Amco Insurance Co Ltd Provider of insurance to group companies
The unaudited combined profit after taxation of these companies for the year
ended 31 December 2007 was �1.1 million. The unaudited combined net assets of
these companies as at 31 December 2007 was �17.0 million.
This result is net of a provision of �1.2million (net of tax) for overseas
withholding tax that should have been deducted by a customer in relation to a
drilling contract. The claim by the customer has been strenuously resisted, but
after commercial negotiation a new schedule of rates and an extension to the
contract term has been agreed in return for which Amalgamated Construction Ltd
has agreed to accept responsibility for the overpayment and to repay this to the
customer over the revised term of the contract.
The price agreed for the exiting group has been arrived at taking into account
the assets and earnings of the underlying businesses and the new owners taking
on responsibility for the relevant pension scheme. The exiting group has
assumed responsibility for the Amco Defined Benefit Pension Scheme which was
showing a small surplus on an FRS17 basis at 31 December 2007 and a deficit of
between �5.3million and �8.0 million on a buy out basis depending on the
assumptions used. Around 20% of this potential liability will remain with the
Retained Group relating to employees of Billington Structures Ltd.
Amco Corporation has an Employee Share Ownership Plan (the "ESOP") whose assets
at present are shares in the Company and cash. The terms of the disposal
provide for the apportionment of those assets (after settling certain costs and
liabilities of the ESOP) as to two thirds remaining with the ESOP for the
benefit of Group employees and one third to a similar scheme to be established
by Newco for the benefit of its employees. Such an apportionment will only be
made to the extent that the ESOP has cash.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
DISGUUUPCUPRGPW
Ashcourt (LSE:ARP)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ashcourt (LSE:ARP)
Historical Stock Chart
From Jul 2023 to Jul 2024
