TIDMVLTY
RNS Number : 4707O
Veltyco Group PLC
30 January 2019
30 January 2019
Veltyco Group plc
("Veltyco", the "Company" or the "Group")
GBP0.5 million Subscription, Update on Receivables and Board
Changes
Veltyco Group plc (AIM:VLTY), the online marketing and operating
company for the gaming industry, is pleased to announce that it has
raised GBP0.5 million (before expenses) through a subscription with
certain existing investors at a price of 15 pence per share (the
"Issue Price") (the "Subscription").
The Company also provides an update on its operations and
receivable position, as well as changes to its Board.
The Subscription
The Company has raised GBP0.5 million through the subscription
of 3,333,333 new ordinary shares of no par value ("Ordinary
Shares") (the "Subscription Shares"), with certain existing
investors, at the Issue Price. The Issue Price represents a 57.9
per cent. premium to the Company's closing middle market share
price of 9.5 pence on 29 January 2019, being the last practicable
business day prior to this announcement.
Update on operations and use of proceeds
Following receipt of the proceeds of the Subscription, the
Company will have cash resources of approximately EUR0.8
million.
The net proceeds of the Subscription will be utilised to provide
general working capital to the Group and to pursue the recovery of
the overdue receivable balances owed to the Group.
In addition, the Board will invest in the launch of its own
regulated online financial trading brand, which is expected to be
launched during Q1 2019, as announced on 31 December 2018.
Given the difficulty in receiving funds from the Group's lottery
vertical, the Board is restructuring these operations to engage an
alternative operator. Following the restructuring, the Board is
proposing to invest in the marketing of the Group's re-launch of
its lottery vertical expected during Q2 2019.
Trading in the Group's sportsbook and casino vertical remains in
line with management expectations.
Update on receivables
Following the Group's decision to stop marketing activities in
the online financial trading vertical, as announced on 22 November
2018, and with no further payments having been received from either
Celestial Trading Limited ("Celestial") or Altair Entertainment
N.V. ("Altair") in the intervening period, the Board has now
resolved not to recognise further revenues, capping its receivable
position in respect of this vertical.
As a result, the Group's overall outstanding receivable balance
increased marginally from EUR10.6 million as at 20 November 2018
to, in aggregate, EUR10.9 million as at 31 December 2018 as a
result of invoices issued in the normal course in the casino and
sportsbook vertical. Of this figure, EUR9.3 million remains
outstanding in respect of the online financial trading vertical,
with EUR6.8 million being overdue from Celestial, with EUR1.5
million relating to activities in 2017 and EUR5.2 million relating
to activities in 2018, and EUR2.5 million being overdue from
Altair. The remainder of the balance, being EUR1.6 million, relates
predominately to the Group's lottery vertical, operated by Altair,
with such payments now being overdue.
Given the above, the Board is taking appropriate legal action in
respect of recovering these outstanding amounts. However, there can
be no certainty that the Group will be able to recover all, or any,
of the monies due to it from Celestial and/or Altair. The Board has
therefore concluded that if the current position prevails, it will
need to impair the outstanding receivables due from both Celestial
and Altair, together with an impairment of related intangible
assets in this vertical, which will result in a material impairment
charge in the Group's audited results for the financial year ended
31 December 2018, resulting in a significant net loss for the year
and reduced reserves.
Board changes
The Board is pleased to announce that Paul Duffen will join the
Board and is appointed as Non Executive Chairman with immediate
effect. Paul brings 35 years in management experience in various
industries and, being an entrepreneur, he is very much welcomed by
the Board.
Paul was co-founder and Chief Executive Officer (until 2006) of
Catalyst Media Group plc, which specialised in the sports, media
and entertainment sectors, including motor racing in the USA and
Horse Racing in the UK. He subsequently served as Executive
Chairman of Hull City Football Club, securing their first promotion
to the Premier League in 2008 and Chairman of Newsdesk Media Ltd,
an international publishing Group. He currently serves as a
non-executive Director of Animus Associates Ltd, a business
intelligence consultancy, and has recently joined the Board of
eSports.com Group Ltd.
The Company also announces that current Non-Executive Chairman,
Gilles Ohana, has informed the Board of his decision to step down
from the Board with immediate effect. The Board has accepted his
resignation and would like to thank Gilles for his contribution to
the Group over the last year and wishes him every success in the
future.
Furthermore, the Company confirms that it intends to appoint an
additional independent Non-Executive Director in due course.
In addition, the Board has commenced discussions with potential
CEO candidates to join the Board. This process has the highest
priority for the Board and we will make further announcements in
due course as and when appropriate.
Additional information on Mr Paul J. Duffen
The following additional information is provided in accordance
with paragraph (g) of Schedule Two to the AIM Rules for
Companies:
Paul Jeremy Duffen (aged 60)
Current Directorships/Partnerships Past Directorships/Partnerships
(last 5 years)
Animus Associates Limited Centipede Ventures Limited
eSports.com Group Limited Clinker Limited
Paul Duffen Associates Limited Excellence First Limited
Star Corporate Services Limited Ignition Leasing Limited
Tiger Nation Enterprises Limited Juicemaster Juicebars Limited
Maddox Advisors (UK) Limited
RISC Management Limited
The Magazine Networks Limited
Centipede Ventures Limited, a company of which Paul Duffen was a
director, filed for voluntary liquidation in July 2008. The
liquidation process was undertaken by an appointed joint liquidator
and was completed on 21 February 2017 with a shortfall of GBP3.77
million, of which approximately GBP3.7 million was due to HMRC,
with the remainder being due to trade and expense creditors.
RISC Management Limited, a company of which Paul Duffen was a
director, appointed an administrator in February 2014. The process
is ongoing and whilst the final position is not yet known, it is
likely there will be a shortfall to creditors.
There is no other information that is required to be disclosed
pursuant to paragraph (g) of Schedule Two to the AIM Rules for
Companies.
Fee shares
The Board has resolved to issue 200,000 new Ordinary Shares to
an adviser in lieu of certain fees (the "Fee Shares").
Application to trading on AIM
The Subscription is conditional on the admission of the
Subscription Shares to trading on AIM. Application will be made to
the London Stock Exchange for the Subscription Shares and the Fee
Shares to be admitted to trading on AIM ("Admission"). It is
expected that Admission will become effective and that dealings in
the Subscription Shares and Fee Shares will commence at 8.00 a.m.
on 5 February 2019.
Following the issue of the Subscription Shares and the Fee
Shares, the Company's total issued share capital will consist of
78,489,492 Ordinary Shares with voting rights.
The Company does not hold any Ordinary Shares in treasury and
accordingly there are no voting rights in respect of any treasury
shares. The Subscription Shares will be fully paid and will rank
pari passu in all respects with the Company's existing Ordinary
Shares.
On Admission of the Subscription Shares, the abovementioned
figure of 78,489,492 Ordinary Shares may be used by shareholders in
the Company as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in, Veltyco under the Financial Conduct
Authority's Disclosure and Transparency Rules.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information please contact:
Veltyco Group Plc +44 (0)1624 605 764
Paul Duffen, Chairman
Marcel Noordeloos, Chief Financial Officer
Strand Hanson Limited (Nominated Adviser) +44 (0)20 7409 3494
James Harris / Richard Tulloch / James Dance
Whitman Howard Ltd (Broker) +44 (0)20 7659 1234
Nick Lovering / Christopher Furness
IFC Advisory (Financial PR & IR) +44 (0)20 3934 6630
Graham Herring / Miles Nolan / Zach Cohen
About Veltyco
Veltyco is a group of companies focused on generating marketing
leads and entering into marketing contracts for the activities of
various partners in the gaming industry as well as operating its
own brands. Veltyco focuses on complementary activities under one
umbrella, leveraging its historical cash generative activities of
marketing online casinos and sports betting.
Website: www.veltyco.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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