Disposal of Feedback Instruments Limited (9727D)
24 May 2012 - 12:58AM
UK Regulatory
TIDMFDBK
RNS Number : 9727D
Feedback PLC
23 May 2012
23 May 2012
Feedback plc
("Feedback", the "Company" or the "Group")
Disposal of Feedback Instruments Limited
The Company announces that it has today completed the sale of
Feedback Instruments Limited and Feedback Inc. to Feedback
Strategic Improvement Ltd, a newly incorporated subsidiary of LD
Didactic GmbH for a total consideration of approximately GBP260,000
(the "Disposal") comprising a nominal consideration in respect of
the shares in each company and a repayment of GBP260,000 of the
Group's indebtedness.
Reasons for the Disposal
As reported, in the Chairman's statement that accompanied the
half yearly results for the six months ended 30 November 2011,
Feedback Instrument Limited and Feedback Inc have continued to
suffer the legacy effects of previous years' under-investment in
research and development and sales activity.
The Board anticipates that Feedback Instruments Limited and
Feedback Inc will continue to generate operating losses in the
current financial year and into the medium term. The operating
losses are now at a level which are unsustainable and the Board has
taken the necessary action to stem those losses and resultant cash
outflow by disposing of the businesses.
In the year ended 31 May 2011 Feedback Instruments Limited
generated a turnover of GBP4,514,000 and an operating loss of
GBP586,000 before taxation and the write-back of an intercompany
loan, and had net assets of GBP37,000. In the same period Feedback
Inc generated a turnover of $1,156,000 and operating profit before
taxation of $64,000, with net assets of $341,000.
Following the Disposal the Company intends to concentrate on its
remaining operating businesses, Feedback Data Limited and Feedback
Black Box Company Limited. Significant investment has been seen in
each of these businesses in the last six months and the Company
remains confident that these businesses, given the renewed focus
following the Disposal, will generate shareholder value in the
medium term.
Commenting on the announcement:
Nick Shepheard, Executive Chairman, said;
"It has been a very difficult and challenging last five years
for Feedback and in particular for our education businesses. The
losses arising from these two businesses were not sustainable in
the short term without a significant injection of capital. These
two businesses have a history that dates back to 1958 and it is
very sad that we have to take these steps to secure the future of
the remaining businesses but the lack of investment in product
development over many years has meant that these companies are
unable to compete effectively in the current marketplace. We remain
cautiously optimistic that the remaining businesses, with the
renewed focus of the Board, will be able to achieve growth in the
medium term".
For further information contact:
Feedback plc Tel: 01892 653
322
Nick Shepheard
Merchant Securities Limited (Nominated Adviser and Broker)
Simon Clements/Lindsay Mair Tel: 020 7628
2200
This information is provided by RNS
The company news service from the London Stock Exchange
END
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