RAF Real Affinity

RNS Number:4559T
Real Affinity PLC
30 April 2008


30 April 2008



                          Real Affinity (the "Company")

     Proposed disposal of Conferracom Limited and notice of General Meeting
     ----------------------------------------------------------------------
                                        
Real Affinity plc ("Real Affinity"), the AIM-listed marketing services group,
announces that it has agreed, conditional upon shareholder approval, to dispose
of the entire issued share capital of Conferaccom Limited ("Disposal")
("Conferaccom") a company which trades under the name of "Venues Unlimited" to
Checkbase Limited ("Checkbase").

Real Affinity acquired Conferaccom from Anita Mary Lowe and Christopher Parkes
Lowe (the "Lowes") on 30 June 2006. Checkbase is a company controlled by the
Lowes, who are also directors of Conferaccom.

The consideration for the Disposal ("Consideration") is #1 plus the assumption
by Checkbase of Real Affinity's responsibility for repayment of the intra group
balance owed by Real Affinity to Conferaccom as at completion of the Disposal
("Intra Group Loan" and "Completion").  Real Affinity has agreed to pay the
excess of the Intra Group Loan above #2,100,000 to Checkbase (to the extent
required) by four monthly payments of #50,000 (commencing 31 May 2008), together
with a payment of the balance on 29 August 2008. The net effect of this is that
Real Affinity will have reduced its liabilities by a maximum of #2,100,000. To
the extent that Intra Group Loan exceeds #2,810,000 Real Affinity shall pay the
excess to Checkbase at Completion.

The Consideration may be subject to an adjustment following the determination of
the aggregate value of the assets minus the aggregate liabilities of Conferaccom
as at 29 February 2008 (the "Net Asset Value").  If the Net Asset Value is
greater or less than #500,000, there will be a corresponding adjustment in the
amount of the Consideration.

In addition Real Affinity has agreed to surrender tax losses to Conferaccom to
reduce Conferaccom's corporation tax liability for the year ended 31 March 2008
to nil (estimated at #41,000).

Real Affinity has also agreed to pay #300,000 to the Lowes at Completion in
final settlement of all remaining consideration due in relation to the original
acquisition of Conferaccom by Real Affinity from the Lowes.

The Disposal is a related party transaction pursuant to the AIM Rules. The
directors consider, having consulted with HB Corporate, Real Affinity's
nominated adviser, that the terms of the Disposal are fair and reasonable
insofar as the Shareholders are concerned. In advising the directors, HB
Corporate has taken into account the commercial judgement of the directors.

Financial information on Conferaccom

A summary of Conferaccom's financial performance and net asset position as
extracted from its recent accounts for the year ended 31 March 2007 is as
follows:

 
+---------------+--------------------------+--------------------------+
|               |      31 March 2007       |      31 March 2006       |
|               |                          |                          |
|               |           (#)            |           (#)            |
+---------------+--------------------------+--------------------------+
|   Turnover    |        14,167,000        |        12,214,000        |
+---------------+--------------------------+--------------------------+
|   Operating   |         248,000          |         105,000          |
|    Profit     |                          |                          |
+---------------+--------------------------+--------------------------+
| Profit Before |         319,000          |         161,000          |
|      Tax      |                          |                          |
+---------------+--------------------------+--------------------------+
| Profit After  |         280,000          |         131,000          |
|      Tax      |                          |                          |
+---------------+--------------------------+--------------------------+
|  Net Assets   |         331,000          |          51,000          |
+---------------+--------------------------+--------------------------+

 



Reasons for the proposed disposal

 

The directors believe that the lower margin returns from Conferracom will not be
core to Real Affinity's group in the future and that it is in the best interests
of Real Affinity shareholders to complete the Disposal. They also believe that
it is in the best interests of Real Affinity shareholders for Real Affinity to
dispose of substantially all of its business activities with a view to being
deemed an investing company under the AIM Rules.

The approval of Real Affinity shareholders to the Disposal is being sought under
the AIM Rules and their approval, in due course, is likely to be required in
relation to further disposals. If the result of such disposals is that Real
Affinity would be deemed to have become an investing company (under the AIM
Rules), shareholders' approval will also be sought to Real Affinity's investing
strategy as an investing company, details of which will be set in a further
circular to shareholders convening a further general meeting.

Real Affinity's remaining businesses operating under the 'Real Affinity Agency'
brand comprise principally direct and digital marketing services.

The proceeds arising from the Disposal will be used for working capital
purposes.

A circular to Real Affinity shareholders will be posted shortly convening a
general meeting at which a resolution to approve the Disposal will be proposed.
The general meeting is scheduled to take place on 19 May 2008 and subject to
shareholders passing the resolution, Completion will take place on or by 21 May
2008.

For further information contact the following:

Real Affinity: Martyn Archer

Brent Fitzpatrick

0113 290 8730

 

HB Corporate: Edward Hutton

020 7510 8600

 

 



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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