Ekay joins AIM
January 05 2006 - 3:01AM
UK Regulatory
RNS Number:4722W
Ekay plc
05 January 2006
Press Release 05 January 2006
Ekay plc
("Ekay" or "the Company")
Ekay joins AIM
First day of dealings on AIM
Ekay plc, the full-service advertising agency targeting the SME sector, today
announces Admission and commencement of dealings of its Ordinary shares on AIM.
Shore Capital & Corporate Limited is acting as Nominated Adviser and Broker to
Ekay. The stock market EPIC is EKY.L.
Placing Statistics
Placing Price 21.5p
Number of Ordinary Shares in issue before the Placing 35,219,450
Number of Ordinary Shares to be placed on behalf of the
Company 651,163
Number of Ordinary Shares to be issued in connection with
investment 1,162,790
Market capitalisation at the Placing Price on Admission #7,962,181
Number of Ordinary Shares in issue immediately following the
Admission 37,033,403
Estimated net proceeds of the Placing receivable by the
Company #140,000*
Percentage of enlarged ordinary issued share capital subject to 1.76 per cent
the Placing
EPIC EKY.L
* In addition, #250,000 of convertible loan drawn on 25 November 2005 will also
convert into new ordinary shares on Admission
Reasons for the Placing and Admission
Ekay is intending to use the monies raised for working capital purposes. In
addition, the AIM admission will enable Ekay to further develop its business,
facilitate the next stage of the Company's growth and enable the Company to make
strategic acquisitions.
Eddie Powell, CEO of Ekay, said: "We are delighted to see the start of dealings
in Ekay shares on AIM, and the listing provides us with the opportunity to reach
the next stage of growth. We have successfully grown the business in a
relatively static market through innovation by providing consistent results for
our clients. In the last three years we have seen double digit and profitable
growth through targeting the SME market and focusing our services on providing a
quantifiable return on investment for its customers."
Media planning and buying accounts for 80% of Ekay's turnover and encompasses
broadcast, direct marketing, outdoor, online, print and press. In addition, Ekay
advises on marketing research and design. The Company also has a strong record
of introducing SMEs to advertising mediums, such as broadcast, which have
traditionally been the preserve of large budgets and big brands. To this end
Ekay has helped SMEs become leading brands and household names through targeted
and cost effective advertising strategies that focus on lean budgets, innovation
and return on investment.
Ekay has a strong management team with considerable experience in the
advertising and media industry.
Eddie Powell, the founding Director and CEO of Ekay, has worked in advertising
sales at Mirror Group for 15 years, specialising in the financial services
sector and the agencies that catered for companies in that sector. He founded
Ekay advertising in 1994 based on the experience he gained whilst working for
the national press. In 1999 he formed Ekay Advertising & Marketing Limited and
developed it into its present form.
The Board is further strengthened by the recent appointment of Tony Sullivan as
a non-executive Chairman. Anthony David Sullivan, 55, has 30 years experience in
the advertising and media industry and has represented the interests of the
Association of Media Independents on the Council of the Advertising Association.
In 1999 Mr Sullivan led the management buy-out of Media Campaign Services and in
June 2004 led MCS's acquisition of Squires Robertson Gill.
Eddie Powell added: "Tony has considerable experience in media, PLCs and M&A
transactions which will be invaluable to our strategy going forward."
For further information:
Ekay plc
Eddie Powell, Chief Executive Officer Tel: +44 (0) 1474 334 343
eddie.powell@ekay.co.uk http://www.ekay.co.uk
-------------------------- ------------------------
Shore Capital Tel: +44 (0) 207 408 4090
Guy Peters, Corporate Finance www.shorecap.co.uk
guy.peters@shorecap.co.uk
----------------------------
Dru Danford, Corporate Finance
dru.danford@shorecap.co.uk
Media enquiries:
Abchurch
Heather Salmond / Ariane Comstive / Franziska Tel: +44 (0) 20 7398 7700
Boehnke www.abchurch-group.com
heather.salmond@abchurch-group.com
--------------------------------------- --------------------------
Summary
Ekay is an advertising and marketing agency which specialises in advising
clients on the use of television, national and local press, magazines, the
internet, direct mail and posters, for business development purposes. Ekay has
particular expertise in direct marketing. Direct marketing uses select media to
target a specific audience, with the aim of encouraging a response from the
consumer, typically an enquiry for a product or service. An advantage of this
type of media is that it facilitates the clients' ability to measure the level
of response generated by their advertising spend, allowing them to calculate a
more accurate return on investment, a feature which the Board believes
differentiates Ekay's product offering relative to other marketing forms.
Ekay offers a complete direct marketing solution to its clients, utilising a
range of advertising methods and direct mail solutions. In addition to advising
on strategy, the Company also offers a complete design and media buying service.
Ekay has a graphics department, in-house print consultancy and on-line analysis
and marketing consultancy enabling it to provide clients with comprehensive
solutions.
The Company's largest media activity at present is in television, where the
Board believes that the Company is a recognised expert and a market leader in
its niche direct marketing sphere. The Board believes that new media marketing
campaigns, including activities such as SMS text messaging, web advertising and
the effective use of web site design are increasingly being adopted by corporate
users. The Directors anticipate that new media will be the Company's fastest
growing area of activity over the next few years.
The Market
Advertising expenditure in the UK has increased by 5.6 per cent. to #18.4
billion in 2004. This growth is anticipated to continue during the next few
years. In the Directors' opinion, the following market developments are moving
in Ekay's favour at a difficult time in the UK advertising cycle:
- the growth of digital new media, providing new opportunities both organically
and through potential business acquisition and consolidation;
- recent and proposed changes in financial regulation, impacting advertising by
financial service providers;
- the proposed 'switch off' of analogue terrestrial TV channels - Ekay is a
specialist in the digital TV market where more focused audiences allow greater
targeting opportunities; and
- technology improvements in media allowing an increased focus in targeted
marketing, Ekay's core area of competence.
- the postal service for direct mail; and
- new media including interactive television & text services, the internet and
web advertising.
The Directors are of the opinion that in order to stay competitive, media
agencies will require comprehensive solutions for their clients that go beyond
the normal media channels.
Ekay's positioning in the market
Ekay is a specialist in direct response advertising. This is the process of
providing advertising through media targeted at a specific audience, with the
aim of creating a direct response from the consumer, typically an enquiry for a
product or service. Ekay offers a complete direct marketing solution to its
clients, utilising both 'off the page' advertising and direct mail solutions. An
advantage of direct response is its easy measurement of effectiveness, relative
to other marketing forms. The Company offers a complete design and strategy
service, for its clients. Ekay has a history of stable long-term relationships
with its client base.
Specific advertising media employed by Ekay's clients include:
- broadcast media (including both television and radio);
- newspapers at a national and a regional level;
- magazines;
- outdoor;
- the postal service for direct mail; and
- new media including interactive television & text services, the internet and
web advertising.
Under the Company's business model, the majority of Ekay's revenue is generated
in commissions, paid by the media owners of the advertising space utilised. Ekay
has a strict policy of media impartiality for its clients and no media space is
booked in advance of establishing clients' requirements, ensuring the most
suitable media is always utilised under the agreed promotional strategy.
In addition the Company generates revenue through charges for its design and
consulting services. The Directors believe this has fostered the Company's
reputation and its long standing relationships with its clients.
Ekay's historic customer base comes from the financial services sector,
typically sub-prime brokers, debt consolidators and mortgage brokers. Through
recent client wins Ekay's portfolio has expanded to include national car
dealership chains, laser eye surgery clinics, and a major out-of-town shopping
centre. The SME sectors are prime users of direct response advertising and are a
major target market segment for the Company.
Competition
In the Directors' opinion the largest advertising agencies, which account for a
large proportion of all advertising booked in the UK, generally handle the large
international and top spending client brands, whilst the independent agencies
generally target national, regional and local brands and services. Ekay can and
does compete against larger advertising agencies and has recently won business
in competition with several larger agencies. Nevertheless, the Directors
consider all other advertising agencies to be the Company's competitors.
Typical clients
Ekay has been especially successful in winning owner-managed businesses as
clients, particularly those businesses which are new to advertising. The Company
encounters competition at all stages for such client accounts especially when
they grow to a substantial level, which is then likely to make those accounts
attractive to the larger agencies. By that stage the client and Ekay have built
a strong relationship, and developed a solid understanding of the client's
business and requirements. Recent client wins, during the past few months have
further diversified Ekay's client base to include several non-owner managed
corporations. Examples of such recent wins are a number of national car
dealership chains, a major out-of-town shopping centre in Essex, and a
specialist ring tone provider for mobile phones. In addition the Company is
currently in discussions with a number of potential clients in areas as diverse
as a cosmetics retailer, a commercial vehicle manufacturer, a food processor
manufacturer and a personal injury claims company.
Directors
Anthony David Sullivan (55), Non-Executive Chairman.
Tony has 30 years experience in the advertising and media industry. For several
years he represented the interests of the Association of Media Independents on
the council of The Advertising Association. In 1999, Tony led the management
buy-out of Media Campaign Services Limited and in 2001 he led that company's
acquisition of Squires Robertson Gill.
Edward Kenneth Powell (46), Chief Executive.
Eddie has worked in advertising sales at Mirror Group Newspapers for 15 years,
specialising in the financial services sector and the agencies which catered for
companies in that sector. He founded Ekay advertising in 1994 based on the
experience he gained whilst working for the national press. In 1999 he formed
Ekay Advertising & Marketing Limited and developed it into its present form.
Terence Michael Rose (43), Managing Director.
Terry has experience in selling advertising airtime for broadcast television,
having worked in senior sales positions for a range of companies selling
advertising airtime on the ITV network (from 1983 to 1995) and Sky Television
(from 1995 to 2001). He joined Ekay in December 2001.
John Stanley McCormack (64), Production Director.
John has worked for 30 years in print and advertisement production for The Times
and Mirror Group Newspapers. He joined Ekay on 1 January 2002.
Stuart Richard Cumberland (36), Finance Director.
Stuart is co-founder and a partner in Olivine Partners LLP, a specialist
corporate finance and tax advisory practice based in London. Stuart has formerly
held corporate finance roles in Mazars and Ernst & Young and founded the
corporate finance department at Morley and Scott. He has been working with Ekay
on a part-time basis since January 2005 and joined the Board on 1 October 2005.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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