TIDMMAN
RNS Number : 9379K
Manroy PLC
30 June 2014
30 June 2014
Manroy Plc
Announcement of results for the six months ended 31 March
2014
Manroy Plc ("Manroy" or the "Group") (AIM: MAN), the AIM quoted
UK defence contractor, announces its unaudited half yearly
financial report for the six months ended 31 March 2014.
On 28 March 2014, Manroy announced the terms of a recommended
cash offer from FN Herstal SA for the entire issued share capital
of Manroy at 85p per share, valuing Manroy at GBP16.2 million. The
Offer Document from FN Herstal was issued on 25 April 2014 and at
the Second Closing date of 30 May 2014, acceptances had been
received from 95.4% of the Company's issued share capital.
For further information please contact:
Manroy Plc Tel 01252 874177
Glyn Bottomley, Chief Executive
Paul Carter, Finance Director
Allenby Capital Tel: 020 3328 5656
Alex Price
Michael McNeilly
Bankside Consultants Tel: 07515 587 184 /
Richard Pearson 07703 167 065
Simon Rothschild
Chairman's Statement
Introduction
During the six months ended 31 March 2014, Manroy continued its
UK operations in line with previous periods. In addition, the
further focus of the Board was in securing the cash offer from FN
Herstal SA ("Herstal") which was announced on 28 March 2014.
Cash offer by Herstal for Manroy
On 28 March 2014, Herstal announced their Offer for the entire
issued share capital of the Company at the Offer Price of 85p per
share, valuing the Company at GBP16.2 million. The Offer
represented a premium of 52% to the Closing Price on 25 November
2013 (being the last Business Day prior to commencement of the
Offer Period). The terms of the Offer and the Board's
recommendation to Shareholders to accept the Offer were included in
the Offer Document issued by Herstal on 25 April 2014.
At the Second Closing Date of 30 May 2014, acceptances had been
received by Herstal from shareholders representing 95.4% of
Manroy's issued share capital, enabling Herstal to declare the
Offer unconditional as to acceptances. The Offer remains subject to
the remaining Conditions set out in the Offer Document and
therefore the Offer has not yet become or been declared
unconditional in all respects. In particular, the Offer is
conditional on the Competition and Markets Authority (the "CMA")
indicating in terms satisfactory to Herstal that it does not intend
to make a Phase 2 CMA reference of the Offer. Herstal and Manroy
have been in constructive discussions with the CMA and will provide
further updates on the Offer at the appropriate time.
MUSA
During the six months ended 31 March 2014, MUSA continued to be
frustrated by the FAA process for the contracts novated from Sabre
in April 2012, though as announced in December 2013, MUSA achieved
FAA approval for 34% of the $10.6m of novated contracts.
Herstal had no strategic interest in MUSA and they required the
Group to dispose of its 49% interest in MUSA before they would make
the Offer. Despite entering into negotiations with a number of
different parties over a sale of this interest during the period
August 2013 to February 2014, these negotiations did not result in
a firm offer for the Company's interest in MUSA. By late February
2014, in order to preserve the Offer for the benefit of
Shareholders, it became necessary to dispose of the Group's
interest in MUSA at a nominal value. This disposal was concluded on
28 March 2014 and reflected as an impairment provision in the
results for the year ended 30 September 2013 which were finalised
on that day.
Results
In the six months ended 31 March 2014, Manroy generated total
revenues of GBP4.8 million compared with GBP4.1 million in the same
period last year. After amortisation of intangible assets of
GBP0.6m, provisions of GBP1.0m for costs associated with the Offer
and a further GBP1.0m for repayment of guarantees and liabilities
associated with the disposal of MUSA as outlined in the Offer
Document, the six month period resulted in a loss after tax of
GBP2.0m (March 2013: loss of GBP0.7m). The fully diluted loss per
share was 10.7p compared with a fully diluted loss per share of
3.8p in March 2013.
Operations
The main operational highlights in the first six months of the
financial year were the successful delivery of our new General
Purpose Machine Gun product ("GPMG"), the continued development of
our new military rifle product, continued order generation and the
ongoing site consolidation planning.
The challenges faced during the year ended 30 September 2013 in
the production of the GPMG product have primarily been addressed
and we are now delivering against the order book with revenue
generation being heavily weighted to the second half of the year.
Deliveries against the GBP6.1m military rifle order have now
commenced. The order book continues to remain healthy,
Site consolidation
During the six months ended 31 March 2014, the Board concluded
that locating the Group's operations at one location would be
beneficial and additional premises within the Slade Green trading
estate have been acquired to enable this. The process of
integration is continuing as outlined in the Offer Document.
Conclusion
The offer by Herstal set out in the Offer Document dated 25
April 2014 represents good value for shareholders and is expected
to secure further growth and expansion across all areas of the
retained business.
Andrew Blurton
Chairman
30 June 2014
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months Six months Year ended
Notes ended ended 30 September
31 March 31 March 2013
2014 2013
GBP'000 GBP'000 GBP'000
Revenue
Trade revenues 2 4,842 4,023 8,755
Royalties and other income - 109 111
------------------------------------- -------- ----------- ----------- --------------
Total revenue 4,842 4,132 8,866
Cost of operations (2,967) (2,886) (6,180)
Gross profit 1,875 1,246 2,686
Administrative expenses (1,465) (1,051) (2,645)
Corporate acquisition costs - (66) (111)
Negative goodwill - 6 28
Amortisation of intangible
assets 4 (607) (529) (1,059)
Loss from operating activities (197) (394) (1,101)
Finance income - 54 77
Finance expense (48) (8) (60)
Loss before results from Associated
Company and Offer costs (245) (348) (1,084)
Share of results of Associated
Company - (468) (414)
Costs relating to strategic
review of Associated Company - - (275)
Impairment of investment in
Associated Company - - (4,846)
Settlement of guarantees and
liabilities of Associated
Company prior to disposal 11 (1,022) - -
Costs incurred on the Offer (1,000) - -
Loss before tax (2,267) (816) (6,619)
Tax credit 230 93 308
Loss after tax (2,037) (723) (6,311)
Other comprehensive income
Items that may be subsequently
reclassified to profit and
loss
Exchange movement on translation
of investment in Associated
Company 9 3 39 206
------------------------------------- -------- ----------- ----------- --------------
Total comprehensive loss for
the period attributable to
owners of the parent (2,034) (684) (6,105)
===================================== ======== =========== =========== ==============
Loss per share
Basic 3 (10.7p) (3.8p) (33.1p)
Diluted 3 (10.7p) (3.8p) (33.1p)
========= ======== ======= ========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
REGISTERED NUMBER: 2451413
31 March 31 March 30 September
Notes 2014 2013 2013
GBP'000 GBP'000 GBP'000
------------------------------- ------ --------- --------- -------------
Non-current assets
Goodwill 303 303 303
Intangible assets 4 6,804 7,408 7,254
Property, plant and equipment 6 1,008 791 721
Investment in Associated
Company 5 - 3,321 -
------------------------------- ------ --------- --------- -------------
8,115 11,823 8,278
------------------------------- ------ --------- --------- -------------
Current assets
Inventories 3,979 3,506 2,975
Trade and other receivables 1,973 5,792 3,012
Corporation tax receivable - 56 92
Cash and cash equivalents - 27 13
------------------------------- ------ --------- --------- -------------
5,952 9,381 6,092
-------------------------------
Total assets 14,067 21,204 14,370
------------------------------- ------ --------- --------- -------------
Current liabilities
Borrowings 7 (1,666) (1,610) (2,674)
Obligations under finance
leases - (15) (2)
Current tax liability - (59) -
Trade and other payables (4,149) (2,655) (1,864)
(5,815) (4,339) (4,540)
------------------------------- ------ --------- --------- -------------
Non-current liabilities
Borrowings 7 (686) (1,417) -
Obligations under finance - (72) -
leases
Deferred tax 8 (1,300) (1,650) (1,530)
------------------------------- ------ --------- --------- -------------
(1,986) (3,139) (1,530)
------------------------------- ------ --------- --------- -------------
Total liabilities (7,801) (7,478) (6,070)
------------------------------- ------ --------- --------- -------------
Net assets 6,266 13,726 8,300
=============================== ====== ========= ========= =============
Equity
Share capital 952 952 952
Share premium account 704 704 704
Other reserves 1,458 1,606 1,773
Retained earnings 3,152 10,464 4,871
Total equity 6,266 13,726 8,300
=============================== ====== ========= ========= =============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Merger Special Exchange Retained Total
capital premium reserve reserve movement earnings equity
account account reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- -------- -------- -------- --------- --------- -------
As at 31 March 2013 952 704 1,457 1 148 10,464 13,726
Loss for the six months
ended 30 September 2013 - - - - - (5,588) (5,588)
---------------------------------- -------- -------- -------- -------- --------- --------- -------
Other comprehensive
income
Items that will be reclassified
to profit and loss
Exchange movement on
translation of foreign
operations (note 9) - - - - 167 - 167
---------------------------------- -------- -------- -------- -------- --------- --------- -------
Total other comprehensive
income - - - - 167 - 167
Total comprehensive
income - - - - 167 (5,588) (5,421)
---------------------------------- -------- -------- -------- -------- --------- --------- -------
Transactions with owners
Share option charge
movements in reserves - - - - - (5) (5)
---------------------------------- -------- -------- -------- -------- --------- --------- -------
Total transactions with
owners - - - - - (5) (5)
---------------------------------- -------- -------- -------- -------- --------- --------- -------
As at 30 September 2013 952 704 1,457 1 315 4,871 8,300
Loss for the six months
ended 31 March 2014 - - - - - (2,037) (2,037)
---------------------------------- -------- -------- -------- -------- --------- --------- -------
Other comprehensive
income
Items that will be reclassified
to profit and loss
Exchange movement on
translation of foreign
operations (note 9) - - - - 3 - 3
Exchange movement transferred
on disposal of Associated
Company - - - - (318) 318 -
Total other comprehensive
income - - - - (315) 318 3
Total comprehensive
income - - - - (315) (1,719) (2,034)
---------------------------------- -------- -------- -------- -------- --------- --------- -------
As at 31 March 2014 952 704 1,457* 1* 0 3,152 6,266
================================== ======== ======== ======== ======== ========= ========= =======
*Disclosed as Other reserves totalling GBP1,458,000 in the
consolidated statement of financial position at 31 March 2014
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months Six months Year ended
ended 31 ended 31 30 September
March 2014 March 2013 2013
GBP'000 GBP'000 GBP'000
------------------------------------- ------------ ------------ --------------
Loss after tax for the period (2,037) (723) (6,619)
Adjustments:
Finance expense 48 8 60
Finance income - (54) (77)
Tax expense (230) (93) -
Negative goodwill - (6) (28)
Amortisation of intangible
assets 607 529 1,059
Share of results of Associated
Company - 468 414
Impairment of investment
in Associated Company - - 4,846
Exchange movements on consolidation 3 (170) 16
Share option charge - 8 3
Loss on disposal of fixed
assets - - 1
Depreciation of property,
plant and equipment 129 92 214
------------------------------------- ------------ ------------ --------------
Cash flows generated from
operations before changes
in working capital (1,480) 59 (111)
(Increase) / decrease in
inventory (1,004) (83) 449
Change in trade and other
receivables 913 (1,589) (299)
Change in trade and other
payables 2,413 88 (678)
------------------------------------- ------------ ------------ --------------
Cash generated from (used
in)/ operations 842 (1,525) (639)
Interest received - 54 77
Interest paid (48) (8) (60)
Tax refunded / (paid) 92 (1) (1)
------------------------------------- ------------ ------------ --------------
Net cash from / (used in)
operating activities 886 (1,480) (623)
------------------------------------- ------------ ------------ --------------
Cashflows from investing
activities
Investment in product development (157) (140) (516)
Acquisition of business
and assets of Base - (750) (753)
Proceeds from sale of tangible
assets - - 32
Purchase of property, plant
and equipment (417) (25) (110)
------------------------------------- ------------ ------------ --------------
Net cash used in investing
activities (574) (915) (1,347)
------------------------------------- ------------ ------------ --------------
Cashflows from financing
activities
Repayment of finance leases (2) (11) (97)
Repayments of bank loans (368) (863) (1,220)
New loans drawn 600 2,100 2,100
Net cash generated from
financing activities 230 1,226 783
------------------------------------- ------------ ------------ --------------
Net cash and cash equivalents
generated / (used) in period 542 (1,169) (1,187)
Opening cash and cash equivalents (901) 286 286
Closing net cash and cash
equivalents (359) (883) (901)
------------------------------------- ------------ ------------ --------------
Cash at bank and in hand - 27 13
Bank overdrafts (359) (910) (914)
--------------------------- ------ ------ ------
Closing net cash and cash
equivalents (359) (883) (901)
--------------------------- ------ ------ ------
Notes to the consolidated financial statements
1. Statement of accounting policies
Basis of preparation
Manroy Plc is a company incorporated and domiciled in the United
Kingdom. The address of the Company's registered office is 6
Lakeside Business Park, Swan Lane, Sandhurst, Berkshire GU47 9DN.
The consolidated half yearly financial report of the Company for
the six months ended 31 March 2014 comprises the results of the
Company and its subsidiaries (together referred to as the "Group").
The half yearly financial report has been prepared in accordance
with International Financial Reporting Standards as adopted by the
EU ("Adopted IFRS").
The results have been prepared on the basis of the accounting
policies adopted in the financial statements of Manroy Plc for the
year ended 30 September 2013.These policies have been applied
consistently in all material respects in the preparation of these
results unless otherwise stated. The half yearly financial report
has been prepared on a going concern basis and on a historical cost
basis as modified by the valuation of certain assets and
liabilities. This half yearly financial report is presented in UK
Sterling, which is the Company's functional currency. All financial
information has been rounded to the nearest thousand pounds.
2. Segmental information
The information used by the Board for the purpose of resource
allocation and assessment of segment performance undertaken by the
Group relates to the Group's core activity of a defence contractor.
The Group's revenue for the six months ended 31 March 2014 is
summarised below:
Region Six months Six months Year ended
ended ended 30
31 March 31 March September
2014 2013 2013
GBP'000 % GBP'000 % GBP'000 %
United Kingdom 1,346 28 730 18 1,679 19
Europe 1,800 38 786 20 1,582 18
North America 22 - 43 1 287 3
South America 21 - - - - -
Africa - - 117 3 - -
Asia and Australasia 1,653 34 2,347 58 5,207 60
---------------------- ----------- ---- ----------- ---- ----------- ----
Total trade revenue 4,842 100 4,023 100 8,755 100
Royalty income - 109 111
---------------------- ----------- ---- ----------- ---- ----------- ----
Total revenue 4,842 4,132 8,866
====================== =========== ==== =========== ==== =========== ====
3. Loss per share
Loss per share
The loss per share figures have been calculated as follows
Six months Six months Year ended
ended ended 30 September
31 March 31 March 2013
2014 2013
Basic earnings per
share
Loss per Consolidated
Income Statement GBP'000 (2,037) (723) (6,311)
Weighted average
number of shares
in issue during the
period '000 19,044 19,044 19,044
Loss per share Pence (10.7) (3.8) (33.1)
======================= ========= =========== =========== ==============
Diluted loss per share
The share options are antidilutive due to the loss for the
period, and therefore diluted loss per share is not
appropriate.
4. Intangible assets
Customer Developed Product Total
Trademarks relationships technology development
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 March 2013 548 6,871 1,684 687 9,790
Additions - - - 376 376
-------------------------- ------------- --------------- ------------ ------------- --------
At 30 September
2013 548 6,871 1,684 1,063 10,166
Additions - - - 157 157
-------------------------- ------------- --------------- ------------ ------------- --------
At 31 March 2014 548 6,871 1,684 1,220 10,323
-------------------------- ------------- --------------- ------------ ------------- --------
Accumulated amortisation
At 31 March 2013 205 1,545 632 - 2,382
Charge for the
period 45 344 141 - 530
-------------------------- ------------- --------------- ------------ ------------- --------
At 30 September
2013 250 1,889 773 - 2,912
Charge for the
period 45 344 141 77 607
-------------------------- ------------- --------------- ------------ ------------- --------
At 31 March 2014 295 2,233 914 77 3,519
========================== ============= =============== ============ ============= ========
Net book value
at 31 March 2014 253 4,638 770 1,143 6,804
========================== ============= =============== ============ ============= ========
Net book value
at
30 September 2013 298 4,982 911 1,064 7,255
========================== ============= =============== ============ ============= ========
Net book value
at
31 March 2013 343 5,326 1,052 687 7,408
========================== ============= =============== ============ ============= ========
The amortisation period of intangible assets is 8 years for
customer relationships and 4 years for trademarks and developed
technology. Product development costs are amortised over 6 years
from the date of shipment of the first completed unit. GPMG
development costs have been amortised from October 2013 following
the achievement of full production capability.
5. Investment in Associated Company
At 31 March 2013 3,321
Share of results for the six months to 30 September
2013 54
Exchange movements on translation for the period (193)
Write off of investment on disposal (3,182)
At 30 September 2013 -
Share of results for the period -
At 31 March 2014 -
===================================================== ========
Herstal had no strategic interest in MUSA and they required the
Group to dispose of its 49% interest in MUSA before they would make
the Offer. Despite entering into negotiations with a number of
different parties over a sale of this interest during the period
August 2013 to February 2014, these negotiations did not result in
a firm offer for the Company's interest in MUSA. By late February
2014, in order to preserve the Offer for the benefit of
Shareholders, it became necessary to dispose of the Group's
interest in MUSA at a nominal value. This disposal was concluded on
28 March 2014 and reflected in in the results as an impairment
provision for the year ended 30 September 2013 which were finalised
on that day.
6. Property, plant and equipment
Leasehold improvements Plant and equipment Motor vehicles Total
GBP'000 GBP'000 GBP'000 GBP'000
At 31 March 2013 136 992 43 1,171
Additions at cost 2 83 - 85
Transfers 145 (145) - -
Disposals - - (40) (40)
-------------------------- ----------------------- -------------------- --------------- --------
At 30 September 2013 283 930 3 1,216
Additions at cost 30 387 - 417
At 31 March 2014 313 1,317 3 1,633
-------------------------- ----------------------- -------------------- --------------- --------
Accumulated depreciation
At 31 March 2013 45 328 7 459
Charge for period 21 99 2 122
Disposals - - (7) (7)
-------------------------- ----------------------- -------------------- --------------- --------
At 30 September 2013 66 427 2 495
Charge for period 21 107 1 129
-------------------------- ----------------------- -------------------- --------------- --------
At 31 March 2014 87 534 3 624
-------------------------- ----------------------- -------------------- --------------- --------
Net book value at
31 March 2014 226 783 - 1,008
========================== ======================= ==================== =============== ========
Net book value at
31 March 2013 91 664 36 791
========================== ======================= ==================== =============== ========
Net book value at
30 September 2013 217 503 1 721
========================== ======================= ==================== =============== ========
7. Bank loans and finance leases
31 March 31 March 30 September
2014 2013 2013
GBP'000 GBP'000 GBP'000
Current
Overdraft facility 359 910 914
Bank loan (Secured) 707 700 1,760
Other loans 600 - -
Finance leases - 15 2
--------------------- --------- --------- -------------
1,666 1,625 2,676
--------------------- --------- --------- -------------
Non-current
Bank loan (Secured) 686 1,417 -
Finance leases - 72 -
--------------------- --------- --------- -------------
686 1,489 -
--------------------- --------- --------- -------------
2,352 3,114 2,676
===================== ========= ========= =============
New bank facilities were completed as part of the acquisition of
trade and assets of Base in February 2013. These were revised in
December 2013 and comprise a GBP2.1 million term loan with
quarterly repayments of GBP175,000 over three years, at an interest
rate of 4.1% above LIBOR and an overdraft facility of GBP1 million
at an interest rate of 4.75% above LIBOR. As security for these
facilities, the Group's principal operating subsidiary, Manroy
Engineering Limited, granted a debenture supported by fixed and
floating charges over its assets, and Manroy Plc provided an
unsecured guarantee. If the Offer from Herstal is declared
unconditional in all respects these facilities will become
repayable under the change of control provisions within the loan
agreement.
Other loans relates to product expansion funding provided by
Caledonian Heritable Limited ("Caledonian"), a 23.1% shareholder in
Manroy. This funding and associated interest totalling GBP0.35m is
structured to be repaid by 28 November 2014 from the cashflow
receivable by Manroy on sales of the resultant products.
8. Deferred tax
The movement on the deferred tax liability arose as follows:
Six months Six months Year ended
ended ended 30 September
31 March 31 March 2013
2014 2013
GBP'000 GBP'000 GBP'000
At beginning of the period 1,530 1,777 1,777
Credited to tax charge in
Statement of Comprehensive
Income (128) (127) (247)
Release of deferred tax credit (102) - -
relating to Associated Company
1,300 1,650 1,530
================================= =========== =========== ==============
Deferred tax was provided on acquisition of the Group's
interests in Manroy Systems and Manroy USA because amortisation of
intangible assets is non-deductible for corporation tax purposes.
The deferred tax recorded at acquisition is re-assessed at
prevailing rates of tax at each period end and amortised against
the Group's corporation tax charge in parallel to the amortisation
of the intangible assets acquired.
9. Exchange reserve
Six months Six months Year ended
ended ended 30 September
31 March 31 March 2013
2014 2013
GBP'000 GBP'000 GBP'000
Balance at beginning of period 315 109 109
Exchange gain on translation
of investment in Associated
Company 3 39 206
Transfer of provision to (318) - -
retained earnings following
disposal of Manroy USA
- 148 315
================================ =========== =========== ==============
10. Related party transactions
On 3 December 2010, the Company entered into an agreement for
the acquisition of Manroy Systems Limited, pursuant to which Glyn
Bottomley agreed to sell his entire issued share capital of Manroy
Systems Limited to the Company for 2,068,633 Ordinary Shares at 75
pence per share. No changes have been made to this agreement during
the six months ended 31 March 2014. Under the acquisition
agreement, Glyn Bottomley gave warranties to the Company regarding
Manroy Systems Limited and Manroy Engineering Limited relating to
taxation, subject to a maximum liability of GBP1.5 million. Claims
under these warranties must be must be made by 23 December
2017.
On 3 December 2010, the Company entered into the Relationship
Agreement with Glyn Bottomley, Caledonian Heritable Limited and
Surinder Rajput (the "Concert Party Members"). No changes have been
made to this agreement during the six months ended 31 March 2014.
Under this agreement, the Concert Party Members undertook to the
Company to use their reasonable endeavours to ensure that the Group
is able at all times to carry on its business independently and
that any transactions between any of them with the Group are on an
arm's length basis and on normal commercial terms. The Relationship
Agreement will continue in force for so long as the Ordinary Shares
are admitted to AIM and the Concert Party Members are deemed to
control the Group under the terms of the City Code or the Articles
of the Company.
On 1 April 2011, the Company acquired the business and assets of
AEI, a company owned equally between Glyn Bottomley and Caledonian
Heritable Limited for GBP250,000, payable in cash, together with an
earn out at the lower of 7 per cent. of AEI related turnover and 50
per cent. of profit after tax generated from the acquired assets of
the AEI business for two years from the date of acquisition which
has been provided in this half yearly financial report. No changes
have been made to this agreement during the six months ended 31
March 2014 and the Group is currently progressing orders achieved
from the AEI business acquired during the two year earn out period.
If actual revenue generated matches forecast revenue, the full
deferred consideration will be covered by the provisions already
made. Within trade and other payables is an accrual for GBP240,000
(2013: GBP240,000) provided for deferred payments on the
acquisition of AEI,
On 3 December 2010, the Company entered into Lock-In and Orderly
Market Agreements with the Concert Party Members. No changes have
been made to this agreement during the six months ended 31 March
2014. Under these agreements, any dealings by a Concert Party
Member who is a Director are subject to the Company's code of
dealing, and any disposals by any Concert Party Member can only be
only made through the Company's brokers. No such dealings have been
undertaken by any Concert Party Member between the date of the
agreements and 31 March 2014.
Maher Limited, an international materials supplier involved in
the defence sector, provides certain raw materials to the Group on
normal arm's length commercial terms. Maher Limited also provided
upfront working capital to MUSA during the year ended 30 September
2013 to assist in production of products to be purchased by Manroy
for development and sale. Gerry Clark, a Non-Executive Director of
the Company, is a director of Maher Limited.
In January 2014, the Company announced it was expanding
production of military rifles, funded to a maximum of GBP0.75
million by a loan from Caledonian Heritable Limited ("Caledonian"),
a Concert Party Member. This funding and associated interest
totalling GBP0.35m is structured to be repaid by 28 November 2014
from the cashflow receivable by Manroy on sales of the resultant
products. Given Caledonian's shareholding in the Company, entry
into the Loan Agreement by the Company was considered to be a
related party transaction pursuant to Rule 13 of the AIM Rules for
Companies. The Directors, having consulted with the Company's
nominated adviser Allenby Capital Limited, considered that the
terms of the financing were fair and reasonable insofar as the
Company's shareholders were concerned.
During the six months ended 31 March 2014, the Group paid
marketing, overseas customer trials, testing consultancy fees of
GBP11,000 (2013: GBP7,000) to Surinder Rajput a Concert Party
Member, relating to export revenues generated and development of
GPMG and customer export opportunities during the period..
During the six months ended 31 March 2013, the Group purchased
goods from MUSA totaling GBP315,000 (2013:GBP2,000), sold goods to
MUSA for GBP17,000 (2013: GBP3,000).
Apart from the above contracts and the service contracts and
letters of engagement between the Directors and the Company, no
contract existed during the six months ended 31 March 2014 in
relation to the Group's business in which any Director, Concert
Party member, or associated company was interested.
11. Financial liabilities
The Company had entered into unsecured guarantees relating to
two financing facilities provided to MUSA totalling $1,200,000
(GBP721,000), primarily secured on MUSA's property and machinery,
and an unsecured undertaking relating to funds advanced to MUSA
totalling $500,000 (GBP301,000). Conditional on the Offer being
declared unconditional in all respects, Manroy has undertaken to
discharge these facilities in cash in return for release of the
guarantees. Accordingly, the Directors assessed the fair value of
these liabilities at 31 March 2014 at GBP1,022,000, and this amount
has been provided in the half yearly report for the six months
ended 31 March 2014.
12. Financial statements and half-yearly financial report
The financial information set out in this half-yearly financial
report in relation to Manroy Plc includes information for the six
months ended 31 March 2014, with comparative information for the
six months ended 31 March 2013 and the year ended 30 September
2013. The financial information contained within this half-yearly
financial report is unaudited and has not been reviewed by the
Company's auditors. Statutory financial statements for the year
ended 30 September 2013 for the companies forming the Manroy Plc
group have been delivered to the Registrar of Companies. The
auditors have reported on those financial statements; their reports
were unqualified and they did not contain statements under Section
498(2) or (3) of the Companies Act 2006.
The audited financial statements for the year ended 30 September
2013, further copies of this half-yearly financial report and the
half-yearly financial report for the six months ended 31 March
2013, are available from the Finance Director at the registered
office of the Company, 6 Lakeside Business Park, Swan Lane,
Sandhurst, Berkshire GU47 9DN.
GLOSSARY OF TERMS AND DEFINITIONS
In these financial statements, unless the context otherwise
requires or provides, the expressions set out below bear the
following meanings:
"AEI" AEI Land Systems Limited, a company controlled by Glyn
Bottomley and Caledonian Heritable Limited and whose business and
assets were acquired by the Company in 2011.
"Base" The trade and assets of Base Engineering ltd and certain
assets of RJL Engineering
"Board" or "Directors" the directors of Manroy Plc, all of whose
names are available at www.manroy.com
"City Code" The City Code on Takeovers and Mergers
"CMA" Competition and Markets Authority
"Companies Act" the Companies Act 2006, as amended from time to
time
"Company" or "Manroy" Manroy Plc
"Concert Party" Glyn Bottomley, Caledonian Heritable Limited,
Paul Carter, and Surinder Rajput (each of them being "a member of
the Concert Party"), all of whom are regarded for the purposes of
the City Code as acting in concert (as defined in the City
Code)
"Group" the Company and its subsidiaries at the date of this
document
"GPMG General Purpose Machine Gun
Herstal" FN Herstal SA, a company registered in Belgium under
company number RPM. Liege 0441.928.931
"Herstal Offer Price" 85p per Ordinary Share
"LIBOR" The rate at which each bank submits must be formed from
that bank's perception of its cost of funds in the interbank
market
"HMG" 12.7mm M2 Heavy Machine Gun, Manroy's principal revenue
generating product
"Manroy USA" or "MUSA" Manroy USA LLC, a partnership
incorporated in the United States of America, with 510 units of
membership owned by John Buckner and 490 units of membership owned
by the Group
"Novation" the act of either replacing an obligation to perform
with a new obligation, or replacing a party to an agreement with a
new party.
"Offer" The offer in the Offer Document to acquire the entire
issued share capital of the Company at the Herstal Offer Price
"Offer Document the document issued by Herstal containing terms
of the Herstal Offer dated 25 April 2014
"Ordinary Shares" or "Shares" ordinary shares of 5 pence each in
the capital of the Company
"Shareholders" persons who are registered holders of Ordinary
Shares from time to time
"UK MoD" the UK Ministry of Defence
"US DoD" United States Department of Defense
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR WGUACQUPCGWU
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