QDG Quadnetics Grp

RNS No 4113e
QUADRANT GROUP PLC
7th August 1997

                      
       Quadrant Group plc ("Quadrant")
(The Precision Engineering and Electronics Systems Group)
                      
                 SALE OF YEWLANDS
                      
Following the receipt of #4.3 million from the recent  Placing
and  Open Offer, Quadrant Group plc ("Quadrant") has  taken  a
further step towards recovery with the sale of its loss-making
UK  aerospace engineering subsidiary, Yewlands Engineering Co.
Limited  ("Yewlands").   Yewlands has  been  sold  to  Chevron
Aerospace Engineering Limited ("Chevron") for nominal  initial
consideration,  plus  assumption  of  #620,000  of  debt.   In
addition,  deferred  consideration of up to  #550,000  may  be
payable by Chevron dependent on the purchaser's utilisation of
tax losses in Yewlands.

Excluded  from the sale is the building occupied by  Yewlands,
of  which  the  freehold  is owned by Quadrant.   Chevron  has
guaranteed  a 15-year lease of this building from Quadrant  to
Yewlands at an initial annual rental of #150,000.

In the 15-month financial year to 31 May 1997, Yewlands made a
loss  before  tax (after exceptional items) of #2.65  million.
The net assets of Yewlands on disposal were approximately #2.2
million  and  the sale will therefore generate a loss  on  net
assets  of  that amount plus costs.  In addition  goodwill  of
#1.9  million previously written off to reserves will be taken
as an exceptional loss on disposal, but will have no effect on
net assets.

Yewlands  was  acquired by Quadrant in  1994  as  part  of  an
expansion  in  the aerospace precision engineering  sector  in
both  the  UK  and  USA.  Shortly following  the  acquisition,
serious  problems were identified that resulted in  a  damages
claim  cash settlement of #1 million paid to Quadrant  by  the
vendor.   Since  that time, Quadrant has  been  engaged  in  a
fundamental   turnaround  of  Yewlands  in  difficult   market
conditions,  involving substantial changes  of  personnel  and
processes.

Although  Yewlands'  prospects are  now  much  improved,  with
increased  order books and a strengthening market, the  timing
of  profit  recovery and positive cash flow remain  uncertain.
Quadrant's board has stated that firm action would be taken if
any  delay in recovery became likely.  Following a recent  re-
assessment  Yewlands'  short term projections,  such  a  delay
seemed probable and accordingly the decision was made to  seek
a buyer for the company.

Quadrant's  US  aerospace  engineering  subsidiary,  which  is
profitable and experiencing strong growth, is not part of  the
sale.

The  disposal  of  Yewlands  reduces  Quadrant's  consolidated
borrowings by #620,000 and removes the need to fund  Yewlands'
further  cash  requirements.   More  importantly,  it   allows
Quadrant  to focus its UK activities on its growing electronic
systems  subsidiaries  involved in  closed-circuit  television
security and flight simulation.

For further information, please contact;

David Coghlan (Chief Executive)        0171 408 1062
Brian Coleman-Smith  
(Binns & Co. Public   Relations)       0171 786 9600


END

Quadnetics (LSE:QDG)
Historical Stock Chart
From Jun 2024 to Jul 2024

Quadnetics (LSE:QDG)
Historical Stock Chart
From Jul 2023 to Jul 2024