Manchester-based media group, Hasgrove has announced plans to delist from AIM and buy back £10.25m in shares.
“We are now providing all shareholders with a cash return option at 82 pence per share – a 31% premium to the share price when we sold Amaze in March,” explained Paul Sanders, group chief executive.
Hasgrove sold its digital agency Amaze to St Ives Marketing Services for £15.3m. This included a £1.8m debt repayment and up to a further £9.7m payable upon the achievement of certain profit targets.
At the time, the Group stated that the revenue obtained would be part invested in its remaining businesses (Interact, The Chase and Landmarks) for expansion and working capital requirements. Up to £1.9m was to be used to completely repay its bank loans and it also stated that it was considering a “return of cash to shareholders.”
Today, in a statement, the Hasgrove board said that it had concluded that it would be “in the best interests of the company” to cancel trading on AIM:
“The Board believes that the costs and regulatory requirements associated with maintaining the Company’s listing are a significant burden on the Company’s financial resources. These costs include fees paid to the Company’s brokers and Registrars, annual fees paid to the London Stock Exchange, costs relating to public announcements, fees and expenses of Directors and fees and expenses of accountants and lawyers engaged to provide services in connection with the Ordinary Shares being admitted to AIM.”
Sanders added that shareholders would have the option to keep their shares in a private company.
The announcement comes as the Group revealed its annual results, which show an increase in revenue (9%/£24.9m) in the previous year. Pre-tax profit rose to £1.1m, from a £3m loss.
“The last year has seen a good recovery in performance in all our businesses along with a strong level of new business wins. The recent sale of Amaze has allowed us to focus on growing our remaining businesses,” added Sanders.
Part of this improvement in performance came through the completion of a restructure which began in 2011.
The Board stated that it was “optimistic” about the Group’s future prospects and added that the offer to buy back shares would “allow the Group to focus its full attention on building the offerings and profitability of its current businesses.”