HIT Hitchens Grp

RNS Number:3709R
Hitchens Group PLC
02 April 2008



2 April 2008

                               Hitchens Group plc
                         ("Hitchens" or "the Company")

           Acquisition of Wallgate Services Limited for �8.76 million

  Placing of 8,553,846 Ordinary Shares at 13 pence per share raising �1.1m and
             acquisition of Flarepilot Plc raising a further �0.5m

                         Acquisition of Flarepilot Plc

                               Board Appointment


Acquisition of Wallgate Services Limited ("Wallgate")

Hitchens, the AIM-listed retailer, is pleased to announce that it has agreed to
acquire the entire issued share capital of Wallgate, for a total consideration
of �8.76 million (the "Acquisition"). The consideration is to be satisfied by a
cash payment of �0.75 million and the issue of 61,660,562 ordinary shares of
0.75p each in Hitchens ("Ordinary Shares").  The acquisition combines the shops
and online retail distribution base of Hitchens with the retail outsourcing
services of Wallgate Services Limited together with its wholly owned online
retail subsidiary Best Price Trading Limited.

*         Wallgate is a well established and successful provider of outsourcing
services to major manufacturers, retailers and distributors to maximize their
net asset recovery percentage on consumer returns.  Through its 'RevShare'
service Wallgate provides an end-to-end solution for returns management
including store collection, inventory management, repackaging and remarketing of
consumer returns back across all marketing channels including online,
principally for higher value consumer electronics goods.  Hitchens has been a
customer of Wallgate for some time.

*         Hitchens and Wallgate have established successful online offerings
through their sites currently trading on eBay asHitchens Hot Deals and Bestprice
Trading. They have combined feedback of over 65,000 with a positive feedback of
99.8%

*         The market for consumer returns in the UK has been estimated to be
valued at over �5.75 billion with estimated logistics costs of �500 million
(Cranfield Business School 2007).

*         The management team of the enlarged group has an in-depth knowledge of
the UK retail markets, in particular, the consumer electronics segment where it
expects to see benefits from the opportunities available to the enlarged group
in the following ways:

  * Increased supply of graded products into the Hitchens stores;

  * Growth in the number of retail partnerships utilising Wallgate's RevShare
    service

  * Growth in the online revenues of the two principal online brands.

*         Current Wallgate CEO, Howard Strowman, will join the PLC Board as
Group CEO.

Commenting, John Taylor, Managing Director of Hitchens Group plc said: "This is
a transforming acquisition for Hitchens which immediately brings together two
highly complementary businesses which are focused on the retail consumer
electronics market in the UK."

Commenting, Howard Strowman of Wallgate Group Limited, said: "Wallgate provides
a highly efficient end to end solution for Manufacturers for their excess and 
end of line stock, as well as the processing and remarketing of Manufacturers 
and Major Retailers and Distributors customer returns in the Consumer 
Electronics and Luxury Goods sector. This acquisition presents both companies 
with the opportunity to expand their respective areas of operations. It will 
provide Wallgate's clients with a wider range of solutions, returning optimum 
value for the services we provide them as well as broadening the range of 
products carried by the Hitchens Group stores and online outlets."

The consideration of �8.76 million will be satisfied by a cash payment of �0.75
million and the issue of 61,660,562 new Ordinary Shares (the "Consideration
Shares") and completion of the Acquisition is conditional, inter alia, upon the
admission of the Consideration Shares to trading on AIM.  The vendors of
Wallgate, save for Howard Strowman, shall not for a period of 12 months
following the admission of their Consideration Shares sell, transfer, dispose of
any right, title or interest, or create any encumbrance over, the Consideration
Shares other than through Hitchens' broker so as to maintain an orderly market.
Howard Strowman shall not sell, transfer or otherwise dispose of any right,
title or create any encumbrance over, any of his Consideration Shares at any
time prior to the first anniversary of the date the Consideration Shares are
admitted to trading on AIM.  Howard Strowman shall not after the first
anniversary of the admission of his Consideration Shares to trading on AIM and
until the second anniversary of the admission of his Consideration Shares to
trading on AIM, sell, transfer, dispose of any right, title or interest, or
create any encumbrance over, his Consideration Shares other than through
Hitchens' broker so as to maintain an orderly market.

Wallgate made a loss for the 18 month period ended 30 September 2007 of
�307,122. (Year ended 31 March 2006 - �51,959) and had net liabilities at 30
September 2007 of �269,735  (31 March 2006 - net liabilities �62,613).

Best Price made a loss for the 6 months period ended 30 September 2007 of
�176,854 (Year ended 31 March 2007 - loss of �52,009) and had net liabilities at
30 September 2007 of �228,862 (31 March 2007 - net liabilities �32,008).


Fundraise

Hitchens also announces that it has conditionally raised funds for the Company
of �1.61 million (before expenses) via a placing (the "Placing") of 8,553,846
new Ordinary Shares (the "Placing Shares") at a price of 13p per share and via
the acquisition of Flarepilot plc (the "Flarepilot Acquisition"), a PLUS listed
cash shell, with cash or cash equivalents of �500,000.

The majority of the proceeds of the Placing and the Flarepilot acquisition will
be used to fund the future development of the enlarged group's interests in the
UK and to provide additional working capital for the enlarged group.

The Placing is conditional on completion of the Acquisition and the admission of
the Placing Shares to trading on AIM.

Application has been made to the London Stock Exchange for the Consideration
Shares and the Placing Shares to be admitted to trading on AIM. Admission of
these shares is expected to become effective, and trading in them is expected to
commence, at 08.00 a.m. on 4 April 2008.


Acquisition of Flarepilot Plc ("Flarepilot")

Hitchens announces that it has agreed to acquire the entire issued share capital
of Flarepilot for a consideration of 10,492,308 ordinary shares of 0.75p each in
Hitchens ("Ordinary Shares") (being approximately 5.09% of the existing issued
share capital of the Company).  In addition, Hitchens has agreed to issue a
further 1,049,230 Ordinary Shares in respect of fees payable pursuant to the
acquisition of Flarepilot ("Additional Shares").

Flarepilot is listed on PLUS markets as an investment company with net assets of
�500,000 which includes cash or cash equivalents of �500,000. The Acquisition is
being made to provide additional working capital for Hitchens .

Application has been made to the London Stock Exchange for the Consideration
Shares and Additional Shares to be admitted to trading on AIM. Admission of
these shares is expected to become effective, and trading in them is expected to
commence, at 08.00 a.m. on 3 April 2008.

Board Appointment

Howard Strowman will join the PLC board as CEO following completion of the
Acquisition and will hold 50,105,373 Ordinary Shares of 0.75 p each representing
24.29 per cent. of the Company's issued share capital as enlarged by the
Acquisition and Placing.

The following information in respect of Howard is disclosed in pursuant to Rule
17 Schedule Two paragraph (g) of the AIM Rules:

Current Directorships:

Wallgate Services Limited

B.R.Q Limited

Westcoast Asset management Limited

Capslock Limited

Best Price Trading Limited

Wallgate Holdings Limited



Directorships held in the past 5 years:

Saffron Cars Limited

Walter Norton & Sons Limited (in liquidation)



Appointments at the time of dissolution in the last 5 years:

PST (Investments) Limited

PST (Properties) Limited

PST (Trading) Limited

PST (Distribution) Limited

PST (International) Limited

Justxs Limited

Justemployees Limited

Digital Brands Limited

PST (International) Limited which was dissolved on 26 December 2006 following a
creditors' liquidation. There were no unstatisfied creditors.

PST (Trading) Limited which was dissolved on 15 February 2006 following a
members' voluntary liquidation. Unsatisfied creditors were stated to be
�656,000.

PST (Distribution) Limited which was dissolved on 4 April 2007 following a
members' voluntary liquidation. The main creditor was HM Revenue & Customs have
confirmed in writing to PST (Distribution) Limited that no further action would
be taken in respect of the VAT assessment.

PST (Investments) Limited which was dissolved on 15 February 2006 following a
creditors' voluntary liquidation. Unsatisfied creditors were stated to be
�378,957.

PST (Properties) Limited which was dissolved on 15 February 2006 following a
creditors' voluntary liquidation. Unsatisfied creditors were stated to be
�278,957.

JustXS Limited which was dissolved on 15 February 2006 following a creditors'
voluntary liquidation. Unsatisfied creditors were stated to be �190,000.

Total Voting Rights

Following the acquisitions of Wallgate and Flarepilot and the Placing, the
Company's issued share capital will consist of 206,222,617 ordinary shares with
a nominal value of 0.75p per share, with voting rights (one vote per ordinary
share). The Company does not hold any ordinary shares in treasury. This figure
of 206,222,617 ordinary shares may be used by shareholders as the denominator
for the calculations by which they will determine if they are required to notify
their interest in, or a change to their interest in, the Company under the
Financial Services Authority's Disclosure and Transparency Rules.

Notifiable interest

Following the acquisitions of Wallgate and Flarepilot and the Placing, the
following have notifiable interests in the Company:

Name                                 Number of Shares                    Percentage Holding

Paul Harris                          1,333,333                           0.65
David Wilson                         2,000,000                           0.1
Simon Fine                           8,979,400                           4.35
John Taylor                          8,979,400                           4.35
Howard Strowman                      206,222,617                         24.29
Martin Abramson                      8,366,869                           4.06
Littlewoods Shop Direct Home         33,600,001                          16.29
Shopping Limited,
Shekel Limited                       9,418,273                           4.57
Aubrey and Sir Weis (father and son) 8,512,821                           4.13
Oizer Charitable Trust               7,333,333                           3.56
Simon Corney                         6,666,666                           3.23
Nicholas Levene                      6,222,717                           3.01



Enquires:

Hitchens Group plc                    tel: 020 7245 1100
John Taylor

Daniel Stewart                        tel: 020 7776 6550
Lindsay Mair
Oliver RIgby

Hansard Group                         tel: 020 7245 1100
Adam Reynolds





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

ACQFKDKDBBKBPQK

Grafico Azioni Hitchens Grp (LSE:HIT)
Storico
Da Mag 2024 a Giu 2024

Grafico Azioni Hitchens Grp (LSE:HIT)
Storico
Da Giu 2023 a Giu 2024