PANC Panceltica

RNS Number:1090R
Panceltica Holdings Ld
31 March 2008


Immediate Release                                                  31 March 2008


                           Panceltica Holdings Limited

                        ("Panceltica" or the "Company")


                          INTRODUCTION TO TRADING ON AIM


                     Market capitalisation of �236.4 million


Panceltica, which is the holding company for an international group of
specialist fast track construction and construction related companies (the
"Group"), is pleased to announce that today its shares have been admitted to
trading on AIM. The Group raised pre - IPO funds of $115m, and in conjunction
with Admission two of the founder directors have sold 10,000,000 ordinary shares
in the Company through a secondary placing priced at 100p per share.


Summary


The Group's principal activity is the fast track fabrication and construction of
residential and commercial property units. The Group uses its proprietary
Scottsdale technology (the "Scottsdale Technology"), to build lightweight
Galvanized Steel framed structures. Manufacture and assembly typically takes
place on the construction site, which the Directors believe achieves both
logistical savings and time savings. The Group's head office is in Qatar, with
Subsidiaries in Turkey, New Zealand, Jersey and the United Kingdom, and
Subsidiary Interests in the UAE.


The Group has developed a growth business model. For the year ended 31 December
2007 the Group's trading subsidiaries produced revenue of $128.88m (2006:
$6.88m) and profit before tax of $19.77m (2006: $0.38m).


Panceltica's client base within the GCC region (Saudi Arabia, Kuwait, UAE, Oman,
Qatar and Bahrain) includes government-backed companies such as QRE and Barwa in
Qatar, and the Tourism Development & Investment Company in Abu Dhabi.


Panceltica is currently working on two principal contracts, the largest of which
is the Barwa Contract for the design and build of 1,984 housing apartments with
ancillary community and shopping facilities. The total contract price is in
excess of $320 million.


The Group raised approximately $115m through pre-IPO fundraisings between
November 2007 and January 2008. Additionally two of the founder directors have
sold 10,000,000 ordinary shares in the Company through a secondary placing
priced at 100p per share. The Secondary Placing and pre-IPO fundraisings were
undertaken by Blomfield Corporate Finance Limited as Nominated Adviser and
Hichens, Harrison & Co. plc as broker.


Dealing has commenced today, 31 March 2008, under the trading symbol PANC.



Paul Fraser, Group Chief Executive Officer, today commented:


"The successful flotation of Panceltica today bears testament to the tremendous
growth opportunity our business is now presented with. The business momentum
currently being generated within the Gulf region will enable the Group to
implement its growth strategy.


We look forward to continuing the successful growth of Panceltica as a public
company and taking full advantage of the global opportunities provided by the
Group's fast track construction technology."


For further information please contact:

Panceltica Holdings Limited                            Tel: +974 462 2252
William Fatherley Chief Operating Officer
Colin Fitzpatrick, Chief Financial Officer
Blomfield Corporate Finance Limited, Nominated Adviser Tel: +44 (0)207 182 1740
Toby Howell / Charlie Hill-Wood
Hichens, Harrison & Co. plc, Broker                    Tel: +44 (0)20 7382 4450
Adam Wilson / Martin Lampshire
Buchanan Communications                                Tel: +44 (0) 20 7466 5000
Mark Edwards / Jeremy Garcia


The company's admission document which contains further infornation on
Panceltica Holdings Limited and its group is available on the company's website
at www.panceltica.com


Statistics
Introduction Price                                                 100p
Number of Ordinary Shares in issue following the Placing           236,376,000
Capitalisation at the Placing Price                                �236,376,000
ISIN                                                               JE00B2Q7JM31
TIDM                                                               PANC


Additional Information


Introduction

The Group's principal activity is the fast track fabrication and construction of
residential and commercial property units. The Group uses the Scottsdale
Technology, owned by the Group, to build lightweight Galvanized Steel framed
structures. Manufacture and assembly typically takes place on the construction
site, which the Directors believe achieves both logistical savings and time
savings. The Group's current focus of construction projects is within the GCC
region. The Group seeks to offer a wide range of manufactured solutions
including accommodation, modular buildings, commercial buildings and portable or
sectional buildings. The Directors believe given the Group's operational
expertise, network of contacts in its chosen markets and ownership of the
Scottsdale Technology, that the Company is well positioned to benefit from the
current growth opportunities in the GCC region and the wider MENA region.


Business Operations

The Group's construction activity involves the use of the Scottsdale Technology
as well as the Group's additional operational expertise. The Group is currently
working on two principal contracts, the largest of which is the Barwa Contract
for the design and build of 1,984 housing apartments. The development under the
Barwa Contract comprises of 62 four-storey blocks of 32 apartments each, with
ancillary buildings (community and shopping facilities). The total contract
price is in excess of $320 million. The construction phase is due to continue to
mid 2008. Additionally the Group has also been awarded a project on Sir Bani Yas
Island, Abu Dhabi, to build support accommodation (contract value approximately
$5 million) for a new hotel and tourist complex. The Group's client base in the
GCC region includes government-backed companies such as QRE and Barwa in Qatar,
and the Tourism Development & Investment Company in Abu Dhabi. Currently, the
Group's principal customer is Barwa and the Group's current financial
performance is heavily reliant on the Barwa Contract, the principal terms of
which are summarized in paragraphs 15 and 16 of Part IV of this document. The
Directors believe given the level of enquiries received from potential customers
and the additional resources available as a result of the Pre-IPO Fundraisings
that additional contracts will be forthcoming in the near term.


The Scottsdale Technology

Scottsdale is engaged in the design and manufacture of steel roll forming
machines, which are used to form lengths of Galvanised Steel into sections to
produce panels or roof trusses, which when assembled form lightweight frames and
structures for use in the construction of buildings. Each roll forming machine
is controlled by a computer which includes proprietary software, enabling the
design of the profile and formation of the Galvanised Steel sections. Designs
may be imported into the proprietary software from a third party computer aided
design system. Designs taken from the design software are converted into
commands for the control of each respective roll forming machine. The Scottsdale
roll forming machines can be used as mobile manufacturing units in self
supporting, portable cabins with their own generators. The input is flat
Galvanised Steel coil (0.5mm-1.5mm) and the output is shaped, folded, punched
and cut sections with increased strength and rigidity. The sections form panels
and roof trusses which are then assembled into rigid load bearing frames and
structures for buildings. The panels and roof trusses are light enough to be
manhandled into position, and are joined manually with rivets, bolts and TEK
screws. When assembled the building frames include holes (previously punched in
the sections by the roll forming machines) for the installation of electrical,
mechanical and plumbing services. The frames allow for flexibility in the choice
of external cladding. Customers pay a capital sum for the purchase of each roll
forming machine. Thereafter the roll forming machines are controlled by pre-
paid, per metre, smart card technology. Upon expiry of a smart card's pre-paid
meterage a user must insert a new one to continue operation. Rights to exploit
the Scottsdale Technology in North America and Mexico are reserved to Nutrus
LLC. Elsewhere the Group retains ownership of the Scottsdale Technology which is
protected by copyright in those territories which recognise copyright in
software.


Market Overview

The Group is initially focussing on developing its business model within the GCC
countries. The GCC is an economic alliance made up of six Gulf states: Saudi
Arabia, Kuwait, UAE, Oman, Qatar and Bahrain. As at the end of 2006 the GCC
member countries possessed an estimated 40 per cent. of the world's proven oil
reserves and 22.7 per cent. of the world's proven natural gas reserves. Qatar
alone held an estimated 14 per cent. of the world's proven natural gas reserves
at that date. During 2006 the GCC countries produced 22.3 per cent. of the
world's oil production and 7.6 per cent. of the world's natural gas production.
The value of oil and gas exports from the GCCcountries is forecast to be in
excess of $450 billion in 2008. The high price of oil combined with efforts to
diversify from a single source of income has continued to boost construction
activity in the Middle East. In the opinion of the Directors Dubai's
construction market may be perceived as having neared its peak but other GCC
countries such as Qatar, Abu Dhabi and Saudi Arabia are at earlier stages of the
development cycle. Independent estimates have suggested that there are currently
up to $884 billion worth of construction projects at some stage of planning in
the GCC region compared with an estimated $190 billion of construction contracts
awarded in 2007. An independent study has stated that as a result of this
increase, clients in the region have complained that there are not enough
contractors to meet demand. The Directors believe, on the basis of these
statistics and the enquiries that they have received to date, that the regional
outlook in the construction industry is positive and that the Group will
continue to find significant opportunities for new contracts. Outside of the GCC
countries the Directors consider that the Group's business model including the
Scottsdale Technology could provide opportunities in emerging markets such as
the wider MENA region, India and Latin America.



Competition

Competition in the Gulf region is considerable and comes mostly from traditional
and pre-cast concrete build techniques and other methods utilising off-site
manufacture. The Directors believe the Company's methodology is well suited to
the market and environmental conditions in the Gulf region. The on-site process
that the Company uses can deliver extensive savings in time and the Directors
believe that there are logistical advantages to the Group's approach of on-site
manufacture over off-site modular manufacture and subsequent transportation. The
Group's experience is that alternative modern methods of construction are not
yet well established in the GCC region. No other company is currently using the
Scottsdale Technology in the GCC region. The Group knows of two other
international companies produce a roll forming machine with a similar function
(though significantly less portable) to the Scottsdale roll forming machines,
but the Group has not yet encountered any such equipment on a tender or project
in the GCC region to date. However, the Directors do anticipate a change in the
competitive environment and increased competition from various other modern
methods of construction in the GCC region in the future. In particular the
Directors anticipate increased attention from large international firms
competing for new projects.


The Directors believe that there are significant opportunities for growth within
Qatar. Outside of Qatar in the GCC region the Company has already expanded
operations in to the UAE with a project currently being undertaken in Abu Dhabi.
Additionally, further enquiries have also been received from potential clients
in Dubai and Saudi Arabia. The Group has traditionally operated through minority
interests in order to reflect local ownership laws, and whilst the Group will
continue to observe all such local laws, it does intend to pursue an active
policy in future of securing, as nearly as possible, full control and ownership
of its operations. In order to optimise expansion opportunities, the Group has
developed a tiered business model. Within the GCC and wider Gulf region the
Group will offer a full design and build service where the Directors consider it
prudent to do so. Alternatively within this core region the Group will offer a
frame construction and installation only service, allowing the other elements of
the build process to be managed by other parties. A further service offering for
projects further afield will be a serviced package of Scottsdale roll forming
machines along with operational consultants and the necessary Galvanised Steel
supplies and logistics to operate them. The most basic offering will be the
straight sale of Scottsdale roll forming machines and smart cards to customers.
In addition to applying a discipline of reviewing and optimising the Group's
service and product offerings, the Directors adopt a policy of continuous
improvement in relation to the Group's intellectual property and Scottsdale is
currently developing a new roof truss product, although the commercial
significance of this in relation to the overall Group is likely to be limited in
the short term. The Group will actively investigate suitable acquisition
opportunities which the Directors consider to be strategically beneficial and
likely to enhance shareholder value.


Directors


Andrew John Mack Huntley (68), Non-executive Chairman

Andrew Huntley's extensive experience spans over 40 years in the commercial
property sector in the UK and overseas. He joined Richard Ellis in 1965 and
retired as Chairman of Insignia Richard Ellis (now part of CB Richard Ellis
Group Inc., the world's largest commercial real estate services firm by 2007
revenue) in 2002 having chaired the merger process with Insignia Financial Group
of the USA. Andrew Huntley was a non-executive director of Pillar Property plc
from 2000 until its acquisition by British Land plc in 2005. He is currently a
Non-Executive Director of the Miller Group Limited (a private UK house builder)
and of property advisory group Catella UK, as well as a member of the board of
the Charities Official Investment Fund.


Anthony Charles Wilson (57), Non-executive deputy Chairman

Anthony Wilson is a chartered accountant with over 30 years experience of
international business and finance. After practising with Dixon Wilson he left
to join Wedd Durlacher Mordaunt in 1984 becoming a finance partner before it was
merged into Barclays de Zoete Wedd, where he spent 10 years in roles including
finance director of the international offices and of the equities division
before retiring as finance director of BZW Investment Management in 1996. From
1998 until 2007 he acted as group finance director and managing director of DAKS
Simpson Group PLC.


Paul Fraser (59), Chief Executive Officer

Paul Fraser has over 40 years experience as a manager and entrepreneur in the
construction industry in the UK and overseas. He ran his own business in Qatar
and Bahrain from 1976-1979, working on various residential and commercial
property projects. From 1979-1983 he was the General Manager of Fraser-Kay
Contracting and was involved in several residential and commercial projects in
Toronto. He then returned to the UK and founded Onix Construction Limited in
Newcastle in 1984, which was wound up during the recession of the early 1990's.
During the late 1990's he assisted in the creation of the Libra Group, in
Vilnius (Lithuania), manufacturing timber for export. Since 1992 Paul Fraser has
been a financial investor and a director in a number of small business ventures
and investment projects. He returned to Qatar in 2003 to take advantage of new
opportunities in the construction sector and he was a founding director of
Panceltica Qatar in November 2005.


John Colin Fitzpatrick (52), Chief Financial Officer

Colin Fitzpatrick is a chartered accountant. Following 10 years with
PriceWaterhouse (now PriceWaterhouseCoopers) and 10 years as a general practice
and forensics partner at Grant Thornton, he established his own partnership
practice providing business advisory services to family businesses, which
included construction and construction support businesses. He has also acted as
a consultant to Baker Tilly. Following Admission he will work full-time for the
Group and he will no longer work for the practice, save for the purpose of
facilitating the hand over and completion of existing matters.


William Peter Fatherley (31), Chief Operating Officer

William Fatherley studied economics at Durham University, graduating in 1998. He
subsequently joined the Ford Motor Company Limited where he was employed in a
number of management roles, before leaving to become General Manager of Ford
Sales at Macrae & Dick Limited. He has been Operations Manager of the Company
since joining the business in September 2006. William is married to Sarah
Fatherley, daughter of Paul Fraser.


Ghanim Saad Mohammed Al-Saad (43) Non-executive Director

Ghanim Al-Saad is the Chief Executive of Qatari Diar Real Estate Investment Co.
and the Chairman and Managing Director of Barwa. He was previously employed at
the Qatari Ministry of State for Cabinet Affairs. Ghanim Al-Saad is the Chairman
of First Finance Company (listed on the Doha Stock Exchange) and the Chairman of
Ghanim Bin Saad Al-Saad Group.


Faisal Juma Khalfan Belhoul (31) Non-executive Director

Faisal Belhoul is a founder and shareholder of Ithmar Capital, a private equity
company incorporated in the Cayman Islands with a branch in Dubai. Ithmar
Capital is the owner of Ithmar General Partner II Limited which is the General
Partner of Ithmar Fund II Limited Partnership, which is a shareholder of
Strategic Partner Limited, an entity that has participated in the pre-IPO
Fundraisings. Faisal Belhoul is also a director in a number of other companies
within the United Arab Emirates.


Abdul Hameed Mostafawi (46) Non-executive Director

Hameed Mostafawi holds a B.S.C in Civil Engineering from the University of
Arizona. He has been the Managing Director of QBC since 1992. He was a 51 per
cent. founding shareholder of Panceltica Qatar in 2005. Previously Hameed
Mostafawi gained experience at the Ministry of Public Works Civil Engineering
Department in Qatar and at engineering consultants Pencol John Taylor & Sons.



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

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