Victoria PLC - Re Posting of Disposal Circ.
23 Novembro 1999 - 5:02AM
UK Regulatory
RNS Number:2434B
Victoria PLC
23 November 1999
Victoria P.L.C. - Proposed Disposal of Green Street Property
The Board is pleased to announce that it expects to post to
shareholders today a circular (the "Circular") seeking
shareholder approval to the proposed disposal (the "Disposal")
of the Company's Green Street Property (the "Property").
Introduction
The Board announced on 23 December 1998 that the Company had
entered into a conditional agreement for the sale of its
freehold property in Green Street, Kidderminster to Morbaine
Limited. The aggregate consideration receivable is #3.0
million. Of this, #25,000 was paid in cash on 30 December
1998, #150,000 in cash is due on the Property sale agreement
becoming unconditional, and #2,825,000 in cash is due on
completion.
A further announcement was made by the Board on 28 October
1999 that outline planning consent had been granted by the
local authority, thus satisfying a major pre-condition of the
Disposal. Certain other conditions still remain to be
satisfied before the Disposal can be completed, including the
requirement for shareholder approval of the Disposal. As the
Board is communicating its interim results to shareholders
today, it is taking this opportunity to seek this approval now
even though certain conditions remain to be satisfied. It is
not currently possible, however, to give a firm completion
date.
The Circular will provide the background to and reasons for
the Disposal and explain why the Directors consider the
Disposal to be in the best interests of Victoria.
Background to and reasons for the Disposal
The Group's operations at Kidderminster are at present
conducted from three separate sites in the town. The Green
Street Property was the earliest to be acquired by the Company
in 1910 and comprises a complex of buildings fronting on the
east side of Green Street, which are now unsuitable for the
Group's modern manufacturing methods. The site is adjacent to
Kidderminster Town Centre and situated within the ring road
known as The Ringway. Over a number of years, nearly all of
the manufacturing process and warehousing have been moved to
our other major site on the Worcester Road, where a
substantial building programme has been carried out to match a
significant investment in modern plant. The latest phase of
building at the Worcester Road site is due to be completed by
the end of 1999 and will allow the Group to vacate the Green
Street Property completely. The Green Street premises are
therefore surplus to the Group's requirements.
In 1994 the Company was approached by Morbaine Limited, a firm
of developers who had drawn up plans for a comprehensive
retail redevelopment of a large area of land fronting on Green
Street, of which the Property forms part. Morbaine Limited
was granted an option by the Company which would entitle them,
within a time limited period, and if their planning proposals
were approved by the authorities, to purchase the Property at
a price of #2.51 million. Planning permission was not
obtained and the option lapsed in July 1998.
A firm of chartered surveyors was instructed to re-market the
Property and approaches to a number of potential purchasers
were made. From the offers received, Morbaine was selected
and a conditional contract was signed on 23 December 1998 to
sell the Property to Morbaine for #3.0 million.
The Directors consider that the value of the Property to the
Group justifies the sale price of #3.0 million.
Financial effects of the Disposal
The Property was included in the Group's accounts as at 3
April 1999 at a value of #0.75 million. This valuation was on
the basis of the open market value taking into account only
the existing planning consent. The #3.0 million valuation of
the Property contained in the Circular reflects, among other
things, the obtaining of planning permission for non-food
retail use. If the Disposal is completed, the surplus of
#2.25 million (before taxation, if any, and costs arising on
the Disposal) will be credited to the profit and loss account
in the financial period in which it is completed. The cash
balances of the Group will be increased by #3.0 million
(before costs) and the Group's fixed assets will decrease by
#0.75 million. The completion of the Disposal will result in
a significant reduction in gearing and the Directors believe
it will enhance earnings and assets per share. The increase
in earnings will be attributable to a combination of cost
savings resulting from the Disposal and a reduced interest
charge.
Unaudited pro forma information on the net assets of the Group
following the Disposal is given in the Circular. The
statement shows that the Group's pro forma gearing following
the Disposal is 6.1 per cent. Pro forma net assets increase
by #2.17 million to #19.66 million as a result of the
Disposal.
It is the Directors' current intention that, subject to the
remaining conditions to the Property Agreement being satisfied
and the Disposal being completed, a special dividend will be
declared of 15p per share, amounting to a distribution of
#1.03 million in total. The remainder of the proceeds raised
from the Disposal will be applied initially to reduce debt and
then to provide resources for investment in the Group's
business.
Extraordinary General Meeting
The Directors are recommending shareholders to vote in favour
of a resolution to approve the Disposal which will be proposed
at an extraordinary general meeting of the Company on 9
December 1999 at 2pm.
Enquiries:
Alan R Bullock Mark Lee
Group Managing Director Group Finance Director
Victoria P.L.C. Victoria P.L.C.
Tel: 01562 823400 Tel: 01562 823400
John Folliott Vaughan Fiona Tooley
Director of Corporate Finance Director
Albert E Sharp Securities Citigate Dewe Rogerson Ltd.
Tel: 0121 683 7212 Tel: 0121 631 2299
END
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