Independent Media Support Group PLC
12 July 2006
For immediate release 12 July 2006
Independent Media Support Group Plc
('IMS' or the 'Company' or the 'Group')
Agreement of contract
At the time of IMS' preliminary results announcement in July last year, the
Board of IMS mentioned that the Group had been approached to review its pricing
by one of its major customers. IMS further announced in its preliminary results
on 27 March 2006 that the Group had agreed the continuation of this long-term
relationship and anticipated that completion of the new contract would occur in
the next few months. IMS also stated that this contract would be at
substantially lower prices and have a significant effect on the Group's results.
IMS has today finally signed a new contract for this major customer. The new
contract is for a 3 year period commencing 1 July 2006. However, as signalled in
the earlier announcements made by the Company, this contract is at substantially
lower prices. While the Company has made a number of cost savings in
anticipation of the effect on the Group of the new contract, these will not
offset the loss of expected margin on the new contract in the second half of
this financial year. Accordingly, the Directors expect that the Company is
likely to be loss-making in the second half of the year and is likely therefore
to report a small loss before tax for the year ending 31 December 2006 from its
trading activities which will be further increased by the costs incurred, and to
be incurred, by the Company in relation to the possible offer from the Chairman
as referred to below.
On 19 May 2006 the Company announced that it had received an approach from
Sylvia Sheridan, the Executive Chairman, regarding a possible offer for the
Company. Discussions are at an early stage and there can be no assurance that
any such offer will be made. In addition, there can be no certainty as to the
financial terms on which any offer might be made and therefore shareholders
should exercise extreme caution in dealing in the Company's shares until such
time as the Company is able to make a further announcement. Consequently the
Company is in an Offer Period and accordingly the forecast set out above has
been reported on by the Company's auditors and financial adviser in accordance
with Rule 28 of the Takeover Code. The basis of preparation of this forecast,
the assumptions on which it is based, and the text of the letters which the
Company has received from its auditors and financial adviser, are set out in
Appendix 1 to this announcement.
Enquiries:
IMS Tel: 020 7440 5400
Sylvia Sheridan, Executive Chairman
Mark Robinson, Managing Director
Beaumont Cornish Limited
Roland Cornish Tel: 020 7628
3396
Terms used in the announcement shall, unless the context otherwise requires,
have the meaning given to them in Appendix 2 to this announcement.
Beaumont Cornish Limited ('Beaumont Cornish'), which is authorised and regulated
by the Financial Services Authority in the United Kingdom, is acting for IMS in
connection with the Potential Offer for the purposes of the Takeover Code and
no one else and will not be responsible to anyone other than IMS for providing
the protections offered to clients of Beaumont Cornish nor for providing advice
in relation to the Possible Offer.
Beaumont Cornish has given and not withdrawn its written consent to the
publication in this announcement of its name in the form and context in which
it appears.
H L B Vantis Audit plc has given and not withdrawn its written consent to the
publication in this announcement of its name in the form and context in which
it appears.
This announcement contains statements that are or may be forward-looking with
respect to the financial condition, results of operations and businesses of
IMS. These forward-looking statements include risk and uncertainty because
they relate to events and depend on circumstances that will occur in the future.
There are a number of factors which could cause or may cause actual results or
developments to differ materially from those expressed or implied by such
forward-looking statements.
APPENDIX 1
FORECAST FOR INDEPENDENT MEDIA SUPPORT GROUP PLC FOR THE YEAR ENDING 31 DECEMBER
2006
In the absence of unforeseen circumstances and on the bases and assumptions set
out below, the Directors of IMS forecast that the Company is likely to be
loss-making in the second half of the year and is likely therefore to report a
small loss before tax for the year ending 31 December 2006 from its trading
activities which will be further increased by the costs incurred, and to be
incurred, by the Company in relation to the possible offer from the Chairman.
Bases
1. The forecast has been prepared on a basis consistent with the
accounting policies that were used for the year ended 31 December 2005
and are being used in the current financial year.
2. The forecast is based on the un-audited management accounts for the
five months ended 31 May 2006 and a forecast for the seven months
ending 31 December 2006.
Assumptions
The principal assumptions on which the forecast is based are set out below:
1. There will be no material change in the rates of interest, inflation or
taxation (direct and indirect) from those currently prevailing.
2. There will be no material acquisitions or disposals of businesses.
3. There will be no material change in current levels of demand in the
Group's principal markets caused by significant changes in economic or
other factors.
4. There will be no major disruptions to the business of the Group, its
suppliers or customers by reason of natural disaster, extreme weather
conditions, industrial disruption, civil disturbance or government
action.
5. There will be no change in legislation or regulatory requirements that
will have a material impact on the Group's operations.
6. There will be no material change in the present management or control
of IMS.
LETTER FROM BEAUMONT CORNISH LIMITED IN RELATION TO THE FORECAST
5th Floor
10-12 Copthall Avenue
London
EC2R 7DE
The Directors
Independent Media Support Group PLC
10 Carlisle Street
London
W1D 3BR
12 July 2006
Dear Sirs
We have discussed with you as the Directors of Independent Media Support Group
PLC, the forecast comprising a loss before tax of Independent Media Support
Group PLC and its subsidiaries for the year ending 31 December 2006 (the
'Forecast') and the bases and assumptions on which it has been prepared. We have
also discussed the accounting policies and basis of calculation for the
Forecast with H L B Vantis Audit plc, Independent Media Support Group PLC's
auditors, and we have considered their letter of today's date addressed to both
yourselves and ourselves on this matter.
On the basis of the foregoing, we consider that the Forecast for which you as
the Directors of Independent Media Support Group PLC are solely responsible,
has been compiled with due care and consideration.
This letter is provided to you solely in connection with Rule 28.3(b) of The
City Code on Takeovers and Mergers and for no other purpose.
Yours truly,
Beaumont Cornish Limited
H L B Vantis Audit plc
82 St John Street
London
EC1M 4JN
The Directors
Independent Media Support Group PLC
10 Carlisle Street
London
W1D 3BR
And
Beaumont Cornish Limited
5th Floor
10-12 Copthall Avenue
London
EC2R 7DE
12 July 2006
Dear Sirs
Independent Media Support Group PLC (the 'Company')
We report on the forecast comprising the statement by the Directors of the
Company that the Company is likely to be loss-making in the second half of the
year and is likely therefore to report a small loss before tax for the year
ending 31 December 2006 from its trading activities which will be further
increased by the costs incurred, and to be incurred, by the Company in relation
to the possible offer for the Company from the Executive Chairman (the
'Forecast').
The Forecast, and the material assumptions upon which it is based, are set out
in Appendix 1 of the announcement issued by the Company dated 12 July 2006.
This report is required by Rule 28.3(b) of The City Code on Takeovers and
Mergers and is given for the purpose of complying with that relevant rule and
for no other purpose.
Accordingly, we assume no responsibility in respect of this report to the
Potential Offeror or any other person connected to, or acting in concert with,
the Potential Offeror or to any other person who is seeking or may in future
seek to acquire control of the Company (an 'Alternative Offeror') or to any
other person connected to, or acting in concert with, an Alternative Offeror.
Responsibilities
It is the responsibility of the Directors of the Company to prepare the Forecast
in accordance with the requirements of The City Code on Takeovers and Mergers.
It is our responsibility to form an opinion as required by Rule 28.3(b) of The
City Code on Takeovers and Mergers as to the proper compilation of the Forecast
and to report that opinion to you.
Basis of preparation of the Forecast
The Forecast has been prepared on the basis stated in Appendix 1 to the
announcement issued by the Company dated 12 July 2006 and is based on the un-
audited management accounts for the five months ended 31 May 2006 and a forecast
for the seven months ending 31 December 2006. The Forecast is required to be
presented on a basis consistent with the accounting policies of the Company.
Basis of opinion
We conducted our work in accordance with the Standards for Investment Reporting
issued by the Auditing Practices Board in the United Kingdom. Our work included
evaluating the basis on which the historical financial information included in
the Forecast has been prepared and considering whether the Forecast has been
accurately computed based upon the disclosed assumptions and the accounting
policies of the Company. Whilst the assumptions upon which the Forecast are
based are solely the responsibility of the Directors, we considered whether
anything came to our attention to indicate that any of the assumptions adopted
by the Directors which, in our opinion, are necessary for a proper understanding
of the Forecast have not been disclosed or if any material assumption made by
the Directors appears to us to be unrealistic.
We planned and performed our work so as to obtain the information and
explanations we considered necessary in order to provide us with reasonable
assurance that the Forecast has been properly compiled on the basis stated.
Since the Forecast and the assumptions on which it is based relate to the future
and may therefore be affected by unforeseen events, we can express no opinion
as to whether the actual results reported will correspond to those shown in the
Forecast and differences may be material.
Opinion
In our opinion, the Forecast has been properly compiled on the basis of the
assumptions made by the Directors and the basis of accounting used is
consistent with the accounting policies of the Company.
Yours faithfully
H L B Vantis Audit plc
APPENDIX 2
DEFINITIONS
The following definitions shall apply in this announcement unless the context
requires otherwise.
Beaumont Cornish Beaumont Cornish Limited,
authorised and regulated by the
Financial Services Authority
Takeover Code The City Code on Takeovers and
Mergers
Group IMS and each of its subsidiary
companies
IMS or Company Independent Media Support Group
PLC (Company No. 04936428)
Forecast the Forecast by the Directors of
the Company in this announcement
that the Company is likely to be
loss-making in the second half of
the year and is likely therefore
to report a small loss before tax
for the year ending 31
December 2006 from its trading
activities which will be further
increased by the costs incurred,
and to be incurred, by the
Company in relation to the
possible offer from the Chairman.
Possible Offer the approach by Sylvia Sheridan,
the Executive Chairman, regarding
a possible offer for the Company
Potential Offeror Sylvia Sheridan, the Executive
Chairman
This information is provided by RNS
The company news service from the London Stock Exchange