Notice of General Meeting

RNS Number : 4930U

Cashbox PLC

15 October 2010

 



Cashbox plc ("Cashbox" or the "Company")

General Meeting of the Company

Cashbox will today post to shareholders a letter and notice of a general meeting of shareholders to be held on 9 November 2010 (the "GM").

Background to and reasons for the General Meeting

Having announced in October 2009 that it was EBITDA positive on a quarterly basis for the first time in the Company's history (for the trading period July 2009 to September 2009), the Company faced a significant setback with the loss of Threshers in October 2009, its oldest and second largest (at that time) corporate client, which went into administration.

In our recent trading update, the Company announced that it expects its full year results to 30 June 2010 to show revenues in the region of £6.7 million, a loss before tax of less than £2.4 million and an EBITDA loss no greater than £400,000. The year's results represent a significant improvement over the prior year but were impacted by the loss of Threshers.

The Company has worked hard to replace the loss of income from the Threshers ATMs and in fact the Company's other 2,500 installed ATMs have generated sufficient transactions for the Company to be EBITDA positive again for the trading period July 2010 to September 2010. Further to the demise of Threshers, Cashbox assumed ownership of 300 Threshers ATMs as payment for engineering services rendered. However, these machines are non-compliant with current Link regulations and therefore the Company needs to upgrade these machines to enable their installation at new sites. The Company has successfully signed a number of contracts this year with companies such as UNS Ltd, Mitchells and Butlers PLC, Bay Restaurant Group and Greene King, to provide a sufficient pipeline of potential sites in which to install these 300 ATMs.

The Company has continued with its focus on high footfall sites. This has resulted in a strong performance from the core estate which, together with the impact of new contract wins, has the Company enjoying significantly higher transaction volumes than in the prior year.

Despite the recent performance of the business and the promising outlook, the Company has recently deferred interest payments on its subordinated loans in order that the Company retains sufficient working capital while further investment is made in ATMs (including the old Threshers ATMs) to fuel the growth of the business and improve cashflow. The directors of the Company (the "Directors") are mindful of the need to continue to grow the business in order to meet its debt requirements. This requires the ability to raise finance and the Directors therefore urge shareholders to support the resolutions at the GM. The Company is seeking shareholder approval of the resolutions to be proposed at the GM to not only update its Articles of Association (the "Articles"), but also to enable the Company to retain the flexibility to move quickly with regard to its fundraising requirements, should the opportunity arise, through a capital reorganisation (as further explained below).

At the GM the following special resolutions will be proposed:

1. Articles of Association

At the GM, a special resolution will be put to shareholders for the purpose of amending the Articles to take account of the provisions of the Companies Act 2006 and other ancillary matters.

2. Capital reorganisation

At the GM, a special resolution will be put to shareholders for the purpose of reorganising the Company's ordinary share capital (the "Capital Reorganisation"), effectively reducing the nominal value of an ordinary share from 1 pence to 0.1 pence ("Resolution 2"). The Capital Reorganisation will not affect shareholders' voting or dividend rights and is not intended to affect the market value of an ordinary share.

Resolution 2 is being proposed because, as at the date of this document, the ordinary shares are being traded on AIM at a mid-market price which is below their current nominal value of 1 pence per share. Under the 2006 Act it is unlawful to allot shares at a discount to their nominal value and therefore the current nominal value of an ordinary share restricts the ability of the Company from issuing further shares, either for cash or non-cash consideration, at or near to the current market value of an ordinary share if opportunities to do so arise. If this resolution is passed, the Capital Reorganisation will remove this restriction and provide the Company with greater flexibility to finance the business.

If Resolution 2 is passed every issued ordinary share of 1 pence ("Existing Ordinary Share") will be subdivided into one ordinary share of 0.1 pence each (a "New Ordinary Share") and nine deferred shares of 0.1 pence each (a "Deferred Share") having the rights set out in the Articles.

Despite the creation of the Deferred Shares and changes to the underlying nominal value of the resulting New Ordinary Shares, shareholders can rest assured that their percentage ownership of the Company will not change as a result of the Capital Reorganisation.

The New Ordinary Shares will carry equivalent rights to the Existing Ordinary Shares under the Articles. The Deferred Shares will have no rights to vote or to participate in dividends and will carry limited deferred rights on any return of capital (whether on a liquidation or otherwise) and therefore will effectively be of no economic value. The Deferred Shares will be subject to eventual redemption by the Company for a nominal amount as set out in the Articles. No application will be made for the Deferred Shares to be admitted to trading on AIM or any other market. An application will be made for the New Ordinary Shares to be traded on AIM and it is expected that, subject to the passing of the resolutions at the GM, admission of the New Ordinary Shares will become effective on AIM and dealings will commence at 8.00 a.m. on 10 November 2010.

Existing share certificates in respect of Existing Ordinary Shares will remain valid. No share certificates will be issued for the Deferred Shares.

Special business

In accordance with section 656 of the Act, the directors of a public company must call a general meeting to consider whether any, and if so what, steps should be taken when the net assets of a public company are half or less of its called-up share capital. Consequently, the Directors are calling the GM to consider this situation. In the light of the discussions which the Directors have been undertaking, the view of the Directors is that no further steps need be taken to deal with this situation at present and therefore no resolution will be put to the GM on this issue.

Recommendation

The Directors consider that the Capital Reorganisation is in the best interests of the Company and its shareholders as a whole. Accordingly, the board of Directors unanimously recommends that you vote in favour of the resolutions to be proposed at the GM, as they intend to do in respect of their own beneficial and non-beneficial holdings, amounting in aggregate to 3,140,000 Existing Ordinary Shares, representing approximately 2.1 per cent of the Company's issued share capital.

A copy of the letter to shareholders and notice of general meeting will be available on the Company's website at www.cashboxatm.co.uk.

Enquiries:

Cashbox PLC Ciaran Morton, Chairman and CEO	01256 441 000
Threadneedle Communications                             Josh Royston/Graham Herring	020 7653 9850
Seymour Pierce - Nominated Adviser and Joint Broker                             Jonathan Wright/Jeremy Porter	020 7107 8000
Fairfax I.S. PLC - Joint Broker                           Ewan Leggat	020 7598 5368

 

END

 

 

NOEBXBDGLXBBGGU