Settlement Agreement and Notice of final results

RNS Number : 5881N

Sprue Aegis plc

10 May 2018

 

Sprue Aegis plc

("Sprue" or the "Company")

Settlement Agreement

and

Notice of final results

Further to its announcements on 31 March 2017, 23 March 2018 and 19 April 2018, Sprue (AIM:SPRP), one of Europe's leading developers and suppliers of home safety products, is pleased to announce that it and its wholly-owned subsidiary, Sprue Safety Products Limited, have reached agreement with BRK Brands, Inc, BRK Brands Europe Limited, Jarden LLC and Detector Technology Limited (together referred to as "BRK") which will result in the orderly termination of the Distribution Agreement dated 7 April 2010 which was extended by both parties for a further three years from 1 April 2015 (the "DA"), the Manufacturing and Supply Agreement dated 1 August 2008 (the "MA"), and all other related issues between these parties. 

In summary, and in consideration for a full and final settlement of all matters between the parties, it has been agreed that:

·     BRK will purchase from Sprue all BRK inventory manufactured from 1 January 2017 for £1.02 million to be paid by way of deduction from payments due by Sprue to BRK under the terms of the DA, save for 3,097 units required by Sprue for its ongoing warranty purposes;

·     Sprue will provide warranty support to its customers on all BRK products manufactured before 1 April 2018 and provide transitional support to ensure an orderly handover as part of the settlement agreement;

·     Sprue will dispose of all BRK inventory manufactured before 1 January 2017 at its own cost, save for 4,857 units required by Sprue for its ongoing warranty purposes;

·     BRK approves the sale by Sprue of excess stock of Sprue's CO products using BRK's brands valued at approximately £300,000 for a period of 6 months;

·     Sprue grants BRK a 12 month non-exclusive licence for its relevant intellectual property, including registered patents and design registration; and

·     Sprue will pay the outstanding balance of payments, amounting to a total of £10,972,484.88 and $71,071, owed to BRK under the terms of the DA and the MA in monthly instalments by 24 December 2018.

Graham Whitworth, Executive Chairman of Sprue, commented:

"I am pleased to announce that we have reached agreement with BRK following the termination of the DA and MA, which deals with all outstanding matters and enables us both to move on with our respective businesses without the risk of legal claims."

Publication of audited results

The Company expects to announce its audited final results for the year ended 31 December 2017 on 15 May 2018.

As a result of the settlement agreement reached with BRK, details of which are set out above, in its audited final results for the year ended 31 December 2017, the Company intends to book a £3.8 million exceptional charge as part of cost of sales (2016: £0.2m exceptional restructuring charge in administrative expenses) which includes £3.4 million to write down the book value of the remaining BRK inventory as at 30 April 2018 to £nil (as the Company will no longer be selling BRK inventory), provisions of £0.2 million to cover the disposal (scrappage) costs of the BRK inventory manufactured before 1 January 2017 (referred to in bullet 3 above) and £0.2 million to cover the Group's legal and professional fees incurred since 22 March 2018 in respect of the dispute with BRK.        

Further to its announcement released on 19 April 2018, the Company announces that the £3.0 million which was drawn down to increase its available short term cash resources under the 3 year revolving credit facility with HSBC Bank plc has been repaid in full to HSBC as it was not required during the 30 day draw down period.

For further information, please contact:

Sprue Aegis plc	02477 717700
Graham Whitworth, Executive Chairman Neil Smith, Group Chief Executive
Stockdale Securities	020 7601 6100
Tom Griffiths
Vigo Communications Jeremy Garcia / Fiona Henson	020 7830 9700

Notes to Editors

About Sprue Aegis plc

Sprue is one of the leaders in the European home safety products market and its range of products can be connected over the internet including smoke alarms, CO alarms and accessories. 

The Group has its own extensive portfolio of patented intellectual property in Europe, the US and other selected territories.  Products are sold under Sprue's leading brands of FireAngel and AngelEye.

Sprue's mission is to protect, save and improve its customers' lives by making innovative, leading edge technology simple and accessible.   For further product information, please visit:  www.sprue.com 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

END

 

 

MSCSSIEFUFASELI