First Day of Dealings on AIM

Brulines (Holdings) PLC
26 October 2006




Press Release                   26 October 2006


                            Brulines (Holdings) plc

                         ('Brulines' or 'the Company')

                          First day of dealings on AIM



Brulines (Holdings) plc ('Brulines' or the 'Company'), the leading provider of
volume and revenue protection systems for draught alcoholic drinks in the UK
Licensed on-trade, particularly the tenanted pub sector, today announces
commencement of dealings of its Ordinary Shares on AIM, a market operated by the
London Stock Exchange plc.  RSM Robson Rhodes Corporate Finance is the Nominated
Adviser and Cenkos Securities is Broker to the Company.



The stock market EPIC is BRU.L

Placing Statistics
Placing Price                                                                                              123 pence
Number of Placing Shares                                                                                   6,504,065
Number of Sale Shares                                                                                      9,402,533
Number of Ordinary Shares in issue immediately following Admission                                        23,999,125


Market capitalisation at the Placing Price                                                             £29.5 million
Percentage of issued share capital immediately following Admission subject to the Placing                      66.3%


Estimated net proceeds of the Placing receivable by the Company                                         £7.0 million



Reasons for Admission to AIM and use of proceeds of the Placing

The Directors believe that Admission to AIM will assist the Company in achieving
its growth aspirations.  The net proceeds from the Placing are estimated to
amount to approximately £7.0 million and will be used as follows:


  •       £4.1 million to enable the Company to repay founder Derrick Collin's loan note which was issued
          by the Company to finance part of the consideration payable for the acquisition of Brulines; and
  •       £2.9 million to repay bank debt and to provide working capital for the Company and its
          subsidiaries (together the 'Group') for future growth.



The Directors believe that Admission will:

  •       strengthen the Company's balance sheet;

  •       raise the profile of the Group;

  •       enable the Group to recruit, retain and incentivise staff; and

  •       better position the Company to take advantage of both organic and acquisition opportunities for
          growth as they arise.



Commenting on the decision to float, James Dickson, Chief Executive of Brulines
(Holdings) plc, said: 'I am delighted that the Brulines IPO has been completed
so successfully and with strong institutional demand resulting in a total
fundraising of £19.5 million, which was at the higher end of our expectations.
It was particularly encouraging in what we understand to be challenging market
conditions.  The listing will enable us to take the Company onto its next stage
of development, advance our customer offering and capitalise on the growth
opportunities within our market.  We look forward to working with our new
shareholders in the future.'



Brulines' advisers also included lawyers Gordons LLP and Baker Tilly as
reporting accountants.



                                    - Ends -



For further information:
Brulines (Holdings) plc
James Dickson, Chief Executive                         Tel: [phone]
[e-mail]
Mark Foster, Finance Director                          Tel: [phone]
[e-mail]                                        www.brulines.com


Additional contact details:
RSM Robson Rhodes Corporate Finance
Neil Crawford, Corporate Finance                       Tel: [phone]
[e-mail]                                          www.rsmi.co.uk
Cenkos Securities
Nicholas Wells                                         Tel: [phone]
                                                                 www. cenkos.com


Media enquiries:
Abchurch
Sarah Hollins / Justin Heath                           Tel: [phone]
[e-mail]                          www.abchurch-group.com



Photography

Photography to accompany the release is available in electronic form; please
contact Louise Thornhill on 0113 203 1345 or [e-mail]



Introduction

The Group is the leading provider of volume and revenue protection systems for
draught alcoholic drinks for the UK Licensed on-trade, in particular the
tenanted pub sector.



The business concept was founded in the early 1990s by Derrick Collin and
Brulines was bought out by its management in May 2005.



The principal activity of the Group is to measure, remotely harvest, audit and
act on important operational data, primarily for owners of licensed premises but
also for licensees. The Dispense Monitoring division, which represents the
Group's core product, measures the actual volume of liquid dispensed each hour
against legitimate deliveries and protects the pub owners from the potential
loss of revenue from 'buying out'.  Dispense Monitoring systems have been
installed in over 16,000 sites as at 31 July 2006. Typically Brulines sells its
Dispense Monitoring units to customers and then enters into a three to six year
contracts to provide data management and associated services.



During the current financial year, the Group has developed its BQM (brand
quality monitoring) product into commercial trials with three customers.  BQM
provides a mechanism for owners of licensed premises to measure the quality of
draught alcoholic products being served on their premises.  On 31 August 2006,
Machine Insite Limited (a newly formed wholly owned subsidiary of the Group) ('
Machine Insite') acquired the trade and assets of Corporate Management Services
(International) Limited ('CMS') which is involved in the monitoring of AWP
(fruit and gaming) machines.



The Group enjoys strong client relationships, reflecting high levels of customer
service, with its principal customers having signed three to six year
all-inclusive support service contracts covering telecommunication costs,
service, warranty and the provision of data management and analysis.



Since the appointment of James Dickson as Managing Director in March 2003, the
business has had a strong financial record in terms of revenue growth,
profitability and cash generation, with a significant and growing level of
turnover arising from support service contracts, as well as an experienced
management team.



Key Strengths

The Directors believe that the key strengths of Brulines are as follows:

  •       Dominant market leader in volume and revenue protection systems for 
          draught alcoholic drinks for the tenanted pub sector with high 
          barriers to entry;

  •       Strong recurring revenue stream and cash generation;

  •       Significant growth opportunities in similar UK and international 
          markets;

  •       New technology in Brand Quality Monitoring & AWP machine data capture;

  •       Experienced and dynamic Board and management team; and

  •       Strong financial track record.




Summary Trading Record

The Company was established for the purposes of effecting the management buy-out
of Brulines Limited and has acted purely as a holding company.  The consolidated
results of the Group, which are set out in the Admission Document, represent the
results of the Group for the period from 19 May 2005 (the date of the management
buy-out) to 31 March 2006.



The underlying business of the Group has been operated through Brulines Limited
and the following is a summary of the trading results of Brulines Limited for
the three years ended 31 March 2006.   These figures have been extracted without
adjustment from the financial information as set out in the Admission Document.


                                                                 Year ended 31st March
                                                 2004               2005               2006
                                                 £'000              £'000              £'000
Turnover                                         6,847              9,159              12,035
Gross Profit                                     3,265              4,520              5,566
Operating Profit                                 1,081              1,967              2,681



Industry Background

Following a monopolies inquiry into the brewing industry, the UK government
introduced the Beer Orders Act in 1989 in order to control vertical links
between the large brewers and pub retailing with the aim of widening consumer
choice.



Under the terms of the Beer Orders Act, the major brewers with estates in excess
of 2,000 were required either to cease brewing or to free the majority of their
tenanted pub estate from any purchasing Tie.



As a result of the Beer Orders Act, the major brewers started to dispose of a
substantial proportion, if not all, of their estates and independent Pubcos were
formed to acquire these estates, many of which were tenanted estates.



The nature of a tenancy requires the tenant firstly to pay a below market rent
to the Pubco and secondly to purchase, inter alia, beer through the Tie.  The
Pubco's income stream is therefore very dependent on the level of deliveries to
its tenants of products governed by the Tie.



The price at which a tenant, through the Tie, has agreed to purchase beer is
frequently more expensive than those prices for beer available within the
wholesale drinks market, thereby creating an incentive for tenants to purchase
beer in contravention of the Tie.



The Directors believe that Pubcos are aware that unauthorised supply is a
growing concern and that they have largely developed a zero-tolerance attitude
towards buying-out.  Historically, the only information available to the Pubcos
was the volume of beer that had been legitimately purchased by its tenants
through the Tie and not the level of sales made by its tenants.



The potential effect of unauthorised supply for Pubcos can be threefold: loss of
volume discount reduced rent and lower property values resulting from 'apparent'
under trading.



Current Trading and Prospects

The Group continues to trade strongly with sales of over 2,000 new Dispense
Monitoring units in the first four months of the current financial year,
primarily coming from the Enterprise roll out and the Punch replacement and
upgrade programme.



The Directors are also encouraged by further new installations from other
customers such as Belhaven, Eldridge Pope, Camerons and, in particular, Union
Pub Company which has agreed to roll out Dispense Monitoring installations
across the whole of its tenanted estate.



The Group's ongoing high levels of new system sales are substantially increasing
the business' proportion of recurring income streams from associated support
service contracts.  The Directors anticipate continued high levels of new sales
and further growth in the level of support service income as Brulines'
installation base increases. As at 31 July 2006, the Group had over 16,000
Dispense Monitoring System installations.



Following development of its BQM process, the Group has commercial trials
ongoing, with initial results being positive. Further trials of BQM have been
secured with managed house operators and the Group has been encouraged by
interest from Punch following successful BQM trials.  Furthermore, Brulines is
actively involved with Cask Marque in ongoing initiatives on beer quality.



On 31 August 2006, the Group's subsidiary Machine Insite completed the
acquisition of the trade and certain of the assets of CMS, a machine management
business with whom Brulines has developed an AWP machine data management and
analysis product and service with web based technology, resulting in new
business gains for Machine Insite.



Dividend Policy

The declaration and payment of future dividends is subject to the Group's
underlying profitability, working capital future prospects and other factors
deemed to be relevant at the time.



Notwithstanding the above, the Directors believe that the business is
cash-generative and intend to adopt a progressive dividend policy.  The
Directors intend that the first dividend to be paid by the Company will be a
final dividend in respect of the year ending 31 March 2007.


Directors

James William Dickson, BSc, MBA, Chartered Director, aged 47 (Chief Executive)

Prior to joining Brulines in 2003, James had worked in the brewing industry
since 1990.  Following an MBA at IMD, Lausanne in 1989 he joined Scottish &
Newcastle, where he held several posts including Operations Director, and
National Account Director for Pub Groups and Wholesalers. In 1997 James joined
Whitbread as UK Dispense Director before being appointed Marketing & Sales
Director for Heineken.



Mark Hardwick Foster, FCA, aged 44 (Finance Director)

Mark joined the Company in January 2006, having previously been Finance Director
of Harrison & Clough Limited, a large independent distributor of fasteners and
hand tools. Prior to this, Mark had worked as a Financial Controller in National
Power plc, and Chief Financial Accountant at Pubmaster Limited (acquired in 2003
by Punch). Mark trained and qualified as a Chartered Accountant with KPMG. Mark
is also responsible for the Group's company secretarial, human resources
department and central support services department.



Duncan James Noble, aged 32 (Operations Director)

Duncan joined Brulines as Operations Director in July 2003 and was made a
Director of Brulines in December 2003. Prior to joining Brulines, Duncan had
held management roles with Ericsson which he joined after spending 6 years in
the British Army. In addition to being Operations Director, Duncan is also
responsible for the Information Technology and Brand Quality Monitoring
departments. Duncan was made a Director of the Group in May 2006.



James Newman, FCA, MCT, aged 56 (Non-executive Chairman)

James, who was appointed Non-Executive Chairman of the Group in May 2006, was
Chairman of Waste Recycling Group plc until its takeover in July 2003. He was
previously Deputy Chief Executive and Group Finance Director of Kelda Group plc,
and before that Group Finance Director of various public companies, including
BRIDON plc and Watmoughs (Holdings) plc. He is currently non-executive Chairman
of Straight plc and Infoserve Group plc, and is a non-executive director of
Dignity plc, Scott Wilson plc and a number of other companies. He is also a
Governor of Sheffield Hallam University. He is a Chartered Accountant and a
member of the Association of Corporate Treasurers.



Stewart Gilliland, BA (Hons), aged 49 (Non-Executive Director)

Stewart joined the Company as a Non-Executive Director on 2 May 2006. In 1984
following sales roles with Pedigree pet foods, Stewart joined Whitbread's beer
division where he held senior sales and marketing roles, becoming Chief
Executive Officer of this division when the business was acquired by Interbrew
UK in 2001. In September 2003 he was appointed President Canada, and in January
2005 was promoted to Zone President Western Europe, leaving the InBEV business
in January 2006 to return to the UK where he is now Chief Executive of Muller
Dairy (UK) Limited.



                                    - Ends -


                     


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