Pre Close Trading Statement
Dowlis Corporate Solutions plc
17 January 2006
Date: 17 January 2006
On behalf of: Dowlis Corporate Solutions plc ('the Group' or 'Dowlis')
Embargoed: 0700hrs
Dowlis Corporate Solutions plc
Pre Close Trading Statement
Dowlis Corporate Solutions plc, the marketing solutions group is today pleased
to provide the market with its first update since the Group's shares were
admitted to AIM on 7 November 2005. The Group will announce its maiden set of
results in March 2006.
At Admission, the Group stated that trading for the year to date was proceeding
in line with expectations; this trend was continued during the final weeks of
the year. Progress has been made in all four sales channels namely Promotional
Products where the Group's customers include the AA, Airbus, GlaxoSmithKline,
Legal & General and 3; Trade Only, a business that supports over 600
distributors and whose the annual trade show takes place this week; Information
Services, the fast-growing provider of industry specific information to
suppliers and distributors; and, Communications, the Group's design and
advertising business.
In addition, the Group is pleased to announce the successful outcome of
discussions with two third parties, to acquire the Envoy Catalogue from
Advertising Products Group Limited, and with eCompanyStore.
Envoy Catalogue
The Group yesterday, 16 January 2006, acquired the business and goodwill of
Envoy Catalogue, a promotional product catalogue, for a maximum consideration of
£200,000. The initial consideration will be paid £100,000 in cash and £70,000
through the issue of 147,368 new ordinary shares in Dowlis Corporate Solutions
plc. The deferred consideration of £30,000 will be payable in cash in April
2007 subject to the achievement of certain performance criteria. The
acquisition is in line with Dowlis's strategy of providing product information
and selling resources to UK based distributors.
The Catalogue features promotional merchandise for corporate customers and is
supported by over 60 suppliers with approximately 50,000 catalogues distributed
through 45 regionally separated distributors. The catalogue group will benefit
from adopting Dowlis's leading technology for the efficient management of
product databases and order processing software as well as the Virtual Sample
technology that the group has exclusive rights on for the UK market.
The acquisition relates solely to goodwill and excludes any additional assets or
other balance sheet items. In the year to 30 June 2005, the business had sales
of £414,000 and profit before tax for the year was £111,000. The acquisition is
expected to be earnings enhancing in 2006.
Application will be made for the new ordinary shares to be issued by way of
consideration to be admitted to trading on AIM with the first day of trading
expected to be 20 January 2006.
eCompanyStore
On 14 December 2005, Dowlis signed heads of agreement to enter into a symbiotic
partnership agreement with eCompanyStore ('eCS'), a US-based online
merchandising company.
Under the terms of the two-year agreement, eCS will act as the exclusive
distributor for Dowlis merchandise in the US and Dowlis will also offer an
exclusive reciprocal distribution arrangement in the UK for eCS merchandise.
The agreement is expected to provide improved response times for both Dowlis and
eCS customers respectively, reducing shipping times, and costs associated with
freight and documentation when goods are transported across the Atlantic.
Based in Alpharetta, Georgia, eCS was founded in 1994 under the name
Idus-Howard, changing its name in 1998 to reflect the company's focus on using
what was at that time innovative e-commerce technology to provide a more
efficient service. eCS has a largely blue-chip client base, which includes
Microsoft, Bayer and HBO. In the year to 31 December 2004 eCS turnover was
US$34million.
Martin Varley, Chief Executive Officer of Dowlis Corporate Solutions, commented:
'The progress that the team has made in such a short time is very pleasing. As
with many smaller companies, the process of listing on AIM drains much of the
senior resource needed to implement new ideas and grow the business, and I am
delighted that we are now through that process. We are spending our time
continually looking at ways to innovate additional solutions for customers,
identify new markets and opportunities, and take time and cost out of our
processes through the adoption of best practice and the use of technology where
practical.
'We look forward to 2006 with much excitement, and have a clear vision of where
we want to be in the next few years.'
Enquiries:
Dowlis Corporate Solutions plc
Martin Varley (Chief Executive) 0870 224 6677
07775 848 252
Redleaf Communications
Emma Kane/Miranda Good/Wendy Timmons 020 7955 1410
Corporate Synergy PLC
Gavin Haywood 020 7448 4450
Zeus Capital
Alex Clarkson 0161 831 1512
Notes to Editors:
• Publication quality photographs are available via Redleaf.
• Dowlis has an experienced Board which comprises: Colin Cooke, Chairman, who
has 21 years' experience as a public company director; Martin Varley, Chief
Executive Officer, who has 17 years' experience in the promotional
merchandise industry and has gained an extensive knowledge of the supply
and distribution sectors of the market; David Gray, Finance Director,
formerly finance director of Gowrings PLC for 10 years; and, Keith Willis,
Non Executive Director, who recently received a lifetime achievement award
from PROMOTA in recognition of his 30 years' contribution to the industry.
• It is estimated that the annual UK market for promotional merchandise is £1
billion (source: PROMOTA), which comprises approximately 2,000
distributors supported by 600 UK based suppliers of a wide range of
products and services.
• The Group currently has four primary sales channels:
Promotional Products - the Directors believe Dowlis is the second largest
distributor of promotional products in the UK. It sources products from
around the World which are then personalised in accordance with the
client's brand and design guidelines in support of their wider marketing
campaigns.
Trade Only(TM) - suppliers to independent distributors via an annual
catalogue, exhibition and website. Trade Only(TM) receives orders from
approximately 25 per cent of the UK's distributors who access the Trade
Only(TM) range which features 600 products all of which are branded to the
distributors' specification. Trade Only(TM) has entered into a letter of
intent with Technologo to provide Trade Only(TM) and its distributor
customers with the opportunity to show their clients branded products on
screen before they order.
Information Services - a bespoke, industry specific website that contains
detailed information on over 1,000 products including full details of the
supplier and also detailed product information. Revenue is generated from
suppliers wishing to be featured on the website.
Dowlis Communications - a design agency based in Manchester, providing a
range of services which cover all aspects of design and marketing,
including print and brochure production, media planning and buying. It is
expected that Dowlis Communications will provide the platform for a number
of potential additional services that can be added to the Group's offering
as the strategy to focus on marketing services is developed.
The Group's offering is underpinned by its investment in software and
information technology. Its bespoke sales order processing system and
product database was carefully designed to complement the strategy of the
Group. The Directors believe that it will provide the Group with a
competitive advantage over others in the industry.
This information is provided by RNS
The company news service from the London Stock Exchange