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Toye & Co PLC (TOYE)

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Tuesday 29 January, 2013

Toye & Co PLC

Proposed Disposal of Great Queen Street

RNS Number : 5291W
Toye & Co PLC
29 January 2013




Proposed Disposal of Great Queen Street


Toye & Co plc ("Toye" or "the Company"), the manufacturer of military and masonic regalia, medals, badges and related textiles, announces that it had entered into a conditional agreement to dispose of its property at 19-21 Great Queen Street to the Developer for a maximum consideration of between £2.75 million and £3.25 million.


In view of the size of the Disposal relative to the size of the Company, it is a requirement of the AIM Rules that the Disposal be approved by Shareholders at a general meeting of the Company.  The Disposal is therefore conditional on, inter alia, the passing of the Resolution set out in the Notice as an ordinary resolution of the Company.


A circular has today been posted to Shareholders ("the Circular").  The purpose of the Circular is to provide the background and reason for the Disposal and further details of the Disposal and to set out the Directors' reasons for considering that the Disposal is in the best interests of Toye and its Shareholders as a whole.  In addition, this document contains a notice convening a General Meeting of the Company, to be held at 12.00 noon on 27 February 2013 at the Company's offices, 77 Warstone Lane, Birmingham B18 6NL, at which Shareholders' approval to the resolution necessary to implement the Disposal will be sought.


Background to and reasons for the Disposal


The Directors believe that it is important to respond to the continuously changing requirements of its markets and the current challenging trading environment by introducing the required operational changes to improve performance. Of the Company's three sites one has been occupied for over fifty years, the second for over one hundred years and the third for over two hundred years. During this period the world has changed significantly.


Toye has a lease for a term of 999 years from 17 August 1984 on a significant part of a property at 19-21 Great Queen Street, London WC2B 5BE ("the Property"), which is currently the Company's registered office. The Property has been an increasingly expensive and underutilised facility yet has had strategic importance in serving the Masonic community and other markets from a recognised address. The Directors believe that the Company will only be able to retain and nurture its manufacturing skills by achieving efficiencies in the manufacturing process improving working conditions and retaining and growing its customer base by concentrating on delivering exceptional service.


Following a recent review of the Company's property assets it was agreed to investigate realising the value in the Property to allow the Company to take advantage of other investment opportunities. As a result, the Company has entered into a conditional agreement with the Developer to dispose of the Property for a maximum consideration of £3.25 million, the terms and conditions of which are summarised below and as set out in Part II of the Circular.


The reasons for the Disposal are, inter alia, as follows:


·      Holding the leasehold is an inefficient use of Shareholders' funds. A very large amount of capital (approximately £3 million) is tied up in the Property's shop and offices compared with the overall capital within the business;

·      The sales office could be well serviced either from the Midlands or a smaller less expensive London premises;

·      A proportion of the funds will be used to repay all Group debt of approximately £1.5 million;

·      The Board believes the proceeds are fair as they exceed all other offers for the purchase of the Property; and

·      The Board has considered sale and lease options and determined that an outright sale was the best for the business.


It is not expected that Toye will be required to vacate the Property for at least six months. During this period the Board will assess the need for alternative premises in London.


Current trading and prospects


Trading for the year ended 31 December 2012 was in line with management expectations as has been the start to 2013. It is not anticipated that the Disposal will have a material impact on trading performance although, following Completion, there will be a cost saving of charges associated with the Property.


It remains the case that the overall economic environment, and the markets that Toye operate in, are difficult. However, the Company has a very long history and has seen its fair share of challenges. The Directors are therefore confident of the Company's ability to react to changing conditions whilst maintaining its high standards of craftsmanship through investing in the business following the Disposal.


Principal terms and conditions of the Disposal Agreements


Toye has entered into a conditional agreement with the Developer to dispose of the Property for a maximum consideration of between £2.75 million and £3.25 million, depending upon planning consents.


There are three agreements entered into between Toye and the Developer:


·      Loan Facility Agreement - an unconditional agreement between (1) the Company and (2) the Developer where by the Developer has agreed to loan Toye £2.5 million at an annual coupon of 3.75 per cent. above Bank of England base rate, repayable on Completion;

·      Legal Charge - a first fixed charge over the Company's leasehold interest in the Property; and

·      Sale Agreement - a conditional agreement between (1) the Company and (2) the Developer for the sale of the Company's interest in the Property with the Developer.


A more detailed summary of the material terms of each of the Disposal Agreements is set out in the Circular.


Appointment of New Directors


Following the Company entering into the unconditional Loan Facility Agreement and Legal Charge, Robin Edwards and Robert Luck, both directors of the Developer, have been appointed as non-executive directors of Toye.


Robin Warwick Edwards (aged 66)

Mr Edwards is a Chartered Accountant and a Fund Manager who for fifteen years managed one of Europe's largest global macro funds. More recently he has become involved as a director and shareholder in a number of businesses, which benefit from his commercial, financial and marketing background and expertise.


He is also a Trustee of Policy Exchange the leading political think-tank and a director of The Queen's Club, Central London's premier lawn tennis and rackets club. Directorships in the last five years are as follows:



London and Central European Investments Limited

Cresta Homes Plc

Cresta Homes (Hoddeston) Limited

Sold Out Musical Entertainments Limited

Cresta Homes (Hayes) Limited

New Place Investments Limited

Latis Homes Limited

141 Church Road Limited

Stanborough Court Developments Limited

Palace Investments Limited

Victoria Gardens Developments Limited

10 West Borough limited

Stability Investments Limited

Ennismore Gardens Limited

Resigned (2012)

Carbon Plus Capital LLP

Carbonex Capital LLP

Hemex LLP

Hemex Wind (1) Limited

Queens Club Limited

Queens Club Holdings Limited

Queens Ground Limited

Policy Exchange Limited

Ideas Space Limited

Sabre Fund Management Limited

Maxim Fund Management Limited

Eiger Capital Limited

In Liquidation (2008)


Mr Edwards was a director of Eiger Capital Limited which was placed into liquidation in October 2008.  The shortfall to creditors is approximately £2 million and the liquidation is ongoing.


There are no other disclosures required in accordance with Schedule 2(g) of the AIM Rules.


Robert James Luck (aged 31)

Mr Luck is the co-founder and Chief Executive of Latis Homes Limited, a private property development and investment company focused on sustainable design and innovation. He has proven ability in company and project management in the UK and overseas, and has a particular interest in eco-housing, conservation and sustainable development.


He has a first class degree in Architecture from the University of Nottingham and completed the Diploma in Architecture at the Architectural Association in London. Mr Luck has a real passion for good design, craftsmanship and as a Birmingham man a great interest in the manufacturing heritage of the Midlands region.  Robert has experience in many of the Company's markets through being directly involved in several of them



Stability Investments Limited

Latis Homes Limited

141 Church Road Limited

Stanborough Court Developments Limited

Latis Land Limited

Latis Limited

Webmann International Limited


There are no other disclosures required in accordance with Schedule 2(g) of the AIM Rules.


Irrevocable undertakings


The Directors and their related parties have undertaken to vote in favour of the resolution to approve the Disposal to be proposed at the General Meeting, representing 1,394,693 Ordinary Shares in issue at the date, comprising approximately 62.04 per cent. of the Ordinary Shares.


All capitalised terms in this announcement are as defined in the Circular which is available from the Company's website,



Toye & Company plc

Fiona Toye, Chief Executive

+44 (0) 20 7242 0471

WH Ireland Limited

Marc Davies / Mike Coe

+44 (0) 117 945 3470


This information is provided by RNS
The company news service from the London Stock Exchange

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