Business
Disposal
Disposal.
About this update from First Property Group Plc
[{"type":"text","content":"\n \n\n\n\n\n\nRNS Number : 0980D First Property Group PLC 17 March 2011 \n \n\n\n\n\n\nDate:\n\n\n17 March 2011\n\n\n\n\nOn behalf of:\n\n\nFirst Property Group plc (\"First Property\" or the \"Group\")\n\n\n\n\nEmbargoed for: \n\n\n0700hrs \n\n\n\n\n \nFirst Property Group plc\nDisposal of 60% shareholding in First Property Services Limited \n \nThe Board of First Property announces that it has sold its entire shareholding in First Property Services Limited (\"FPS\"), its mechanical & electrical (M&E) installation and maintenance contractor, to FPS's Managing Director, Philip Moore, for £170,000 in cash.\n \nThe sale to Philip Moore (who currently holds 40% of the shares in FPS) is a related party transaction under the AIM Rules. \n \nThe Board has concluded that the disposal is in the best interests of the Group for the following reasons:\n \n1) FPS's activities are distinct from the main business of First Property and there are no material synergies between the businesses. \n \n2) Recent results of FPS reflect the increasingly difficult environment for installation and maintenance contractors. Pre-tax profit in the year ended 31 March 2010 was £179,000. However, the continuing difficult markets have resulted in FPS making an un-audited pre-tax loss of £137,000 in the first eleven months of the current year.\n \nThe consideration is payable as to £20,000 on completion and the balance over a 24 month period, attracting interest at a rate of 2.5% per annum over Barclays bank base rate on the outstanding balance for the first 12 months and 7% per annum over Barclays Bank base rate thereafter. In addition, First Property will share proportionately in any profits of FPS based on the amount earned by it in each successive accounting period until the entire consideration has been paid. \n \nThe Directors, having consulted First Property's NOMAD, Arden Partners plc, believe that the terms of the disposal are fair and reasonable insofar as its shareholders are concerned. \n \nShareholders' funds of FPS, at 31 March 2010, were some £355,000, of which £213,000 were attributable to First Property. As a result of losses made by FPS during the year, the carrying value of First Property's 60 per cent interest in FPS immediately prior to the sale, was approximately £150,000. Th...