PEG.GB Petards Group Plc

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RNS Number : 8841N

Petards Group PLC

14 May 2018

14 May 2018

Petards Group plc

("Petards" or "the Company")

Completion of Acquisition of RTS Solutions

Petards, the AIM quoted developer of advanced security and surveillance systems is pleased to announce that it has acquired the entire issued share capital of RTS Solutions (Holdings) Limited and RTS Solutions (UK) Limited (together "RTS").

RTS (www.rts-solutions.net) is a specialist transportation software engineering company delivering stable and resilient, web-based, real-time safety critical applications, whose main customers are currently Network Rail and its Tier 1 contractors. It supplies end-to-end integrated solutions that support the UK rail network infrastructure by maximising effectiveness for operational, engineering and maintenance programmes. These solutions include incident and fault management, work site management, resource management, machine plant management, and asset/inventory management applications.

RTS's unaudited accounts for the year ended 31 March 2017 show that it generated revenues of GBP778,000 and reported a profit before tax of GBP262,000. Over 50% of these revenues related to recurring software licences, maintenance and support contracts. The business is debt free and has a history of excellent cash generation. Revenues recorded in the unaudited management accounts for the year ended 31 March 2018 totalled approximately GBP800,000.

The acquisition consideration comprises an initial cash payment of GBP1.0 million and deferred consideration of up to GBP0.5 million conditional upon RTS meeting certain financial and other targets during the 12 months ending 31 March 2019.

A payment of GBP0.6 million will also be made on a pound for pound basis for surplus cash in RTS's balance sheet.

Accordingly, the total maximum consideration will be GBP1.5 million for the business plus the GBP0.6 million payment for surplus cash on a pound for pound basis. The consideration is being satisfied in cash from Petards existing cash reserves and a new GBP1.25 million five year bank term loan.

RTS will operate as an independent company within the Petards Group from its offices at Holbeck Rail Depot in Leeds and all staff will be retained within the business as part of the acquisition.

The Directors believe that the acquisition will strengthen the Group's software solutions offering and that it will provide the Group with an entry into the UK rail infrastructure market complementing the Group's existing eyeTrain on-board train systems. RTS has a strong base of recurring revenues and the Directors believe that it will be earnings accretive in its first full year as part of the Petards Group.

Commenting, Raschid Abdullah, Petards Chairman said:

"We are delighted to welcome RTS and its staff to the Petards Group and look forward to working with them to further develop and grow its business. This acquisition marks a further step in the broadening of the Group's portfolio of products, providing the opportunity to expand its earnings and enhance shareholder value."

This announcement includes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

For further information:

 
 Petards Group plc            www.petards.com 
 Raschid Abdullah, Chairman   Mb: 07768 905 004 
 
 WH Ireland Limited, Nomad    www.whirelandcb.com 
  and Joint Broker 
 Mike Coe, Ed Allsopp         Tel: 0117 945 3470 
 
 Hybridan LLP, Joint Broker   www.hybridan.com 
 Claire Louise Noyce          Tel: 020 3764 2341 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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May 14, 2018 02:00 ET (06:00 GMT)

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