ISD Imagesound

RNS Number:2199S
Imagesound PLC
14 April 2008


14 April 2008

                         Imagesound plc (the "Company")

          Notice of AGM and proposed cancellation of admission to AIM

Imagesound plc (AIM: ISD.L), the UK's leading listed supplier of in-store music,
radio and TV services to the branded retail and leisure sectors, will shortly
post a circular to shareholders setting out the notice of the Annual General
Meeting to be held on Wednesday 14 May 2008 at 11:00 a.m. at Venture Way,
Dunston Technology Park, Chesterfield, Derbyshire S41 8NE.

Amongst the resolutions that make up the normal business of the Annual General
Meeting, the Notice includes a resolution for shareholders to approve the
cancellation of the admission of the Company's Ordinary Shares to trading on AIM
(the "Resolution").

Background to the proposed cancellation of admission to trading on AIM

Having carefully considered the matter for some time and having consulted with
the Company's major shareholders, the Board has concluded that it is no longer
appropriate for the Company's Ordinary Shares to continue to be admitted to
trading on AIM. The principal reasons for seeking a cancellation of the
admission are set out below:

One of the primary reasons for the Company's admission to AIM in August 2004 was
its intention to use the equity markets to finance acquisitions. However,
further fundraising has not been feasible due to the weakened valuation of the
Ordinary Shares and consequently, the Company's acquisitions over the last 2
years have been funded by bank debt as opposed to equity finance.

Since the Company's initial flotation on AIM, the share price of the Ordinary
Shares has been erratic and has not, in the Board's opinion, reflected the
performance or prospects of the Company. Despite improvements in the Company's
trading performance over the last 2 years, the Company's share price on AIM has
continued to fall. By way of example, the Company's share price was 20.25p on 23
January 2007 compared to 7.00p on 10 April 2008, a decline of 65% during a
period in which the Company improved its trading performance and delivered
results in line with expectations. At the current share price the Company is
valued at just �4.4 million and trades on a historic adjusted price earnings
ratio of just 3.9 times. In addition, there is very little liquidity in the
Company's shares and, despite being admitted to trading on AIM, Shareholders
cannot easily buy or sell Ordinary Shares in the Company in any event.

The Board also believes that the ongoing high costs and regulatory requirements
of maintaining a quotation on AIM can no longer be justified in relation to the
Company. The Board anticipates that the Company will make annual savings in
excess of �150,000 as a result of the cancellation of its admission to trading
on AIM. The Board believes that these funds can be better deployed for
shareholders by continued investment in the growth of the business.

Finally, a disproportionate amount of senior management time is spent on meeting
AIM requirements such as investor relations and disclosure requirements.
Following cancellation of the admission to trading on AIM, senior management can
focus on the continued growth and development of the business and on making the
Company more profitable.

Whilst the Board believes that the proposed cancellation is in the Shareholders'
interest, it recognises that cancelling admission to trading on AIM will make it
more difficult for Shareholders to sell or buy Ordinary Shares should they so
wish. Accordingly, the Board intends to appoint a market maker as soon as is
practicable from the date of delisting. This will be a matched bargain facility
(the "Facility") under which the market maker will offer a price valuation to
any Shareholders wishing to buy or sell shares in the Company, and will maintain
a list of any prospective buyers or sellers. The Facility will be available
throughout the year in normal business hours. The Board intends the market maker
to match buyer and seller at an agreed price and at appropriate commission rates
for both buyer and seller. Details of this service will be posted on the
Company's website as soon as is practicable following cancellation of admission
should the proposed Resolution be passed.

The Board also intends that following the cancellation of admission to trading
on AIM, the Company will remain as a public limited company and will continue to
comply with all accounting and regulatory requirements expected of a company of
this status and the Board will continue to update Shareholders as appropriate
but at least annually on the Company's progress and trading performance.

Subject to changes in legislation, there is no requirement to alter or amend the
Company's current memorandum and articles of association in order to realise
cancellation of admission to trading on AIM.

The Resolution to cancel admission to trading on AIM requires the approval of 75
per cent. of those present and entitled to vote at the meeting or voting by
proxy. If approved, it is anticipated that trading in the Ordinary Shares on AIM
will cease at close of business on 22 May 2008, with cancellation on AIM taking
effect at 8.00 a.m. on 23 May 2008.

Recommendation

The Board consider that the proposal to cancel the Company's shares from
admission to AIM is in the best interests of the Company and its Shareholders as
a whole and unanimously recommend Shareholders to vote in favour of the
Resolution to be proposed at the Annual General Meeting, as they intend to do in
respect of their beneficial holdings, amounting in aggregate to 17,193,683
Ordinary Shares, representing approximately 27.2 per cent. of the Company's
issued Ordinary Shares.

Derek Mapp, Chairman of Imagesound said:

"After much internal debate and discussions with our major shareholders, the
Board has concluded that admission to AIM is no longer serving the best
interests of the Company or its Shareholders. Without being able to use our
equity to help grow the Company by acquisition, AIM simply adds additional cost
and administrative burdens on the business and diverts funds that can be better
deployed elsewhere.

"We see this as a positive move for the Company and it demonstrates the Board's
confidence in the business and its future. We hope that those shareholders who
wish to will remain involved in the business will do so, and thank those that do
not wish to for their support thus far. Our trading remains in line with our
expectations and we are continuing to explore opportunities to further expand
the business, particularly in Europe and the Middle East."

Copies of the Notice of Annual General Meeting are available on the Company's
website at www.imagesound.co.uk

For further information:

Imagesound plc
Derek Mapp, Executive Chairman                     Tel: 01246 572 990

Collins Stewart
Seema Paterson/Lorraine Delannoy                   Tel: 020 7523 8350

Hogarth Partnership
James Longfield/Sarah Richardson                   Tel: 020 7357 9477

Notes to Editors

Imagesound plc is the UK's leading listed supplier of in-store music, radio and
TV services. It provides music and messaging services to over 50 leading branded
retail and leisure chains reaching over 17,000 subscriber outlets.

Customers include Superdrug, B&Q, Foot Locker, Carphone Warehouse, McDonald's,
Subway, Next, Focus, Starbucks, River Island, O'Neill's, Pizza Express, Hyatt,
Starwood, Marriott and JJB.

Imagesound plc recently celebrated its 10th Anniversary. During this time the
business has evolved from a small, UK based company, to an international player
with an impressive global client list. Imagesound plc was admitted to the AIM
market of the London Stock Exchange in August 2004. Since this time the Group
has embarked on an organic growth and acquisition strategy and has made six
acquisitions in the sector. The latest acquisition of TSC acquired in July 2007
was fully integrated within 6 months, and added names such as Starbucks, Cafe
Nero, Alliance & Leicester and GAP to the client list.



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

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