MNK Monkleigh

RNS Number:6126A
Monkleigh plc
08 July 2004



RNS Release


8 July 2004

                        Monkleigh plc - Admission to AIM


Monkleigh plc ("the Company") announces that its shares have today been admitted
to trading on AIM.  The shares in the Company have been placed at 10 pence per
share (the "Placing Price"), at which the Company will have a market
capitalisation on listing of #0.725 million.


Details of the Offer


   *The Company has raised #425,000 through the placing of 4,250,000 shares.
    In addition, the Directors of Monkleigh have subscribed a total #80,000 for
    Ordinary Shares bringing the total proceeds to #505,000.


   *Based on the Placing Price of 10 pence per share and the total number of
    shares in issue of 7,250,025, the market capitalisation of the Company at
    listing will be #0.725 million.


   *The listing will become effective and unconditional dealings in the
    shares will commence at 0800 hours on 8 July 2004 under the ticker symbol
    MNK.L.


   *Corporate Synergy Plc is acting as Nominated Adviser and Broker to the
    Company.



Commenting on the announcement, Ric Yerbury, Chief Executive of Monkleigh said:


"We are pleased to have completed our IPO, which marks the first stage in our
evolution as a fully integrated event marketing services group.  Monkleigh is
actively engaged in a number of preliminary discussions with potential
acquisition targets within the events management, corporate hospitality and
related niche supplier businesses.  The funds raised from the Offer will enable
us to complete our due diligence on certain target companies and we aim to make
our first acquisitions quickly.  We look forward to the future with confidence
and hope to make further announcements as to our progress in due course."


Enquiries:


Ray Pierce, Chairman
Monkleigh plc
07976 282820


Ric Yerbury, Chief Executive
Monkleigh plc               
020 7399 7710
07968 063023


Dwight Mighty
Corporate Synergy Plc
020 7626 2244


Katharine Sharkey/Sophie Betts
Gresham PR Ltd
020 7404 9000



Further Information

Background

Monkleigh is a new company which intends to buy, invest in and develop events
management, corporate hospitality and related niche supplier businesses to form
an integrated event marketing service group. The proceeds raised from the
Placing will be used to fund initial acquisitions and conduct due diligence on
target companies.



Strategy

The Company's strategy is to create, through a combination of acquisitions and
organic growth, a fully integrated national event marketing services company
with a strong brand.  The Company intends to focus on the management of added
value events, principally to the corporate sector, where it is anticipated that
the application of, for example, themes, entertainment, sponsorship and
measurement and assessment services will increase margins.



Market Opportunity

Few integrated service providers in the sector

The event management and corporate hospitality sectors are fragmented,
comprising a few large and many small operators, each often providing a narrow
range of services. Consequently, larger companies, with a variety of event
management and corporate hospitality requirements, have had to obtain the
services they require from a range of providers. The Directors believe that
corporate customers, in particular, would prefer to source all event management
and corporate hospitality services they require from a single provider.


A stabilised and growing sector

Keynote estimates that the UK corporate hospitality market has grown from #620m
in 1997 to #760m in 2001, approximately a 5.2 percent compound average growth
over the period.

The market is split into two main categories: client-based and staff-based
hospitality.  The market for client-based hospitality is expanding as companies
realise that corporate hospitality is playing an increasing role in their
integrated marketing communications strategies, especially for service business.

The main product sectors for corporate hospitality are spectator sports,
participatory activities and sports, other sport-related activities and arts and
culture. Spectator sports are the key component accounting for nearly two thirds
of all corporate hospitality revenue.

In the early 1990s, the corporate hospitality market was affected by the
downturn in economic conditions.  Keynote believes that since then the quality
and expectation of corporate hospitality has changed and the market is now less
vulnerable to changes in economic conditions.  Keynote concludes that this
change is a result of corporate hospitality becoming an integral part of a
company's marketing, which makes corporate hospitality a requirement
irrespective of economic conditions.

Keynote states that prospects for the corporate hospitality industry are
favourable, with the market growing, driven by the spectator sport sector. It
forecasts that the market will continue to grow at a rate of between four and
five percent per annum, in real terms, valuing the market at #910m by 2005.

These trends, together with the generally stable UK economy, have led the
Directors to believe that the opportunity now exists to establish and grow a
substantial integrated events brand.


Acquisitions Criteria

Whilst the Directors intend to adopt a flexible approach in considering
acquisitions, the principal criteria that will be applied when considering
potential acquisitions are:


* UK based;

* established corporate customer base;

* cash generative and with a strong gross profit margin;

* scope for integration in order to obtain synergies in marketing, lower
  overheads and widen the service range; and

* vendor willingness to accept equity and performance-related
  consideration structures.


Where appropriate the Company will consider acquiring related sector supplier
companies where client base and margin control can bring enhanced earnings to
shareholders.

The Directors believe that the majority of opportunities will be sourced from
their own contacts.  The Directors are in preliminary discussions with a number
of potential acquisition targets.  The Directors believe that the visibility of
the Company and its declared strategy following Admission will assist in finding
further suitable targets.

Pending any such acquisition, the Company's cash resources will be placed in an
interest bearing deposit or invested in short term money market instruments.
Shareholders will be kept informed as to the progress of proposed acquisitions.
The Directors will keep the Company's running costs to an absolute minimum
pending completion of an acquisition in order to preserve the Company's cash
resources.

Prospective shareholders should be aware that an investment in the Company may
need to be for the long term in order to allow time for the Directors to
implement their strategy.


Acquired business integration

The Directors consider that the challenges associated with the acquisition of a
number of small businesses include administrative issues such as financial
reporting and the integration of new management. To deal with these issues,
Monkleigh intends to employ external management assessment processes in order to
develop an integration strategy for all senior managers. This will, the
Directors believe, ensure the establishment, as far as is possible, of a common
mindset and focus for the future development of Monkleigh.

The Directors feel that in order to deliver the synergy benefits that are
available through the planned acquisition programme, it will be important for
Monkleigh to have clear and defined objectives. At the centre of this will be
coordinated CRM systems, which the Directors intend to put in place to manage
the existing client databases from the incoming businesses and the development
of a focussed strategy by all management in order to maximise revenues.

The Directors intend to introduce central financial reporting systems to reduce
overheads and ensure accurate and timely financial reporting.


Listing Rationale

The Directors believe that an AIM listing will benefit the Company as follows:

*   Corporate profile

    The Directors believe that the performance of any companies or businesses
    acquired will benefit from the status of being part of a quoted company.  
    The Directors believe that this status will give the Company additional
    flexibility in its negotiation for acquisitions in the way it can structure 
    consideration payments.

*   Acquisition consideration

    The Directors believe that the issue of quoted shares as consideration will
    generally be more attractive to vendors than the issue of unquoted shares
    and they intend to finance acquisitions in this way when appropriate.

*   Access to capital markets

    The Company may need to raise further funds in the future to develop its
    business or to finance any cash element of consideration for any 
    acquisitions.  In the opinion of the Directors, the cost of capital for a 
    quoted company should be lower and the capital should be more freely 
    available than for an equivalent unquoted company.

*   Incentive for staff

    The Directors consider that the attraction and retention of key staff 
    through the use of share options will be important to the Company's 
    development.  They consider that the ability to grant options over quoted     
    shares is potentially more attractive to key executives than the grant of 
    options over unquoted shares.








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

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