RNSM Ransom(William)

 

TIDMRNSM 
 
RNS Number : 2084H 
Ransom(William) & Son PLC 
16 February 2010 
 

For immediate release 
                                                 16 February 2010 
 
                            WILLIAM RANSOM & SON PLC 
                            (the "Company", "Ransom") 
             TERMINATION OF MEDIBEE SUPPLY AND LICENSING AGREEMENT 
                              AND DEBT RESTRUCTURE 
 
The Company is pleased to announce that it has today entered into an agreement 
with Bee & Herbal New Zealand Limited (a wholly owned subsidiary of Comvita UK 
Limited) to terminate its supply and licensing agreement of the Medibee range of 
products. The Medibee brand is composed of various manuka honey based products 
imported from New Zealand. 
The Company will receive total cash consideration of GBP360,000 for the 
termination of the licensing agreement. GBP60,000 of the total cash 
consideration is dependent on meeting some performance related conditions. The 
proceeds will be used to reduce the Company's borrowings. 
The Medibee products generated annual sales of approximately GBP1.7m and gross 
margin of approximately GBP0.4m for the year ended March 2009. In the year to 
date the sales and margin generated by Medibee products have reduced 
significantly due to continued material price increases and a corresponding 
reduction in promotions. 
The Company has reached an agreement with its lending bank to convert the 
outstanding balance of its term loan into an overdraft facility. The balance of 
the Company's term loan has reduced substantially from GBP2.6m as at March 2009 
to GBP475,000 following scheduled loan repayments, the proceeds of recent 
disposals, and the monies due to the Company from the Medibee license 
termination. The overdraft facility is a short term facility and therefore does 
not carry specific financial covenants as does the term loan. The total 
overdraft facility following completion of the termination of the Medibee supply 
and licensing agreement is expected to increase by GBP475,000 from its current 
level of GBP100,000 to a total of GBP575,000 of which GBP475,000 will be used by 
the Company to repay the term loan. The overdraft is expected to be reduced by 
at least GBP125,000 by 31 March 2010. 
Ivor Harrison, Chief Executive, commented: 
 
"The board believes that the termination of the Medibee supply and licensing 
agreement is in the best interest of the Company and its stakeholders as the 
divestment further reduces our borrowings. It is consistent with the Company's 
strategy of creating a focused, higher margin, differentiated natural consumer 
healthcare business." 
 
 
William Ransom & Son plc:                                               01462 
443527 
Ivor Harrison, Chief Executive 
 
Numis Securities Limited: 
020 7260 1000 
Nominated Adviser: Michael Meade 
Corporate Broker: James Black 
 
Buchanan Communications:                                              020 
7466 5000 
Charles Ryland /James Strong 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 AGRLLFEIFEIRLII 
 

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