TMCnet News
SURETRACK MONITORING PLC - Proposed Placing & Admission to AIMJul 09, 2010 (PR Newswire Europe via COMTEX) -- 9 July 2010 SureTrack Monitoring plc ("SureTrack" or "the Company") Proposed Placing to raise approximately GBP1.42 million, Capital Reorganisation and admission to trading on AIM SureTrack (PLUS: STMP), one of the UK's leading asset protection, cash security, crime deterrent and tracking businesses, is pleased to announce that it has today posted to shareholders an AIM admission document and a notice to hold a general meeting. HIGHLIGHTS * GBP1.42 million raised by way of a placing of 236,066,670 New Ordinary Shares at 0.6 pence per share * Dealings expected to commence on AIM on 3 August 2010 * Blue Chip client base, including Ford UK, Network Rail, WS Atkins and UK Mail * New products launched * Significant opportunities for growth throughout UK and Europe Will Hirons, Managing Director, SureTrack Monitoring commented: "The fundraising and Admission to AIM will allow us to continue to expand the business and to take advantage of the opportunities that we have developed in both the UK and Europe. We are encouraged by the recent progress made by the Company and we are in active negotiations with a number of potential customers for the Company's products and as result we are very positive regarding the prospects for the business in the medium term."" The Directors of the Issuer accept responsibility for this announcement. For further information contact: SureTrack Monitoring plc Tel: 01926 863630 Will Hirons, Managing Director Merchant John East Securities Limited (Nominated Adviser and Broker) Simon Clements / Bidhi Bhoma - Nominated Adviser Tel: 020 7628 2200 Graeme Cull - Corporate Broking Bridge Hall Corporate Finance Limited (PLUS Adviser) Tel: 020 7337 9705 Alex Benger Lothbury Financial Services (Financial PR) Tel: 020 7868 2010 Michael Padley/Simon Astley Introduction The Company has today announced that it has conditionally raised GBP1.42 million by way of a placing of 236,066,670 New Ordinary Shares at 0.6 pence per share and intends to seek cancellation of the Existing Ordinary Shares from trading on PLUS and apply for the admission of the Enlarged Issued Share Capital to trading on AIM. The Proposals are conditional, inter alia, on the passing of the Resolutions and on Admission. It is expected that Admission will become effective and dealings in the Enlarged Issued Share Capital will commence on AIM on 3 August 2010. Pursuant to Rule 81 and Appendix 6 of the PLUS Rules for Issuers, PLUS does not require the issuer to give Shareholders a period of 10 business days to object to the intended withdrawal of its securities from the PLUS Markets as the issuer has made an application for admission of its securities to another market of equivalent regulatory standing. Information on the Company SureTrack Monitoring plc was established in April 2007. The Company has two wholly owned subsidiaries, Sure-Track Europe and IBP, both of which specialise in the supply of products to the asset protection and recovery markets. Sure-Track Europe supplies proprietary GSM/GPRS/RF tracking devices to its customers, based both in the UK and throughout Europe, via distributors and/or through direct sales. Sure-Track Europe has contracts with a number of leading companies including Ford, Atkins and UK Mail and has secured regular orders from Network Rail and Elddis Caravans. IBP supplies a suite of products to its UK and European clients that focus on deterring or reducing the incidence of robbery, primarily related to cash and protecting the client's employees and customers from violent crime. IBP's clients include a number of financial institutions, a bank, a major supermarket, high street pharmacies and several police forces. Sure-Track Europe Sure-Track Europe has been operating within the GSM/GPRS tracking, monitoring, selling and recovery market for over seven years. It was founded in 2002, as a vendor of monitoring equipment and a service provider initially to the plant and equipment market. In 2007, it was acquired by Boss Monitoring Group plc. The enlarged group, which was renamed SureTrack Monitoring plc, was admitted to trading on PLUS in July 2007 at which time it was focused on the asset protection and recovery markets. The move to PLUS provided the opportunity to significantly expand operations and to raise capital to allow it to develop its own product range and software platform to bring Sure-Track Europe's elements of the various services offered in-house. The Company previously marketed a GSM/RF tracking device manufactured by a Norwegian company, ETS (Electronic Tracking Systems), called "mtrack" which was distributed by Sure-Track Europe branded as "MT1". Following the move to PLUS it developed a proprietary GSM/GPRS tracking device which was branded "MT2" and in November 2007 the Group began testing the first working prototype. The MT2 product entered production in 2009 and is Sure-Track Europe's primary product. Further details of the MT2 are set out below. The MT1 product is no longer sold by the Company; however, the MTI product is still monitored by Sure-Track Europe on its software platform. The MT2 device The MT2 device, when fitted to an asset, enables the asset to be tracked accurately to a distance of one metre using a combination of GSM/GPRS and RF signals. By not having to rely on GPS systems' need to "see the sky", the device is able to provide the location of an asset while inside a closed vehicle, in a multi-storey car park or inside a garage. The MT2 is configured by a monitoring station using an SMS text message system. These messages allow the MT2's alarm modes to be changed to suit the customer's needs and include motion and tamper alarms. The unit was designed using a full power management system and the battery pack was purpose-designed and built for optimum performance, giving the MT2 up to a three-year life before a battery change is required. Because it does not need to be hardwired to an external power source, such as a car battery, it has no electrical leads that would help a thief to detect the device once in situ or compromise a vehicle warranty. In active mode, if an asset is stolen, the motion sensor switches the device into alarm mode and the radio beacon will begin transmitting its signal. The location of the device can then be established and tracked on a digital map using an advanced GSM positioning system ("STEPS"). This system is up to ten times more accurate than the existing platforms operated by all major GSM networks. The Company has a network of fully trained specialist finders across the UK who have all attended a manufacturer approved training course and invested in their own recovery equipment. Finders work on a sub-contract basis, with many coming from security, military and police backgrounds. In the event of an asset being stolen, the Company will follow a procedure to ensure that the unit is communicating with the monitoring desk. If required by the customer, the Company then assigns a finder who will be dispatched to locate the unit. The monitoring desk handles all liaisons required between the finder, the police and the customer in order to get the asset located, recovered and returned to its rightful owner in the most efficient way. The cost to the customer of the MT2 is a one off purchase price for the hardware, with an annual renewable monitoring subscription per unit. This subscription includes SIM line rental, server hosting and 24/7 monitoring via the Group's bureau desk. Every two to three years, the units are required to be serviced by Sure-Track Europe. A charge is levied to the user for this service. The principal reason for the units needing to be serviced is for battery replacement. The unit notifies the monitoring desk as the battery begins to deteriorate, so the customer can be alerted. Upon receipt of a low battery warning the unit will need to be removed from the asset and returned to the service centre. The current turnaround time for units requiring standard servicing is approximately five working days. If the services of a finder are required, costs are based on a flat fee for the first nine hours. In exceptional circumstances, a find may not be completed within this time frame, at which point a reassessment of the situation with the customer, finder and monitoring desk is carried out. If it is decided that there is a benefit from continuing with the search then further fees are negotiated between all parties. The recovery success rates of tracking products generally depend on the device not being discovered and destroyed. The majority of tracking products available utilise GPS technology. The Directors believe that these devices typically require a greater quantity of power than the MT2 and as a result have to be wired to an electricity source either permanently or on an intermittent basis to recharge the batteries, which makes the device easier to find and disable. Customers are also limited as to the number of places on an asset in which to locate a GPS device because it needs to have a clear satellite link and effectively `see the sky'. Being a GSM device, the MT2 generally provides far more flexibility as to the positioning of the device in the asset. It also has no requirement for an external power supply, making it possible to hide the device in more places within an asset and thus making it more covert and much harder to find. The MT2 also spends most of the time `asleep' in a hibernation mode, during which time it is not detectable by any scanners thieves may use to check for tracking devices. The Directors believe that the success of the Company lies not only in the strength of their products but also the amount of experience the Company has in the industry and the fact that their services are managed in-house, resulting, in the Directors' opinion, in a higher level of service at a lower cost to the end user. Sure-Track Europe customer base Sure-Track Europe has an installed base of around 2,000 units which provides Sure-Track Europe with recurring annual revenues. Customers include Ford, Network Rail, Elddis and Hobby Caravans, Atkins, Selwood (the UK's largest independent plant hire company), UK Mail and Bobcat. Ford Negotiations and product testing have been ongoing with Ford for the last year. On 7 June 2010 the MT2 device was confirmed as an approved dealer fit accessory for commercial vehicles and cars and was allocated a Ford part number. The Directors believe that this should optimise the sales opportunity within Ford's network of independent dealers and as it can be included in the customer financing package and offers an immediate saving on vehicle insurance, is expected to generate significant unit sales for Sure-Track Europe. Network Rail Network Rail has historically used tracking devices to protect against rail-side copper cable theft. It now uses the MT2 for this purpose and a roll out programme to replace/transfer existing devices is in place. In addition, discussions are already taking place with a view to using the MT2 in other health and safety related projects within Network Rail. To date, the Company has supplied 275 MT2 units and is set to provide a further 300 units by the end of July 2010. In addition to this there is the intention to reprogram 700 existing MT1 units and take over the ongoing servicing contract for these units during the next 12 months. Elddis Elddis, a major UK caravan manufacturer, and Sure-Track Europe have been working together over the last eighteen months, carrying out full technical due diligence and testing of the MT2. This has resulted more than 100 independent show rooms across the UK, Sure-Track Europe and Elddis are currently rolling out a dealer training programme to ensure that all dealerships carry marketing material and are aware of the product and its benefits to both them and the customer. Due to the success of the above, Elddis has commenced with a line fit programme for the Buccaneer range. The Directors believe the strength of the Sure-Track Europe offering in the caravan market is that its product does not rely on the device battery being recharged regularly. This can cause issues when the caravan is in a location without a reliable power supply, or if the device is simply not charged prior to use/regularly. The benefit of the MT2 is that it does not require charging and can operate efficiently independent of a power supply until the asset is located. Atkins Global ("Atkins") Atkins and Sure-Track Europe have entered into a strategic alliance under which Atkins provides out of hours monitoring for Sure-Track Europe. Atkins is also promoting the MT2 externally to its existing customer and supplier base. To date, the Company has supplied Atkins with ten MT2 units which are being used in different parts of the business including security, plant, transport and maintenance in order to assess the potential applications for the units. IBP customer base IBP has been established for over 17 years during which time it has worked with financial institutions, retailers and leading cash-in-transit companies in co-operation with police to achieve a target reduction in raids and other crimes and so help to reduce their security risks. IBP was acquired by the Company in March 2009 for approximately GBP1.7 million with the consideration being satisfied by the issue to the vendors of approximately 97 million Ordinary Shares at a price of 1.75p per share. For reasons of security IBP does not publicise its client list, however its clients include a major supermarket chain, two major high street pharmacies, numerous police forces and a number of financial institutions including coverage of a nationwide bank network. IBP offers a suite of products focussed on deterring and reducing the incidence of robbery, particularly those robberies involving cash, including: aEURc Smokenote(TM) - designed to ensure, following a raid, that the contents of a cash box are traceable while attracting the attention of potential witnesses. aEURc Smokepack Express(TM) - designed to protect cigarette gantries, which when activated degrade the contents of the gantry so that they cannot be used. aEURc Raid-safe(TM) - an effective way of reducing the amount of cash held in a cashiers till. aEURc Raid-cam(TM) - a trail system which provides video evidence to support prosecutions after a raid. aEURc Smoke-shield(TM) - when activated, releases a dense cloud of white smoke to potentially thwart an attack on an ATM. aEURc Ram-chain(TM) - prevents an ATM and cash held within it from being removed from the premises. aEURc Rapid Dormant Technology - specialist GPS tracking device developed primarily for the cash in transit market The UK business is based around `Raid Control', which is a national crime prevention initiative for small high risk retail outlets where funding for crime prevention equipment is provided by the local forces. IBP's Raid Control systems (Raid-safe and Raid-cam) are currently being trialled in a large multiple retail chain. IBP continue to be actively involved with the Raid Control organisation in order to seek to improve the efficiency and effectiveness of its products. IBP is currently working with a range of distributors, including Siemens, in Germany, France, Spain, Norway and Greece to actively market its products. Addressable markets Caravans With around a half a million touring caravans throughout the UK, the caravan market is a proven market that already uses GPS tracking to secure and recover assets. There are around 60 manufacturers of caravans throughout Europe, over 20 of which are based in the UK, between them producing nearly 600 different models each year. Sure-Track Europe currently has a line fit agreement with Elddis, a large caravan manufacturer, and has also entered into an agreement with an insurer that offers premium discounts and as part of its cover reimburses the finder's fee to the insured party in the event of a caravan theft. Approximately 1,600 touring caravans are stolen in the UK each year. The Caravan Registration and Identification Scheme currently holds details of over 10,000 outstanding caravan theft reports and as few as one in four of these caravans are expected to be recovered. The Directors believe that the recovery rates would be improved if a tracking device was fitted to caravans as standard. In order to target this market Sure-Track Europe will be seeking to raise its profile so that users, manufacturers, retailers and insurers are aware of its products and their capabilities. Source: www.crimereduction.homeoffice.gov.uk Plant Equipment To date, the plant equipment market has been Sure-Track Europe's biggest target market. The owners of plant equipment suffer some of the highest levels of asset thefts in the UK and an extremely low recovery rate at less than 5 per cent. In 2008 in the UK, some 3,678 pieces of equipment were stolen, with a total value of GBP36 million. The Directors believe that sales of new plant and equipment are starting to recover following the difficult economic conditions experienced in the last 24 months. In order to target this market Sure-Track Europe intends to continue to raise its profile and form strategic partnerships with existing established suppliers/manufacturers. Source: www.ter-europe.org - TER 2009 Annual Theft Report Agricultural Equipment The agricultural equipment sector is a relatively newly identified UK market for asset protection and tracking. Actual theft figures are difficult to ascertain, as most statistics tend to categorise theft from this sector as plant and equipment sector thefts. Claim figures produced by NFU Mutual, one of the UK's leading rural insurers, show that the number of farm machinery thefts across the UK rose by 15 per cent. in 2008 and the insurer estimates that in the same year machinery theft cost the industry GBP22.9 million. Insurers within this market are now starting to promote tracking and other security measures; however, they require tracking companies to have obtained the appropriate Thatcham accreditation. The MT2 is capable of achieving this accreditation and Sure-Track Europe will be seeking to obtain this during the next 12 months, while raising its profile with the insurers in the sector. Source: www.ufuni.org Light Commercial Vehicles A Home Office study in 1998 revealed that 47,181 LCVs were stolen over a 12 month period in England, Scotland and Wales, although most of these were stolen in England, equating to approximately one LCV being stolen for every 50 on the road. Having recently been awarded a part number by Ford, a large manufacturer of LCVs, means the MT2 units are now an approved dealer fit option on its range of commercial vehicles. In order that Sure-Track Europe can begin to penetrate this market its immediate priority is to train Ford's sales staff across participating Ford dealerships. Source: http://rds.homeoffice.gov.uk/rds/prgpdfs/fcdps88.pdf Passenger Vehicles There has already been significant market penetration in the luxury and premium end of the automotive market as evidenced by other companies, such as Tracker, offering tracking solutions. Again, Thatcham accreditation can be a requirement for users as insurers tend to require this in order to offer premium discounts. As stated above, the Group intends to obtain this accreditation during the next 12 months. In addition to increasing its direct marketing activities to other passenger vehicle manufacturers Sure-Track Europe will be seeking to leverage its agreement with Ford (which extends to its passenger vehicles) to raise the profile of the MT2 with insurers and end-users. Retail Retail crime cost UK retailers GBP1.1 billion in 2008-9. In the same period, incidences of robberies almost doubled and accounted for four per cent. of all retail crime, with an incident rate of nine robberies per 100 outlets exceeding levels in 2004-5 and 2006-7. Burglary increased by nearly a third and accounted for nine per cent. of the total crime cost to retailers. As shown above, retail crime is on the increase with detection rates low in comparison, which the Directors believe offers a significant opportunity for IBP to increase its sales of Raid-cam and Raid-safe products to the retail market. Betting Offices / Casinos / Bingo Clubs In the period from 2008 to 2009 there were approximately 8,800 licensed betting offices in the UK with over 80 per cent. of which being run by one of five operators. IBP currently supplies a small number of betting offices and is actively marketing its Raid-cam and Raid-safe products to others. As of 31 March 2009 there were 641 bingo clubs in the UK, 40 per cent. of which are owned by two operators and 145 casinos, 71 per cent. of which are owned by three main operators. IBP currently supplies several bingo clubs with smokenote and expects take-up rates to increase. Source: Gambling Commission Industry Statistics 08/09 Cash in Transit ("CIT") Every day, the security UK industry transports well over GBP1 billion in cash in a fleet of some 3,500 vehicles. There were 1,033, 1,059, and 1,000 robberies on vehicles or cross-the-pavement incidents in 2006, 2007 and 2008 respectively with total sums stolen of GBP20.7 million, GBP18.3 million and GBP19.4 million respectively (BSIA statistics). IBP is actively targeting the CIT market by focusing on securing deals with OEM cashbox manufacturers for its Smoke Note products. ATM Crime Europe has approximately 384,000 cash machines, with over 58,000 of these located in the UK. Physical attacks on European ATMs have fallen by 2 per cent. when compared with 2008 (down from 2,520 to 2,468 incidents), primarily due to a decrease in the number of reported ram raids and ATM burglaries. Despite this drop in incidents, overall losses rose seven per cent. to ae28 million (up from ae26 million in 2008). ATM crime in Europe jumped to ae485 million (GBP423 million) in 2008 following a 149 per cent. rise in attacks on cash machines. The Company sees huge potential in respect of crimes of this nature. Sure-Track Europe is currently trialling tracking solutions in several banks/CIT companies across UK and Europe. Competition and barriers to entry The Directors believe that there are currently no competitors of size offering a fully-monitored GSM based asset recovery tracking solution. The majority of the Company's competitors are perceived to be in the GPS tracking market; however the Directors believe that this is not an accurate comparison due to the relative strength of the Sure-Track Europe offering. The Board believes that this comparison is drawn due to the fact that the customer is not aware of the comparative benefits and strengths of the GSM technology and that GSM and GPS products can be classified as two completely separate offerings. The Directors believe that the current barriers to entry are as follows: - Pre-existing agreements Organisations have pre-existing agreements with providers of GPS technology and alternative products can only be marketed as and when these contracts come up for renewal; and - Insurance industry standard Thatcham CAT5 is a criterion that has been generally adopted by insurance providers, particularly in the agricultural and automotive industries, as the `standard' to which tracking devices should meet in order to qualify for cheaper insurance. The Sure-Track Europe unit cannot achieve the CAT5 criteria because it is not wired to a power source, which is in fact one of the major benefits of the Company's offering, as detailed above. Thatcham has, however, a `TQA' standard for which the Sure-Track Europe products qualify. Current trading and prospects The unaudited turnover, as extracted from the Company's management accounts, for the three month period ended 30 April 2010 was GBP143,859 compared to GBP 117,683 achieved in the corresponding period in 2009. The operating loss in the three month period was GBP106,636 (2009: GBP55,043). IBP Progress in the current period has been slower than anticipated. IBP has been seeking to build new client relationships in the UK to supplement its existing client base which includes a major supermarket chain, two major high street pharmacies, numerous police forces and a number of financial institutions including coverage of a nationwide branch bank network. In addition, IBP has recently appointed several overseas distributors which will be focused on generating sales in Europe. In the last 12 months IBP has also added clients in Austria, Denmark, Germany, Greece, Nigeria, Norway, Slovakia and Slovenia in the period. Sure-Track Europe A number of sales originally anticipated in the first half of the year are now expected to fall in the second half of the year as certain customers, primarily in the plant hire sector, rescheduled orders. To offset these delays the Board refocused the business to target high volume corporate clients which culminated in securing relationships with a major international consultancy business, Network Rail and a number of caravan manufacturers. The Company has also announced the agreement to supply Ford UK with the MT2 tracking device. The board are optimistic that these recently established trading relationships will lead to increased sales volumes in the second half of the year. Trend information Save as disclosed in the AIM admission document which has been posted to Shareholders today, there are no known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the Group's prospects for at least the current financial year. New Board Nigel Linacre (Non-executive Director and Chairman), aged 52, started his career in the advertising market with Charles Barker in 1979. Between 1982 and 1989 he worked at Collet Pickenson Pearce Limited and Boase Massimi Pollitt Limited. He joined Charles Barker Advertising Limited as managing director in 1989. In 1992 he was appointed marketing director of International Telephone Services Limited, becoming a director of ITS Group plc. He left in 1995 to become an international communications consultant and in 2004 become a senior executive coach with Linacre Communications Limited, trading as Inside Out Limited. In 2008 he co-formed Extraordinary Leadership Limited which trades under the name of Extraordinary Leadership. He has also been a regional newspaper columnist and an international business author. William Hirons (Managing Director), aged 47, started his career as an engineer then moved into the sales and marketing of communications equipment. Within this market he was Sales Director with Meridian Paging Limited between 1987 and 1992 and upon leaving the company he worked as a consultant until 1994, when he became Sales Director with MEL Secure Systems Limited until 2002. Boss Monitoring Limited was formed in 2002 with Mr Hirons as the Managing Director and subsequently changed its name to SureTrack on floating on the PLUS market in 2007. Michael Fairbotham (Part-time Finance Director), aged 58, qualified as a Chartered Accountant with what is now KPMG in 1975. Between 1979 and 1985 he was Group Treasurer for Foster Brothers Clothing Plc. In 1985 he joined Forward Group plc as Finance Director and Company Secretary as part of a board restructuring prior to a USM Stock Market listing. He left in 1988 to join Kemitron plc as Finance Director, a company of which he was also a shareholder. In 1999 he joined Southern Circuits Limited as Finance Director, a company of which he was also a shareholder. Since 2001 he has operated as sole practitioner and part time finance director to a number of companies. Matthew Thompson (Non-executive Director), aged 28, is a dual-qualified solicitor in the UK and Australia. He is an FSA approved person and is currently head of corporate finance at Golden Hinde Capital Limited. He is currently also a director of Copia Securities Limited. Simon Barrell (Proposed Non-executive Director), aged 51, qualified as a chartered accountant with Arthur Young in 1983. He then joined an accountancy practice in Nairobi, Kenya as a Senior Manager. On his return to the UK in 1987, he joined Binder Hamlyn. In 1994 he was appointed finance director of Napier Brown & Company Limited and Finance Director of Napier Brown Foods Plc which was admitted to trading on AIM in December 2003. In August 2005 Napier Brown Foods Plc was sold to The Real Good Food Company plc and Simon became a self employed consultant. He joined ToLuna plc in June 2005 as a Non Executive Director with specific responsibility for finance. He is now chairman of the audit committee and also member of their remuneration committee. He was a non-executive director at Zenith Hygiene Group plc from September 2007 to November 2009 and was acting chairman for the period from March 2009. He acts as an adviser to listed and non-listed companies. Brian Wise (Proposed Non-executive Director), aged 47, has operated at senior director level in a number of large public companies, making significant contributions to safety in the rail and highways sector and know as a focused and innovative director with the ability to lead in a dynamic, highly pressurised working environment. He began his career at British Rail in 1979, where he held various technical positions and prior to leaving the company in 1996 was control centre manager. He then joined Jarvis plc, where he worked in a number of posts, including control director, operations director and performance director. In 2005 he joined Atkins to act as director of control centres and was subsequently appointed business improvement director in 2007, a position he held earlier until this year. He is now managing director of Belton Consulting Limited, a company through which he provides his services as a director. Following Admission, the Company will be seeking to strengthen its board and senior management through the appointment of a financial controller/Finance Director designate. In addition, Mr Fairbotham has advised the Board that he will step down as a director on Admission to pursue his other business interests. As the business grows the Board will monitor the requirement for a full time Finance Director. In the interim, following the departure of Mr Fairbotham, Mr Barrell will have board responsibility for the finance function of the Company. Capital Reorganisation The share capital of the Company currently comprises the Existing Ordinary Shares, of which 400,281,000 are currently in issue. Accordingly, in order to ensure that upon issue of the Placing Shares, under the terms of the Placing Agreement, no New Ordinary Shares are issued at below par value it is proposed that, under the Capital Reorganisation, each of the Existing Ordinary Shares will be subdivided and redesignated into one new ordinary share of 0.05p each and one deferred share of 0.95p each. The Capital Reorganisation will result in Shareholders holding one New Ordinary Share and one Deferred Shares for each Existing Ordinary Share currently held. The rights attaching to the New Ordinary Shares will be identical in all respects to those of the Existing Ordinary Shares (including voting and dividend rights and rights on a return of capital) save that their nominal value will have been reduced to 0.05p. The Deferred Shares will have minimal rights attaching to them and will be effectively worthless. No application will be made for the Deferred Shares to be admitted to trading on AIM. The limited rights of the Deferred Shares are set out in the AIM admission document which was posted to Shareholders today. The Existing Ordinary Shares have been admitted to CREST. Application will be made for Enlarged Share Capital to be admitted to CREST, all of which may then be held and transferred by means of CREST. It is expected that the New Ordinary Shares arising as a result of the Capital Reorganisation in respect of Existing Ordinary Shares held in uncertificated form, i.e. in CREST, will be credited to the relevant CREST accounts on 3 August 2010 and that definitive share certificates in respect of the New Ordinary Shares arising as a result of the Capital Reorganisation from Existing Ordinary Shares held in certificated form will be dispatched to relevant Shareholders by 10 August 2010. No temporary documents of title will be issued. Share certificates in respect of Existing Ordinary Shares will cease to be valid on 2August 2010 and, pending delivery of share certificates in respect of New Ordinary Shares will be certified against the register. The record date of the Capital Reorganisation is 6.00p.m. on 2 August 2010. Reasons for Admission The New Board believes that Admission should: aEURc enhance the status of the Group's brand and market recognition; aEURc assist the Company in raising additional equity capital for the further development of the Group's business; aEURc allow the Company to take advantage of future acquisition opportunities by using its quoted shares as consideration; aEURc enable the Group to better recruit and retain key personnel; and aEURc provide liquidity for investors through the ability to buy and sell Ordinary Shares. Details of the Placing and use of the proceeds Under the terms of the Placing Agreement MJES has agreed, as agent for the Company, to use all reasonable endeavours to procure placees for the Placing Shares at the Placing Price to raise GBP1.42 million (gross) and approximately GBP 1.16 million (net of expenses) for the benefit of the Company. The Placing is conditional, inter alia, upon Admission and the Placing Agreement becoming unconditional and not being terminated in accordance with its terms. The Placing Shares, when issued and fully paid, will rank equally in all respects with the New Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of the AIM admission document which was posted to Shareholders today. The Placing Shares will be allotted following the Capital Reorganisation but prior to Admission credited as fully paid subject only to Admission. Such allotment will become wholly unconditional on Admission, which is expected to occur on 3 August 2010. The Company intends to use the net proceeds of the Placing primarily to allow it to build up its stock of the MT2 products in order to service recent contract wins, to support the sales and marketing programmes of the MT2 and the Company's other products and to provide working capital generally. Debt Capitalisation Conditional on Admission, loans totalling GBP150,000 will be capitalised. The loans will be satisfied through the issue by the Company of 25,000,000 New Ordinary Shares at the Placing Price, further details of which are contained in the AIM admission document. Admission and dealings Application has been made to the London Stock Exchange for the Enlarged Issued Share Capital to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Enlarged Issued Share Capital will commence on 3 August 2010. The Company's current trading facility on PLUS will be cancelled with effect from 2 August 2010. Definitions "Admission" the effective admission of the Enlarged Issued Share Capital to trading on AIM in accordance with the AIM Rules "AIM" the AIM market of the London Stock Exchange "AIM Rules" the AIM Rules for Companies issued by the London Stock Exchange as amended from time to time "Board" or "Directors" the directors of the Company "Capital Reorganisation" the proposed sub-division of every Existing Ordinary Share into one New Ordinary Share and one Deferred Share "Capital Reorganisation 6.00 p.m. on 2 August 2010 (or such later time and Record Date" date as the Board (or duly authorised committee of the Board) may determine) "Company" or "SureTrack" SureTrack Monitoring plc, a company registered in England and Wales with company number 6214926 "CREST" the computerised settlement system to facilitate the transfer of title of shares in uncertificated form, operated by Euroclear UK & Ireland Limited "Debt Capitalisation" the proposed capitalization of debt amounting to GBP 150,000 into 25,000,000 New Ordinary Shares at the Placing Price "Deferred Shares" the new deferred shares of 0.95p each arising from the Capital Reorganisation "Enlarged Issued Share the issued Ordinary Shares following Admission, Capital" being the New Ordinary Shares, the Placing Shares and the New Ordinary Shares issued as part of the Debt Capitalisation "Existing Ordinary Shares" the 400,281,000 ordinary shares of 1p each in the capital of the Company in issue as at today's date "General Meeting" or "GM" the general meeting of the Company, convened for 10.00 a.m. on 2 August 2010 and which is to be held at the offices of MJES "Group" the Company and its subsidiary undertakings from time to time "IBP" IBP Limited, a wholly owned subsidiary of the Company "London Stock Exchange" London Stock Exchange plc "MJES" Merchant John East Securities Limited "New Board" the Directors and Proposed Directors "New Ordinary Shares" the 400,281,000 new ordinary shares of 0.05p each in the capital of the Company arising from the Capital Reorganisation "Ordinary Shares" ordinary shares of 1 pence each in the capital of the Company "Placing" the conditional placing of the Placing Shares at the Placing Price pursuant to the Placing Agreement "Placing Agreement" the conditional agreement dated 9 July 2010 between the Company, the Directors, the Proposed Directors and MJES "Placing Price" 0.6p per Placing Share "Placing Shares" the 236,0666,670 Ordinary Shares to be issued by the Company pursuant to the Placing and following the Capital Reorganisation "PLUS Market" or "PLUS" the primary market operated by PLUS Markets plc for dealings in unlisted securities of issuers admitted to trading in accordance with the PLUS Rules "PLUS Rules" the PLUS Rules for Issuers, as amended or supplemented from time to time by market notice "Proposals" means (a) the Placing; (b) the Capital Reorganisation; (c) the Debt Capitalisation; and (d) Admission "Proposed Directors" Brian Wise and Simon Barrell "Resolutions" the resolutions to be proposed at the General Meeting "Sure-Track Europe" Sure-Track Europe Limited, a wholly owned subsidiary of the Company "Shareholders" the holders of Ordinary Shares "UK" the United Kingdom of Great Britain and Northern Ireland Glossary of Terms "GPRS" general packet radio service "GSM" global system for mobile communications "LCVs" light commercial vehicles "RF" radio frequency "STEPS" Sandown Enhanced Positioning System END |