RNS No 0645q
WARNER HOWARD PLC
28 May 1999
Not for release, publication or distribution in or into
the United States, Canada, Australia or Japan
Recommended Cash Offer By Paribas
on behalf of Tenberry Plc
For Warner Howard Plc
Summary
The boards of Tenberry Plc ("Tenberry") and Warner Howard
Plc ("Warner Howard") announce the terms of a recommended cash
Offer to be made by Paribas on behalf of Tenberry for the
entire share capital of Warner Howard.
The Offer will be 220p in cash for each Warner Howard Share.
The Offer values the entire issued share capital of Warner
Howard at approximately #53.2 million. The Independent Directors of Warner
Howard, who have been so advised by PricewaterhouseCoopers, consider that the
terms of the Offer are in the best interests of Shareholders and, accordingly,
will unanimously recommend Warner Howard Shareholders to accept the Offer.
Tenberry has received irrevocable undertakings to accept the Offer in respect
of the beneficial holdings of Mr Phillips and his family trusts and from the
Independent Directors and the Management of Warner Howard totalling in
aggregate, 11,494,305 Warner Howard Shares, representing approximately 47.5
per cent. of Warner Howard's issued ordinary share capital. The irrevocable
undertakings remain binding in the event of a higher competing offer being
made.
The Offer price of 220p represents a premium of approximately 20 per cent.
over the closing middle market price of 184p per Warner Howard Share on
Tuesday 30th March 1999, the last business day prior to the announcement
of the approach by Mr Phillips that might lead to an offer.
Warner Howard also today announces its preliminary results
for the year to 28th February 1999. Group turnover was
#26.9 million (1998: #27.4 million) with operating profit
(before exceptional items) of #6.7 million (1998: #7.5
million). A copy of the preliminary results is contained in an
appendix to this announcement.
Enquiries:
Paribas (for Tenberry) 0171 595 2000
Stephen Altman
Nigel Berger
PricewaterhouseCoopers (for Warner Howard) 0171 939 3000
Peter Clokey
Darren Bryant
This summary should be read in conjunction with the
full text of this announcement.
Paribas, which is regulated in the United Kingdom by
The Securities and Futures Authority Limited, is acting
exclusively for Tenberry in connection with the Offer
and no-one else and will not be responsible to anyone
other than Tenberry for providing the protections afforded
to customers of Paribas, or for giving advice in relation
to the Offer.
PricewaterhouseCoopers, which is authorised by the
Institute of Chartered Accountants in England and
Wales to carry on investment business, is acting exclusively
for Warner Howard in connection with the Offer and no-one
else and will not be responsible to anyone other than
Warner Howard for providing the protections afforded to
customers of PricewaterhouseCoopers, or for giving advice
in relation to the Offer.
This announcement does not constitute an offer or
invitation to purchase any securities.
The Offer will not be made, directly or indirectly, in or
into, or by use of the mails or any means of
instrumentality (including without limitation facsimile
transmission, telex and telephone) of interstate or foreign
commerce of, or any facilities of a national securities
exchange of, the United States, nor will it be made in
or into Canada, Australia or Japan. Accordingly, copies
of this announcement are not being, and must not be,
mailed or otherwise distributed or sent in or into or from
the United States, Canada, Australia or Japan and
persons receiving this announcement (including
custodians, nominees and trustees) must not distribute or
send it in, into or from the United States, Canada,
Australia or Japan.
Recommended Cash Offer
By
Paribas
on behalf of
Tenberry Plc
For
Warner Howard Plc
1.Introduction
The boards of Tenberry Plc ("Tenberry") and Warner
Howard Plc ("Warner Howard") announce that agreement
has been reached on the terms of a recommended cash
Offer, to be made by Paribas on behalf of Tenberry, to
acquire all of the share capital of Warner Howard. The
Offer values the whole of the issued ordinary share capital of
Warner Howard at approximately #53.2 million.
Tenberry is a newly incorporated company owned entirely by Robin Phillips, a
Non-Executive Director of Warner Howard, and his family trusts. Management
(comprising the executive directors of Warner Howard) will enter into bonus
arrangements with Tenberry, as disclosed in the Offer Document, if the Offer
becomes unconditional.
The Independent Directors, who have been so advised by
PricewaterhouseCoopers, consider that the terms of the Offer
are in the best interests of Shareholders and, accordingly, will
unanimously recommend that Shareholders accept the Offer. In providing advice
to the Independent Directors of Warner Howard, PricewaterhouseCoopers has
taken into account the commercial assessments of the Independent Directors of
the Warner Howard business.
Tenberry has received irrevocable undertakings to accept the
Offer in respect of the beneficial holdings of Mr Phillips
and his family trusts and from the Independent Directors
and the Management totalling 11,494,305 Shares
representing approximately 47.5 per cent. of Warner
Howard's issued share capital. The undertakings remain binding in the event
that a higher competing offer for Warner Howard is made.
2. The Offer
The Offer, which will be made on the terms and subject to
the conditions set out in Appendix I will be on the following basis:
for each Share 220p in cash
The Shares will be acquired under the Offer fully paid
and free from all liens, charges, equitable interests,
encumbrances, rights of pre-emption and other third party
rights or interests of any nature whatsoever and together
with all rights now or hereafter attaching to them,
including the right to receive and retain all dividends
and other distributions declared, made or paid on or
after 28 May 1999.
3. The Loan Note Alternative
A Shareholder who validly accepts the Offer may, while the
Offer remains open for acceptance, elect to receive Loan
Notes instead of all or part of the cash consideration to
which he would otherwise be entitled under the terms of
the Offer, on the following basis:
for each Share 220p nominal of Loan Notes
BDO Stoy Hayward has advised that, based on current market
conditions, its estimate of the value of the Loan Notes, if
they were in issue on 27 May 1999 (the latest practicable
date prior to this announcement) would have been 53 pence per #1 in nominal
value of the Loan Notes.
Shareholders should note that the Independent Directors
recommend Shareholders NOT to elect for the Loan Note
Alternative.
4. De-listing
Tenberry intends, following the Offer becoming or being
declared unconditional in all respects and subject to the
consent of the London Stock Exchange, to apply for the
cancellation of Warner Howard's listing on the London
Stock Exchange and to re-register Warner Howard as a
private company. De-listing will significantly reduce the
liquidity and marketability of any Shares not assented to
the Offer.
5. Background to and reasons for the Offer
The ability to grow Warner Howard organically is very limited and in addition
(with the exception of Industrial Washing Machines Limited) no suitable
targets have been identified in the last few years.
As a result Tenberry was formed by Mr Phillips with a view to taking Warner
Howard into private ownership.
Tenberry provides Shareholders with the opportunity to accept a cash offer
that the Independent Directors consider to be in the best interests of
Shareholders and which they are unanimously recommending Shareholders to
accept.
Tenberry intends to continue the businesses of Warner Howard in broadly their
current form. There are presently no intentions regarding either any major
changes to the business of Warner Howard nor the disposal of Warner Howard or
a material part of Warner Howard's business over the next 12 months.
The reasons for accepting the Offer will be set out in the letter from the
Independent Directors in the Offer Document.
6. Information on Tenberry
Tenberry is a recently incorporated UK public limited
company which was formed for the purpose of making the
Offer and which has not traded.
7. Information on Warner Howard
Warner Howard is a distributor and servicer of high
quality capital goods through three principal
divisions, namely hygiene, laundry and waste
management.
In the year ended 28 February 1999, turnover was #26.9
million and profit on ordinary activities after taxation
was #4.9 million. Consolidated net assets as at 28 February
1999 were #28.7 million.
8. Management and Employees
The Tenberry Board has confirmed that the existing
employment rights, including pensions rights, of the
management and employees of Warner Howard will be fully
safeguarded.
9. Share Option Schemes
The Offer extends to any Shares issued as a result of the
exercise of options under the Share Option Schemes prior to
the date on which the Offer closes. If the Offer becomes
or is declared unconditional in all respects, Tenberry will make
appropriate proposals to Option Holders.
10. General
The formal Offer Document will be posted to Warner Howard
Shareholders today. The availability of the Offer to
persons not resident in the United Kingdom may be
affected by the laws of the relevant jurisdictions. Persons
who are not resident in the United Kingdom should inform
themselves about and observe any applicable requirements.
Appendix I sets out the conditions and certain further
terms of the Offer. Appendix II contains definitions
of certain expressions used in this announcement.
Appendix III contains the preliminary results of Warner
Howard for the financial year ended 28 February 1999.
Enquiries:
Paribas (for Tenberry) 0171 595 2000
Stephen Altman
Nigel Berger
PricewaterhouseCoopers (for Warner Howard) 0171 939 3000
Peter Clokey
Darren Bryant
Paribas, which is regulated in the United Kingdom by
The Securities and Futures Authority Limited, is acting
exclusively for Tenberry in connection with the Offer
and no-one else and will not be responsible to anyone
other than Tenberry for providing the protections afforded
to customers of Paribas, or for giving advice in relation
to the Offer.
PricewaterhouseCoopers, which is authorised by the
Institute of Chartered Accountants in England and
Wales to carry on investment business, is acting exclusively
for Warner Howard in connection with the Offer and no-one
else and will not be responsible to anyone other than
Warner Howard for providing the protections afforded to
customers of PricewaterhouseCoopers, or for giving advice
in relation to the Offer.
This announcement does not constitute an offer or
invitation to purchase any securities.
The Offer will not be made, directly or indirectly, in or
into, or by use of the mails or any means of
instrumentality (including without limitation facsimile
transmission, telex and telephone) of interstate or foreign
commerce of, or any facilities of a national securities
exchange of, the United States, nor will it be made in
or into Canada, Australia or Japan. Accordingly, copies
of this announcement are not being, and must not be,
mailed or otherwise distributed or sent in or into or from
the United States, Canada, Australia or Japan and
persons receiving this announcement (including
custodians, nominees and trustees) must not distribute or
send it in, into or from the United States, Canada,
Australia or Japan.
Appendix I
Conditions and further terms of the Offer
The Offer which will be made by Paribas on behalf of
Tenberry, will comply with all applicable Rules and
Regulations of London Stock Exchange Limited (the "London
Stock Exchange") and the City Code on Takeovers and Mergers
(the "Code") and will be governed by English law and be
subject to the jurisdiction of the Courts of England.
Conditions of the Offer
The Offer is subject to the following conditions:
(a) valid acceptances of the Offer being received (and
not, where permitted, withdrawn) by 3.00 p.m. on l8 June 1999
(or such later time(s) and/or date(s) as Tenberry may, subject to the
rules of the Code, decide) in respect of not less than 90
per cent. in nominal value of Shares to which the Offer
relates (or such lower percentage as Tenberry may decide)
provided that this condition will not be satisfied
unless Tenberry shall have acquired or agreed to
acquire, whether pursuant to the Offer or otherwise, Shares
carrying more than 50 per cent. of the voting rights then
exercisable at a general meeting of Warner Howard
including, for this purpose, to the extent (if any) required
by the Panel, any voting rights attaching to any Shares
which are unconditionally allotted or issued before the
Offer becomes or is declared unconditional as to acceptances
pursuant to the exercise of any outstanding
conversion or subscription rights or otherwise. For the
purposes of this condition:
(i) Shares which have been unconditionally allotted shall
be deemed to carry the voting rights which they will carry upon issue; and
(ii) the expression "Shares to which the Offer relates"
shall be construed in accordance with Sections 428 to 430F
of the Companies Act 1985;
(b)no government or governmental, quasi-governmental, supranational,
statutory, regulatory or investigative body, court, trade agency, professional
association or institution or any other similar person or body whatsoever in
any relevant jurisdiction (each a "Third Party") having decided to
take, institute, implement or threaten any action,
proceeding suit, investigation, enquiry or reference or
having made, proposed or enacted any statute,
regulation, order or decision or having done anything which
would or might:
(i) make the Offer or its implementation,
or the acquisition or the proposed acquisition by Tenberry
of any shares in, or control of, Warner Howard, void,
illegal or unenforceable in any jurisdiction, or
otherwise directly or indirectly restrain, prohibit,
restrict or delay the same or impose additional conditions
or financial or other obligations with respect
thereto, or otherwise challenge or interfere therewith;
(ii) require, prevent or materially delay the divestiture
by Tenberry of any Shares or of any shares in a member of
the Wider Warner Howard Group;
(iii) require, prevent or delay the divestiture by Tenberry
or by any member of the Wider Warner Howard Group of all
or any portion of their respective businesses, assets or
property, or (to an extent which is material in the
context of the Offer or the Wider Warner Howard Group
concerned taken as a whole) impose any limit on the
ability of any of them to conduct their respective
businesses (or any of them) or own their respective
assets or properties or any part thereof;
(iv) impose any material limitation on the ability of
Tenberry to acquire, directly or indirectly, or to hold or to exercise
effectively all or any rights of ownership of Shares or
securities convertible into Shares or to exercise
management control over any member of the Wider Warner
Howard Group or on the ability of Warner Howard or any
member of the Wider Warner Howard Group to hold or exercise
effectively all or any rights of ownership of shares or
securities convertible into shares in any member of the
Wider Warner Howard Group or to exercise management
control over any such member of the Wider Warner Howard
Group;
(v) require Tenberry and/or any member of the Wider
Warner Howard Group to offer to acquire or repay any shares in and/or
indebtedness of any member of the Wider Warner Howard Group owned by any
third party;
(vi) impose any limitation on Tenberry or on any member of
the Wider Warner Howard Group to integrate its business, or any part of it,
with the business of any member of the Wider Warner Howard
Group or Tenberry respectively; or
(vii) otherwise adversely affect any or all of the business, assets, prospects
or profits of any member of the Wider Warner Howard Group or of
Tenberry to an extent which is material in the context of
the Offer or any such group taken as a whole; and all
applicable waiting periods during which any Third Party
could institute, implement or threaten any such action,
preceding, suit, investigation, enquiry or reference
under the laws of any relevant jurisdiction, having
expired, lapsed or been terminated;
(c) all necessary filings having been made and all
necessary waiting periods under any applicable legislation
or regulations of any jurisdiction having expired, lapsed
or been terminated and all statutory or regulatory
obligations in any relevant jurisdiction having been
complied with in connection with the Offer and its
implementation or the proposed acquisition by Tenberry of
any shares in, or control of, Warner Howard and all
authorisations, orders, recognitions, grants, consents,
clearances, confirmations, licences, certificates,
permissions and approvals deemed necessary or appropriate
by Tenberry in respect of the Offer or the proposed
acquisition by Tenberry of any shares in, or control of,
Warner Howard or in relation to the affairs of any member
of the Wider Warner Howard Group having been obtained in
terms and in a form satisfactory to Tenberry from all
appropriate Third Parties and all such authorisations,
orders, recognitions, grants, consents, clearances,
confirmations, licences, certificates, permissions and
approvals remaining in full force and effect and there
being no intimation of any intention to revoke or not renew
the same;
(d) except as publicly announced by Warner Howard prior
to 28 May 1999 through the London Stock Exchange, there being no
provision of any arrangement, agreement, licence or
other instrument to which any member of the Wider Warner
Howard Group is a party or by or to which any such member or
any of its respective assets may be bound or be subject and
which, in consequence of the making or implementation of
the Offer or the proposed acquisition of any shares in, or control of, Warner
Howard by Tenberry or because of a change in the control or management of
Warner Howard or otherwise, would or might result in to an
extent which is material in the context of the Wider Warner
Howard Group:
(i) any indebtedness of any member of the Wider Warner
Howard Group being or becoming repayable or capable of being
declared repayable immediately or prior to its stated
maturity or the ability of any such member to incur
any indebtedness being withdrawn or inhibited;
(ii) the creation of any mortgage, charge or other security
interest over the whole or any part of the business,
property or assets of any such member or any such security
(whenever arising or having arisen) becoming enforceable;
(iii) any such arrangement, agreement, licence or
instrument or the rights, liabilities, obligations, or
interests of any member of the Wider Warner Howard Group
under any such arrangement, agreement, licence or instrument
(or any arrangement relating to any such right, liability,
obligation, interest or business) being terminated or
materially modified or adversely affected or any action
being taken or any onerous obligation arising thereunder;
(iv) any asset or interest of any member of the Wider
Warner Howard Group being or falling to be disposed of or charged
(otherwise than in the ordinary course of trading) or any right arising
under which any such asset or interest could be required to
be disposed of or charged;
(v) any member of the Wider Warner Howard Group ceasing
to be able to carry on business under any name under which it presently does
so;
(vi) Tenberry and/or any member of the Wider Warner
Howard Group being required to acquire or repay any shares in and/or
indebtedness of any member of the Wider Warner Howard Group
owned by any third party;
(vii) any change in or effect on the ownership or use of
any intellectual property rights owned or used by any
member of the Wider Warner Howard Group; or
(viii) the value or financial or trading position or
prospect of any member of the Wider Warner Howard Group
being prejudiced or adversely affected;
(e) save as disclosed in writing to Tenberry prior to 28
May 1999 and/or except as publicly announced by Warner Howard prior to 28
May 1999 through the London Stock Exchange, no member of the
Wider Warner Howard Group having since 28 February 1999:
(i) issued or agreed to issue or authorised or
proposed the issue of additional shares of any class, or securities
convertible into, or rights, warrants or options to subscribe for
or acquire, any such shares or convertible securities
(save for issues to Warner Howard or wholly-owned
subsidiaries of Warner Howard and save for options granted
under the Share Option Schemes before 28 May 1999 or the
issue of any Shares allotted upon the exercise of options
granted before 28 May 1999 under the Share Option Schemes) or
redeemed, purchased or reduced any part of its share
capital;
(ii) declared, made or paid or proposed to declare, make
or pay any bonus, dividend or other distribution whether payable in cash or
otherwise other than any distribution by any wholly-owned
subsidiary within the Warner Howard Group;
(iii) authorised or proposed or announced its intention to
propose any change in its share or loan capital;
(iv) authorised or proposed or announced its intention to
propose any merger, demerger or any acquisition or disposal
or transfer of assets or shares (other than in the ordinary
course of trading);
(v) disposed of or transferred (other than in the
ordinary course of trading) or mortgaged, charged or encumbered any asset or
any right, title or interest in any asset or shares or
trade investments (other than in the normal course of
trading) or entered into any agreement, arrangement,
contract, transaction or commitment (other than in the
ordinary course of trading and whether in respect of
capital expenditure or otherwise);
(vi) issued or proposed the issue of any debentures, or
(other than in the ordinary course of trading) incurred or increased
any indebtedness or contingent liability;
(vii) made, or announced any proposal to make, any change
or addition to any retirement, death or disability
benefit of or in respect of any of its directors,
employees, former directors or former employees;
(viii) entered into or varied the terms of any service
agreement with any director of the Wider Warner Howard
Group;
(ix) taken any corporate action or had any legal
proceedings started or threatened against it (which has or
have not, as the case may be, subsequently been irrevocably
and unconditionally withdraw) for its winding up,
dissolution or reorganisation or for the appointment of
a receiver, administrative receiver, trustee or similar
officer of all or any of its assets or revenues;
(x)entered into any reconstruction or amalgamation
otherwise than in the ordinary course of trading which is material in the
context of the Wider Warner Howard Group taken as whole;
(xi) waived or compromised any claim, save in the ordinary
course of trading; or
(xii) entered into an aggregate or arrangement or
commitment or passed any resolution with respect to any of
the transactions, matters or events referred to in this
paragraph (e);
(f) save as publicly announced by Warner Howard prior to
28 May 1999 through the London Stock Exchange and save as disclosed
in the preliminary announcement of Warner Howard for the year
ended 28 February 1999 as set out in Appendix V:
(i) there having been no material adverse change or
deterioration in the business, financial or trading position or profits of
the Wider Warner Howard Group taken as a whole;
(ii) no material litigation, arbitration proceedings,
prosecution or other legal proceedings to which any member of the Wider
Warner Howard Group is or may become a party (whether as
plaintiff or defendant or otherwise), and no material
investigation by any Third Party, against or in respect of
any member of the Wider Warner Howard Group, having
been threatened, announced or instituted or remaining
outstanding by, against or in respect of any member of the
Wider Warner Howard Group; and
(iii) no contingent or other liability having arisen or
become apparent which might be likely in either case to
have a material adverse effect on the Wider Warner Howard
Group taken as a whole;
(g) Tenberry not having discovered (i) that any
financial or business information concerning Warner Howard or the Wider
Warner Howard Group which is contained in the information publicly
disclosed at any time by any member of the Wider Warner
Howard Group either contains a material misrepresentation
of fact which has not, prior to the date of this document
been corrected by public announcement or omits to state a
fact necessary to make the information contained therein
not materially misleading, (ii) any information which
materially affects the import of any such information or
(iii) that any member of the Wider Warner Howard Group
which is not a subsidiary undertaking of Warner Howard is
subject to any liability, contingent or otherwise, which is
not disclosed in the preliminary results of Warner
Howard for the year ended 28 February 1999.
Tenberry reserves the right to waive all or any of
conditions (b) to (g) inclusive, in whole or in part,
subject to the provisions of the Code.
The Offer will lapse if the proposed acquisition by
Tenberry of Warner Howard is referred to the Monopolies
and Mergers Commission by 18 June 1999 or the date when the
Offer is declared unconditional as to acceptances, whichever
is the later.
The Offer will lapse unless conditions (b) to (g)
inclusive have been fulfilled or satisfied or (if
capable of waiver) waived by midnight on the later of
9 July 1999 and 21 days after the date on which condition
(a) is fulfilled (or in each such case such later date
as the Panel may agree) Provided that Tenberry shall
be under no obligation to waive or treat as fulfilled
any of conditions (b) to (g) inclusive by a
date earlier than the latest date specified above for
the fulfilment thereof notwithstanding that the other
conditions of the Offer may at such earlier date have been
fulfilled and that there are at such earlier date no
circumstances indicating that any of such conditions may
not be capable of fulfilment.
Tenberry reserves the right to make such changes to the
above conditions as may be appropriate in the event that
the conditions of the Offer are required to be amended to
comply with Rule 9 of the City Code on Takeovers and Mergers.
For the purposes of these conditions: the "Wider Warner
Howard Group" means Warner Howard and its subsidiary
undertaking, associated undertakings and any other
undertakings in which Warner Howard and such undertakings
(aggregating their interests) have a significant
interest; and, for these purposes, "subsidiary
undertaking", "associated undertaking" and "undertaking"
have the meanings given to those terms by the Act (but
for this purpose ignoring paragraph 20(1)(b) of Schedule
4A to the Act) and "significant interest" means a direct or
indirect interest in 10 per cent. or more of the equity
capital of an undertaking.
Appendix II
Definitions
In this announcement, unless the context otherwise requires, the following
expressions have the following meanings:
"the Act" the Companies Act 1985 (as amended)
"Company" Warner Howard plc
"Enlarged Group" the Tenberry Group as enlarged
by the acquisition of the Warner Howard Group
"Facilities Agreement" the facilities agreement made
on or around the date of the Offer between (1)
Tenberry and (2) Paribas Acquisition Finance
"Form of Acceptance" the form of acceptance,
authority and (where appropriate) election relating to
the Offer which accompanies this document
"Group" Warner Howard plc and its subsidiary undertakings
"IRG plc" or "Registrars" IRG plc, registrars and receiving agents
"Independent Directors" Mr R.G. Hooker and Mr J.A. Spooner
"Intercreditor Agreement" has the meaning given to it
in the Facility Agreement
"LIBOR" the London Inter Bank Offered Rate
"Listing Rules" the rules and regulations of the London Stock
Exchange made under the Financial Services Act 1986
"Loan Notes" the loan notes being offered under the Loan Note
Alternative, the principal terms of which will be set out in
the Offer Document
"Loan Note Alternative" the entitlement of Shareholders to elect to
receive Loan Notes in lieu of some or all of the cash to
which they would otherwise be entitled under the Offer
"Management" Mr Hazell, Mr Adams and Mr Jacobs each currently
executive directors of Warner Howard
"Member Account" the identification code or number attached to any
member account in CREST
"Noteholders" holders of the Loan Notes
"Offer" the recommended cash offer by Paribas on behalf of
Tenberry to acquire the Shares on the terms and subject to the
terms and conditions set out in the Offer Document and the Form
of Acceptance including, where the context so
requires, any subsequent revision, variation, extension
or renewal of such offer
"Offer Document" the document to be addressed to Shareholders containing the
Offer
"Option Holders" holders of options under the Share Option Schemes
"Panel" the Panel on Takeovers and Mergers
"Paribas" Paribas, the London branch of Paribas S.A.,
financial adviser to Tenberry
"Paribas Acquisition Finance" acquisition finance department of Paribas S.A.
"SEDOL" the London Stock Exchange Daily Official List
"Shareholder" holders of Shares
"Share Option Schemes" the Savings-Related Share Option
Scheme, the 1998 Approved Executive Share Option
Scheme, the 1998 Unapproved Executive Share Option Scheme
and the 1998 Unapproved Senior Executive Share Option
Scheme
"Shares" the existing issued or unconditionally allotted
and fully paid ordinary shares of 5p each in Warner Howard
and any further such shares which are unconditionally
allotted or issued during the period ending on the date and
time upon which the Offer ceases to be open for acceptance
(or such earlier date and time as Tenberry may, subject to the
Code, decide)
"Statutes" the Act and the Regulations
"Tenberry" Tenberry Plc
"Tenberry Board" or "Tenberry Directors" the board of
directors of Tenberry
"Tenberry Shareholders" holders of Tenberry Shares
"UK" or "United Kingdom" the United Kingdom of Great
Britain and Northern Ireland
"Unconditional Date" the date on which the Offer
becomes or is declared wholly unconditional
"United States" or "USA" the United States of America
(including the District of Columbia), its territories
and possessions, any state of the United States of
America and all other areas subject to its jurisdiction
"Warner Howard" Warner Howard plc
"Warner Howard Board" or "Board"the board of directors of
Warner Howard
"Warner Howard Group" or "Group"Warner Howard
and its existing subsidiary undertakings
APPENDIX III
PRELIMINARY RESULTS FOR WARNER HOWARD FOR THE FINANCIAL YEAR ENDED
28 FEBRUARY 1999
Chairman's statement
Profit before tax for the year to 28 February 1999 was #7.18 million compared
with profit before tax of #7.13 million in the year to 28 February 1998.
Last year's result was after exceptional costs of #0.68 million resulting
from the decision to wind down the catering activity. Turnover for the year
to 28 February 1999 was #26.94 million compared with #27.35 million in the
previous year. EPS was little changed from last year at 20.34p.
It is being announced today that agreement has been reached on the terms of a
recommended cash offer to be made by Tenberry for the entire share capital of
the Company. Tenberry is a newly incorporated company owned entirely by
Robin Phillips who is a director of Warner Howard and his family trusts. In
view of this Offer, the Board is not recommending the payment of a final
dividend.
The Group's operating result before exceptional items for the year was
disappointing, down 11 per cent at #6.67 million in the year to 28 February
1999 compared with #7.47 million in the year to 28 February 1998. The main
causes were a decline in rental income and margins in the laundry division
and a reduced contribution from catering.
The market for the rental of commercial laundry equipment remained
competitive throughout the year and our position was aggravated by the
failure to renew a major contract in the spring of 1998. Laundry sales,
however, have improved due to increased demand by customers for both outright
purchase and lease purchase of equipment, albeit at lower margins. Towards
the end of the year we launched marketing initiatives which should increase
both rental and sales volumes.
I am pleased to report that following a number of flat years, the hygiene
division has returned to growth. Turnover in the year to February 1999 was 6
per cent higher than last year with increases in both sales and rental
income. The long-standing, flagship product of the hygiene division is the
"World" warm air hand dryer, renowned for its quality and durability. We
recently launched a complementary, lower price dryer from "World" which we
believe will create opportunities in segments of the market that have not
been available to us in the past.
We acquired Orwak Linley, our waste handling equipment subsidiary, in 1995
and in the first three years of ownership its profitability more than
doubled. In the year to February 1999, Orwak Linley's sales were constrained
by a slow-down in store openings by the major food retailers and its
operating profit remained at the previous year's level of #1.54 million.
During the year a number of new products were introduced under the well-
respected Orwak brand as part of a continuing process to broaden the product
range. The division is also trying to widen the appeal of its products
through increased awareness of the potential savings from improved waste
control.
Last year I reported that we were placing great emphasis on staff development
and training throughout the organisation. As a consequence, there have been
significant improvements in the manner and efficiency in which we deal with
our customers, in terms of both technical service and overall customer care.
This in turn should lead to higher levels of customer satisfaction which will
be for Warner Howard's longer term benefit.
The Group's cash reserves increased by #2.63 million during the year to 28
February 1999. We have been conscious of the need to utilise this cash
efficiently and have investigated a number of potential acquisitions.
However, with the exception of Industrial Washing Machines (IWM), we have not
been able to find suitable opportunities.
We acquired 80 per cent of the share capital of IWM on 19 May 1999 for #1.70
million paid entirely in cash. IWM's audited profit before tax for the year
ended 28 February 1999 was #0.44 million and its net assets at 28 February
1999 were #0.24 million. IWM manufactures, supplies and installs industrial
machines for washing re-usable packaging materials such as trays, crates,
bins, pallets and drums for a wide range of customers including bakeries,
pharmaceuticals, automotive manufacturers and food processors. IWM operates
in a niche market and complements our existing businesses. The acquisition
of IWM will provide the group with opportunities for future growth.
The Group's strategies are designed to increase market share in each of the
core divisions and enhance operating efficiencies throughout the business.
We already have a significant share of the key markets in which we operate
and therefore the potential for organic growth is limited. Furthermore, any
growth achieved will, in the short to medium term, be tempered by a further
decline in rental income resulting from expiring catering contracts and
recent reductions in the size of the laundry rental fleet.
On behalf of the Board, I wish to extend thanks to all members of staff for
their continued hard work and support.
Ronald G. Hooker CBE.F.Eng
Chairman
28 May 1999
Unaudited Consolidated Profit And Loss Account
Year to Year to
28 Feb 28 Feb
1999 1998
Notes #'000 #'000
Turnover 1 26,943 27,350
Operating profit from 6,665 7,468
continuing activities
Provision for costs of
discontinuing the catering - (675)
activity
Operating profit before 6,665 6,793
interest
Net interest receivable 514 334
Profit on ordinary 7,179 7,127
activities before taxation
Taxation (2,259) (2,179)
Profit on ordinary 4,920 4,948
activities after taxation
Dividends 2 (931) (2,903)
Retained profit for the year 3,989 2,045
Earnings per share - basic 3 20.34p 20.46p
Earnings per share - diluted 3 20.34p 20.46p
Dividend per share 3.85p 12.00p
All recognised gains and losses are included in the consolidated profit and
loss account.
Unaudited Consolidated Balance Sheet
As at As at
28 Feb 28 Feb
1999 1998
#'000 #'000
Fixed assets
Tangible assets 17,829 17,880
Current assets
Stocks 4,002 3,988
Debtors 4,382 5,178
Cash at bank and in hand 7,931 5,305
16,315 14,471
Creditors due within one year (5,424) (7,620)
Net current assets 10,891 6,851
Total assets less current 28,720 24,731
liabilities
Provision for liabilities and (66) (66)
charges
28,654 24,665
Capital and reserves
Called up share capital 1,210 1,210
Share premium account 2,379 2,379
Capital redemption reserve 914 914
Profit and loss account 24,151 20,162
Shareholders' funds 28,654 24,665
Unaudited Cash Flow Statement
Year to Year to
28 Feb 28 Feb
1999 1998
#'000 #'000
Net cash inflow from operations 10,469 10,918
Net interest received 562 331
Corporation tax paid (2,307) (2,545)
Investing activities
Purchase of fixed assets (3,884) (4,145)
Sale of fixed assets 688 556
Net capital expenditure (3,196) (3,589)
Dividends paid (2,902) (2,624)
Net cash inflow before
management of liquid resources 2,626 2,491
and financing
Increase/(decrease) in liquid
resources 4,750 (2,076)
Financing - 30
Increase in cash 7,376 445
(Decrease)/increase in liquid (4,750) 2,076
resources 7,376 445
Increase in cash
2,626 2,521
Increase in net cash
Notes:
1 Turnover by division is analysed as follows:-
Year to Year to
28 Feb 28 Feb
1999 1998
#'000 #'000
Laundry 8,365 8,502
Hygiene 7,270 6,845
Waste handling equipment 7,178 7,032
Derek Wright 923 947
Catering 1,055 1,513
Service & supplies 2,152 2,511
26,943 27,350
2 The board is not proposing a final dividend. The Company paid an interim
dividend of 3.85p net per share.
3 The basic and diluted earnings per share of 20.34p are calculated on the
profit after taxation using the weighted average number of shares in
issue during the period of 24,190,757 ordinary shares (1998 -
24,187,488).
4 The figures are extracted from the full accounts which are subject to
completion of audit. The 1998 comparative figures are abridged from the
full published accounts which carried an unqualified auditors' report and
which have been filed with the Registrar of Companies.
5 Copies of this announcement are available from the Company's registered
office at 170/172 Honeypot Lane, Stanmore, Middlesex HA7 1EE.
END
OFFALLVDEFITFAA
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