Pebble Beach Systems Group plc (the "Company" or the "Group")
Strategic Review and Trading Update
Pebble Beach Systems Group plc, a leading global software business specialising in solutions for playout automation, and content serving customers in the broadcast markets, announces an update on the progress of the Company's Strategic Review and current trading.
Trading Update
Following on from the sale of the Group's hardware business, Vislink Communications Systems, in February 2017 the refocused Group has received orders in the year to date of £8.3m versus £6.9m in the comparable period in 2016. The Group expects order intake for the full year to be below last year due to an exceptionally large order being received late in 2016, which hasn't been repeated in 2017.
The Group is expected to report FY17 continuing operations revenues slightly below FY16. The profile of orders received has changed from fewer large projects in FY16 to a higher number of smaller projects this year.
However, orders of a material size have been received from Russia which represents a new territory for the business and is a promising development for the Group.
In June 2017 global playout and media services company DMC, a TVT company, launched the first fully-IP virtualised playout platform in Europe. This platform is based on the Company's Orca product and the successful deployment strengthens its position at the forefront of IP based broadcast automation. This is important for future growth as the broadcast market looks to exploit the potential flexibility of IP based infrastructures.
Update on Strategic Review and Formal Sale Process ("FSP")
On 23 February 2017, the Company announced that following the disposal of VCS, a strategic review and FSP had been initiated to consider options available to reduce the Company's outstanding debt and maximise value for shareholders, including the possibility of a sale of the Group.
During the course of the FSP the Company engaged with a number of interested parties. These discussions did not result in an offer which was considered by the board to reflect the value of the Group's operations and as the Company is not currently in dialogue with any third party regarding an offer for the Company's shares, the Board has decided to terminate the FSP.
The Company has commenced discussions with its bankers in order to secure the support the Company needs to remain independent.The Board is confident that it will reach an agreement with its bank which will allow the business to continue as an independent entity.
As a consequence of exiting the formal sale process, the Company is no longer in an offer period for the purposes of the City Code on Takeovers and Mergers (the "Code") and potential offerors for the Company will no longer be granted any dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Code and would be subject to the 28 day deadline referred to in Rule 2.6(a) of the Code.
The Company will make a further announcement in due course.
xG Technology
As part of the revised business purchase agreement for the sale of VCS, it was agreed that the Group would retain the right to any sums received in the future in respect of an outstanding specific debtor, subject to a maximum sum of $2.0 million. The Group was reliant on xG Technology fulfilling this contract to enable the Group to recover this debt.
In April 2017 the company received $0.25 million in cash from xG Technology against this debt.
xG Technology has advised on completion of the contract and delivery of the goods. The Board are currently in discussion with xG Technology, who are looking to offset significant additional costs of completion and other VCS costs that xG Technology consider should not be borne by it under the original agreement. There is no likelihood of agreement between xG Technology and the Group.
Board / senior management changes
As it is the board's intention to operate as an independent entity, subject to the bank's support, it will look to appoint a new executive team to the PLC board. It is expected that the executive director roles will be sourced from internal candidates.
The Board had previously announced that it was the intention of Oliver Ellingham to step down. However, he agreed to stay on until such time as the processes associated with the sale of VCS to xG Technology Inc. ("xG Technology") were completed and he will now step down at the end of the year
The Company will make a further announcement in due course in respect of changes to the board once appointments are finalised.
At senior management level, the Board has received notice of Ian Cockett's resignation. Ian is the Group's Chief Technology Officer and a founder of Pebble Beach Systems Ltd, the Group's continuing business acquired in 2014. Ian will remain with the business during his notice period of 6 months and will be retained as an adviser to the Company following his departure. The Board would like to thank Ian for his contribution to the Company since its acquisition of Pebble Beach Systems Ltd in 2014.
For further information please contact:
John Varney Non-Executive Chairman Pebble Beach Systems Group plc |
+44 (0) 75 55 59 36 02 |
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Shaun Dobson / James White N+1 Singer |
+44 (0) 20 74 96 30 00 |
The Company is listed on the LSE AIM market (PEB.L). More information can be found at www.pebbleplc.com.
About Pebble Beach Systems Limited
Pebble Beach Systems Limited (Pebble) is a leading developer and supplier of automation, channel in a box, integrated and virtualised playout technology for TV broadcasters, service providers, and cable and satellite operators. Founded in 2000 and headquartered in Weybridge, Surrey, Pebble has developed a portfolio of successful products which have the flexibility to support a wide range of broadcast applications with scalable products designed for highly efficient multichannel transmission as well as complex news and sports television. Installed in more than 70 countries and with proven systems ranging from single up to over 150 channels in operation, Pebble's international client base includes TV Globo Brazil, Fox News and Business channels USA, ZDF Germany, Orbit Showtime Network UAE, TV4 Sweden, TV2 Denmark, MTG UK, DMC in the Netherlands and AMC Networks Inc. USA.
