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November 3, 1995

AZLAN CAPITALISES ON ITS TORRID SHARE PRICE BY TAPPING HOLDERS FOR ú20m

By CBR Staff Writer

Azlan Group Plc is attempting to make hay while the sun shines on its share price by raising ú20.4m with an open offer to shareholders, and has also made another acquisition, this time buying Ronin BV, a Dutch network computing distributor, its fifth acquisition in the last 18 months. The offer of 4.86m new shares, issued at 440 pence on a two-for-nine basis, will be used in part to finance the acquisition. Azlan’s shares were up 22 pence at 480 pence yesterday. They have put on around 150 pence in the last month, which included the announcement of its distribution contract with Netscape Communications Corp for its Supernet on-line system (CI No 2,767) and a statement that said the company was trading ahead of budget (CI No 2,766). The new money will be used to assist with the acquisition and to write off Ronin’s ú2.9m debt, and for further acquisitions, which chief executive Christian Martin said would be in Europe, but he would not be more specific. Some of the money will be used to wipe out Azlan’s own debt. Martin indicated that this was in the region of ú10m. He said that there would be some of the new money left after all the outgoings, but could not say how much. Meanwhile, Azlan has turned in a strong first half, making its troubles a year after flotation seem like a temporary aberration (CI No 2,557). Pre-tax profits were up to ú4.4m, from ú1.1m this time last year, on turnover that rose 93% to ú72.7m. In June, Azlan acquired Adcomp Data Systems Italia Srl, a Milan-based network computing distributor for maximum consideration of ú600,000 (CI No 2,684). That company turned over ú1.5m in the period, before intra-group turnover. Turnover in the UK was up 36% to ú33.7m and continental European sales trebled to ú39.0m. Gross margin was maintained at around 24%. The acquisition of Ronin, for an initial consideration of ú1.95m, brings to seven the number of Azlan offices on the continent. The consideration comprises ú1.45m in cash and ú500,000 in an issue of shares, which are not part of the open offer. The earn-out of up to a further ú5m is dependent on Ronin meeting targets until March 1999. In the year to last December, Ronin made ú200,000 pre-tax profits from ú16.4m turnover. Azlan signed a pan-European distribution agreement with IBM Corp for its networking products in April (CI No 2,642). The interim dividend is up 20% on a year ago, at 1.2 pence per share. The second half has continued where the first left off with a strong start, according to Martin, and the group is now well placed for the future, he added.

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