BoD proposes sale of Hot Tuna brand

15 Nov '11

5 min read

Commenting on current trading, Francis Ball, Executive Chairman, said:
"We have made good progress with Hot Tuna. Sales and margins in the first four months of this financial year are well ahead of the same period last year. Our PR campaign is proving exceptionally successful in getting the Hot Tuna brand in front of relevant young people.

The launch in of the transactional website in the UK in September and the on-going development of an important trading relationship in Australia and New Zealand are exciting. The growth of sales in Australia indicates good awareness of, and support for, the Hot Tuna brand in its homeland.

The retail environment continues to be challenging in the UK, US and continental Europe which is undoubtedly impacting revenues in the current financial year. Action has already been taken to reduce costs. However there is a need to invest in and promote the Hot Tuna brand, and our rate of growth, whilst encouraging, is slower that previously expected."

Proposed disposal of the Hot Tuna brand
In light of current trading being below budget, and the Board's belief that it would be difficult for the Company to raise new investment from existing shareholders for the development and promotion of the Hot Tuna brand, the Board believes that shareholders interests will best be served by seeking a buyer for the Hot Tuna brand and all the assets and liabilities of the Company.

Board Changes
Francis Ball, Geoff O'Connell and Oscar Verden have indicated that, on completion of the sale of the Hot Tuna brand and the assets and liabilities, they will step down from the Board. Marcus Yeoman will remain on the Board and a new director will be appointed. The Board will, following completion of the sale of the Hot Tuna brand focus on identifying attractive acquisition opportunities for Hot Tuna (International) plc.

Commenting on the proposed sale of the Hot Tuna brand, Francis Ball said: "The Board and management team remains enthusiastic about the future of the Hot Tuna brand, and expects the current rate of sales growth, and improved margin, to be sustained. It is unfortunate that the current equity funding environment makes it very difficult for us to raise further capital and as a result we believe that the future of the business, its customers, distributors, suppliers and employees is best served through a sale of the brand."

AIM Rules for Companies
The Board anticipate that any sale of the Hot Tuna brand will be deemed to result in a fundamental change of business under Rule 15 of the AIM Rules for Companies and therefore will be conditional on consent from the Company's shareholders at a general meeting.

Following a sale of the Hot Tuna brand the Company will have disposed of all of its trading businesses and therefore under Rule 15 of the AIM Rules for Companies it will be re-classified as an Investing Company and will be required to adopt an investing policy, which must also be approved by the Company's shareholders.

Hot Tuna International Plc

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