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Freshwater UK

  • BY: Andrew Hore |
  • POSTED: 24/10/2010 |

PR firm Freshwater UK has decided that it wants to leave Aim.

Freshwater has been frustrated with its inability to use its Aim quotation to grow. Management blames the tough economic conditions and a narrowing of the VCT investment criteria. Freshwater has reported disappointing figures recently, which has not helped the share price. The direct cost of being on Aim of £100,000-£150,000

Freshwater has reduced its dependency on the public sector and 85% of revenues come from the private sector. The company hopes to improve profit in 2010-11.

Shareholders owning more than 60% of the company are in favour of the cancellation, which will be put to the vote on 15 November. The cancellation could happen on 22 November.

The share price has fallen from 13p to 7p a share since the announcement of the proposed cancellation of the Aim quotation. That is not surprising. A share price tends to be marked down when a company says that it is leaving Aim and there will not be a market for much longer. Freshwater is valued at £1.33m.

Freshwater raised £4m at 85p a share when it joined Aim on 16 July 2007. In April, it raised £618,000 via a one-for-five open offer at 20p a share.

A matched bargain facility is planned through JP Jenkins. In the future, a share buyback may be put in motion.

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