Spice refuses to discuss new Cinven offer

6th Jul 2010 11:54

Outsourced utility support services group Spice is still resisting the bid overtures of Cinven even though the European buy-out specialist has increased its indicative offer.The new conditional offer from Cinven is in the range of 62p to 65p per Spice share, up from its sighting shot of 56p announced last month. Despite the increase, Spice believes that the terms undervalue the company and the management has declined to enter into negotiations with Cinven.Martin Towers, chief executive of Spice said the company has made significant progress in recent months and is well positioned for the new financial year and beyond. Towers's comments accompanied the release of preliminary results for the year to 30 April 2010 which showed revenue rise 11% to £310.7m from £279.6m the year before and adjusted profit before tax dip slightly to £31.5m from £31.7m a year earlier.The adjusted profit before tax figure excludes exceptional costs and amortisation of intangible fixed assets; with these included the company posted a pre-tax profit of £16.7m on continuing operations, down from £25.4m in 2009. Discontinued operations made a post-tax loss of £65.6m, tipping the company into the red with a loss attributable to equity shareholders of £56.2m, versus a profit of £17.2m a year earlier.The discontinued activities comprise the group's gas, telecoms and facilities business."Our continuing businesses have strong underlying regulatory and environmental drivers, whilst the Telecoms and Gas businesses have been sold. The group is now streamlined, and its cost base and net debt levels have been reduced," Towers claimed. Net debt as at 30 April was £117.5m, up from £95.8m at the end of April 2009, but since then the company has received the proceeds from the disposal of its telecoms business, which resulted in pro-forma net debt of £91m and much reduced earn out payment obligations.The full year dividend has been increased by 1.62p from 1.5p the year before.