Under the Placing, the new Ordinary Shares have been conditionally placed with institutional investors and other investors by KBC Peel Hunt Ltd ("KBC Peel Hunt"). As with previous fundraisings, the board of directors ("the Board") will use the net proceeds of the Placing to provide further working capital and strengthen the Company's balance sheet to build on its recent sales successes and support major new sales opportunities both in London and the USA.
The new Ordinary Shares will be allotted credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on or after the date of their allotment.
The Placing is conditional on the passing of the resolution to be proposed at an Extraordinary General Meeting of the Company to be held at 11.00 am on 23 May 2005, admission of the new Ordinary Shares to trading on AIM becoming effective and on the placing agreement, today entered into by the Company and KBC Peel Hunt, having become unconditional in all other respects and not having been terminated in accordance with its terms on or before 24 May 2005 (or such later time or date, being not later than 7 June 2005, as KBC Peel Hunt may determine).
Application will be made to London Stock Exchange plc for the new Ordinary Shares to be admitted to trading on AIM and it is expected that admission will become effective and that dealings will commence in the new Ordinary Shares on 24 May 2005.
Background to and reasons for the Placing
The Company has made good progress through the second half of the financial year in delivering its strategy. Following the recent announcements regarding two significant contracts for the take up of its Application Services by major institutions, the Company has now successfully gone live with its application service in London in support of the new CME FX on Reuters service, which gives Reuters Dealing 3000 users direct access to CME's foreign exchange ("FX") futures and enhance the ability to seamlessly trade FX spot and futures. FFastFill was chosen by Reuters as the launch partner for this project in May 2004, and has been responsible for building and maintaining a trade order routing service that enables traders using Reuters Dealing 3000 to also execute CME's FX futures contracts. FFastFill has initially signed five major institutions for this service.
In addition, the Company announced a new application service provision contract with one of its leading customers, investment bank Dresdner Kleinwort Wasserstein ("DrKW"), to provide a complete managed service to DrKW's Listed Products Group. DrKW's Listed Products Group provides the bank's institutional clients with a front-to-back service in all exchange-traded derivatives, incorporating the major financial, commodity and metal exchanges worldwide. Its web-based trading system GATOR (Global Access to Order Routing) offers direct market access to over twenty of the world's leading futures and options exchanges and is powered by FFastFill. The new contract, which runs until 2012, will provide DrKW's Listed Products Group with a highly sophisticated managed application service covering trading, pre and post trade risk management and global order tracking for futures and options on all the major European and US futures and options exchanges including: Chicago Board of Trade (CBOT), Chicago Mercantile Exchange (CME), Eurex, Eurex US, Euronext.Liffe, Euronext Paris, International Petroleum Exchange (IPE), Italian Derivatives Market (IDEM) and London Metal Exchange (LME).
The Company believes that the market for Application Services for the trading community is growing significantly and that these recently announced contracts will help the Company to capture additional new customers.
The Company is planning on announcing its results in mid-May and is expecting to announce revenue growth of approximately 60 per cent. for the year ended 31 March 2005 with the loss being broadly in line with the previous year, with all costs associated with building the new services having been expensed in the period.
Keith Todd, FFastFill's Executive Chairman said: "The Company's strategy, to move forward as an application service provider, has been vindicated by these recent successes in the market. This together with the support from the institutional shareholders through the Placing announced today puts the Company in an excellent position to gain further market share over the next twelve months."
The net cash proceeds from the Placing will further strengthen the Company's balance sheet and the Board believes that this additional strength will be commercially beneficial to the Company to enable it to engage successfully with large customers.
The Company considered other methods of raising the necessary funds including the offer of new Ordinary Shares by way of an open offer or a rights issue but decided that in the circumstances, taking account of time constraints and transaction costs, the proposed Placing was the most appropriate method.