Shield Service Group Plc
LSE : SSGP

November 02, 2009 03:18 ET

Statement re Admission to PLUS Markets

SHIELD SERVICE GROUP PLC
ADMISSION ANNOUNCEMENT


The  Directors  of  Shield Service Group plc ("the Company" or "Shield") are pleased to announce  that  the
Company's shares have commenced trading on PLUS Markets ("PLUS") today.

The Company is classified under Section 58 of the FTSE Global Classification System, Support Services.

The Company has admitted its entire Share Capital which is made up of 7,710,020 shares of £0.10.

The Company has granted, to Malcolm Rose and Oliver Weisflog, options totaling 741,965 Ordinary Shares at a
subscription  price  of £0.20 per Ordinary Share. The options are not to be exercised  before  23  February
2010.


BACKGROUND

Shield  offers its services throughout London, the Home Counties (the areas which surround London) and  the
south  east  of  England.  Its  core business is office cleaning but it also  offers  grounds  maintenance,
specialist computer cleaning, window cleaning, washroom services and janitorial supplies.

Shield  currently  operates  approximately 500 commercial contracts.  Most  of  its  clients  subscribe  to
revolving contracts which often continue for several years and underpin the ongoing business.

Shield's  clientele includes offices, schools, showrooms, factories and warehouses, leisure and  recreation
centres and government departments.

More complete details of Shield's operations can be found by visiting its website at www.shieldgroup.co.uk.

It  has been a deliberate policy of the Board to minimise risk by developing what the Board considers to be
a safe mix of business. It is the Board's opinion that Shield's dependence on major clients is minimal with
its  largest  customer  representing  approximately 2% of revenue and its  top  50  customers  representing
approximately 38% of revenue.

Contracts  are located in London, the Home Counties and the south east of England. Shield's head office  is
located in Caterham close to the M25 with regional offices in London and Arundel and facilities in Didcot.

Shield  maintains a health and safety policy and carries out site specific risk assessments in relation  to
both  specified cleaning activities and the control of substances hazardous to health.  In  addition  to  a
health  and safety manager with a NEBOSH National General Certificate in Health and Safety, Shield's health
and safety procedures are audited on an annual basis by an external independent company.

Shield's   accreditations  include  BS  EN  ISO  9001:2000,  BS  EN  ISO  14001:2004,  SAFEcontractor   and
Constructionline. Shield is also a member of The British Institute of Cleaning Science (BICSc).

Shield  has  been  awarded  registered body status with the Criminal  Records  Bureau  in  accordance  with
paragraph  120  of the Police Act 1997 and is able to use the disclosure service to verify the  suitability
of staff when working on sensitive contracts.

Shield's  workforce includes approximately 14 managers and approximately 1400 full and part  time  cleaning
operatives.

Shield  carries  standard employers' liability insurance of £10,000,000 and public and  products  liability
insurance of £5,000,000.

Shield  Cleaning Services Limited was incorporated in England and Wales on 29 May 1997 as a private limited
company  and became a wholly owned subsidiary of Shield on 2 June 1998. Shield was incorporated in  England
and Wales as a public limited company on 1 June 1998.

Shield  later  became the main operating company and all its subsidiaries and acquisitions have  since  had
their operations hived up and ceased trading.


REASONS FOR ADMISSION

The Board considers that admission to PLUS will provide the shareholders of the Company with an ongoing and
independent valuation of their holdings in Shield.

It  is also the Board's opinion that admission will help ensure the Company's continued growth by providing
a market for its shares and a platform for financing future acquisitions at the appropriate time.

The  Board  believes  that  Admission will enable the Company to motivate  and  reward  its  directors  and
employees with meaningful share options in quoted shares for the long term benefit of the shareholders.



THE BOARD OF DIRECTORS

Robin Pritchard BSc (age 64) Chairman

Robin  started  his  career with the family business of Pritchard Cleaners in the  early  sixties  and  was
present for their admission to the London Stock Exchange.

In  1967  he  left  Pritchard's and founded Academy Office Cleaning Services Ltd.  After diversifying  into
manned  guarding,  he  formed the Securiguard Group Plc and was Chairman until 1982 and  led  them  to  the
Unlisted  Securities Market (a market set up by the London Stock Exchange which operated  from  1980  until
1996 for the trading of shares of small to medium sized companies).

He  remained on the board of directors of Securiguard Group plc as a non-executive director for  a  further
ten  years  during  which time the company moved up to a full London Stock Exchange  listing  and  expanded
internationally. Robin left the company in 1993 after the company  was taken over by Rentokil plc following
a hostile bid.
        
In 1997 he founded Shield Cleaning Services Ltd with his business partner Malcolm Rose.

Malcolm Rose MBA (age 52) Managing Director

Prior  to  co-founding Shield Cleaning Services Ltd, Malcolm worked in the property  sector  where  he  was
experienced  at  senior level in project management, taking direct responsibility for major  joint  venture
property development projects. Since its inception, he has been committed to implementing a working plan to
establish  Shield  as a major force in the industry and is responsible for the day to day  running  of  the
Company.

Oliver Weisflog BSc DMS (age 57) Director of Corporate Development

Oliver  joined  the Company in 2009 as Director of Corporate Development with over 30 years  experience  in
support services. He has worked as a director and managing director of major companies in the cleaning  and
hygiene  related  services including a position on the board of OCS Group Ltd, the UK's  largest  privately
owned  support  services  company.  Prior to joining Shield he worked as  a  consultant  for  cleaning  and
facilities management companies.

Kenneth Macpherson CA (age 66) Non-Executive Director

Kenneth  joined the Company in 2009 as Non-Executive Director. He is a member of The Institute of Chartered
Accountants of Scotland and has held senior executive positions in the oil and gas industry including  W.R.
Grace  &  Co in New York, Champlin Petroleum Company UK, a branch in England of Champlin Petroleum  Co.,  a
Delaware  company,  Champlin  Petroleum  (UK) Limited, Deminex UK Exploration  &  Production  Limited,  the
International Energy Development Corporation S.A., and IEDC Services UK Limited.



DIRECTORS' CURRENT AND PAST DIRECTORSHIPS HELD IN LAST FIVE YEARS

 Director                   Current directorships                        Previous directorships
                                                                         
 Robin Pritchard            Shield Cleaning Services Limited             None
                            Enviroclean Southern Services Limited
                            
 Malcolm Rose               Blue Shield Security Services Limited        None
                            Controlled Cleaning Services Limited
                            Enviroclean Southern Services Limited
                            Interact - The Service Company Limited
                            Shield Cleaning Services Limited
                            Tecnet Services Limited
                            
 Oliver Weisflog            Eiger Management Solutions Limited           Cannon Hygiene International Ltd
                                                                         Cannon Hygiene Limited
                                                                         O.C.S. Group Limited
                                                                         OCS Smarts Limited
                                                                         Throwers Limited
                                                                         OCS Group UK Limited
                                                                         OCS Group International Limited
                                                                         Forward Aegis Limited
                                                                         PCT Environmental Services Ltd
                                                                         Greenhunter Limited
                                                                         Cannon Ecaflo Limited
                                                                         
 Kenneth Macpherson         Macpherson International Services Ltd        None




SHAREHOLDERS WITH OVER 3% OF THE ISSUED SHARE CAPITAL
                                                            
 Shareholder        Number of Ordinary         Percentage of
                                Shares         Issued  Share
                                                     Capital
                                                            
 Robin Pritchard             7,229,802                93.77%

In  accordance with sections 252 and 254 of the 2006 Act, the number of Ordinary Shares shown  as  held  by
Robin  Pritchard  comprises: (1) 6,529,342 Ordinary Shares held by Arcalis Investments Limited,  a  company
wholly owned by KFS Nominees Limited, a company incorporated in the British Virgin Islands which holds  the
shares  in Arcalis Investments Limited on trust for the TRP Settlement, a trust established under the  laws
of  the  British  Virgin Islands and of which Robin Pritchard is a beneficiary; and  (2)  700,460  Ordinary
Shares held by Juliana Izquierdo Serrano.


RISK FACTORS

The  attention of potential investors is drawn to the fact that ownership of shares in the Company involves
a  variety  of  risks.   Investors should be aware of the risks associated with  a  smaller  company.   All
potential investors should carefully consider the entire contents of the Admission Document including,  but
not  limited  to, the factors described below before deciding whether or not to invest in the Company.  The
information  below does not purport to be an exhaustive list or summary of the risks affecting the  Company
and  are  not  set  out in any particular order of priority. There may be additional  risks  of  which  the
Directors  are  not  aware.  Investors should carefully consider these risks before making  a  decision  to
invest in the Company.

The  Directors consider the following risks to be most significant for potential investors, but  the  risks
set out below do not necessarily comprise all those associated with an investment in the Company.

    (a)     the success of the Company depends largely upon the expertise and experience of the directors of
            Shield, details of which are set out in Part 4 of the Admission Document. The Directors (with the exception
            of the Non-Executive Director) are restricted from accepting or performing duties with any other company or
            partnership without the express permission of the Board;
    
    (b)     although  admission of the Issued Shares to trading on the PLUS Market has  been  accepted,  no
            certainty can be provided at this stage that the Issued Shares will remain trading on the PLUS Market or
            other investment exchange at any time in the future. The market value of Ordinary Shares following
            Admission to trading on any market may not necessarily reflect the underlying net asset value of the
            Company;

    (c)     admission to the PLUS-quoted Market should not be taken as implying that there will be a liquid
            market for the Ordinary Shares. It may be more difficult for an investor to realise his investment on the
            PLUS-quoted Market than to realise an investment in a company whose shares are quoted on the Official List
            of UK Listing Authority. The value of the Ordinary Shares may go down as well as up.  Investors may
            therefore realise less than their original investment, or sustain a total loss of their investment;

    (d)     continued trading of the Issued Shares on the PLUS-quoted market is entirely at the discretion of
            PLUS Markets plc;

    (e)     the PLUS-quoted market is not AIM or the Official List operated by The London Stock Exchange plc.
            Consequently, it may be more difficult for an investor to sell his or her Ordinary Shares and he or she may
            receive less than the amount paid.  The market price of the Ordinary Shares may not reflect the underlying
            value of the Company's net assets or operations;

    (f)     the  share  prices  of  public  companies are often subject to  significant  fluctuations.   In
            particular, the market for shares in smaller public companies is less liquid than for larger public
            companies.  Consequently, the Company's share price may be subject to greater fluctuation and the Ordinary
            Shares may be difficult to sell;

    (g)     the Ordinary Shares are intended for capital growth and therefore may not be suitable as a short-
            term investment.  Investors may therefore not realise their original investment at all, or within the time-
            frame they had originally anticipated;

    (h)     any changes to the regulatory environment, in particular the PLUS-quoted market rules set out by
            PLUS Markets plc regarding companies such as Shield could for example, affect the ability of the Company to
            maintain a trading facility on the PLUS-quoted market;

    (i)     the Company may need to raise funds in the future, either to complete a proposed acquisition or
            investment or to raise additional working capital for such an acquisition or investment. Any equity
            offerings to new investors could result in dilution for existing shareholders of the Company. Furthermore,
            there can be no guarantee or assurance that additional funds can be raised when necessary.  In these
            circumstances the Company would need to secure additional funding from other sources and/or scale back its
            future plans;
    
    (j)     the Company may be adversely affected by changes in economic, political, judicial, administrative,
            taxation or other regulatory or other unforeseen matters;
    
    (k)     Shield's gross margins may be impaired in meeting customers' demands to reduce costs in times of
            economic difficulties. It is the Board's belief that the Company's best interests are served in helping
            customers economise proactively and will do so as far as possible with minimal effect on its margins;
        
    (l)     Shield's principal costs are staff wages and wage related costs which are linked to sales revenue.
            Any inability to generate sufficient revenue in the future may adversely affect its profitability. Moreover
            changes in employment laws such as minimum wage levels, employer National Insurance rates, health and
            safety rules and regulations and both UK and EU immigration legislation can also impact on  the
            profitability of the Company;
    
    (m)     Shield's customers may decide in the future to operate in house services exclusively themselves or
            through a competitor of Shield, which could adversely affect Shield's revenue and profitability.

    (n)     The  profitability of the Company will depend partly upon the performance and expertise of  its
            directors and senior management.  The loss of the services of the Company's directors or senior management,
            or a loss of the ability to continue to attract and retain qualified employees, may have a material adverse
            effect on the Company.

    (o)     The  Company  has accreditations with various diverse independent bodies.  The  loss  of  these
            accreditations could affect its ability to source and/or retain new and existing contracts.

    (p)     Notwithstanding that the Company maintains employers' liability and public and products liability
            insurance, should any unforeseen uninsured losses occur, the Company may be adversely affected.

    (q)     Should any claims be brought against the Company, the Company could be adversely affected by both
            any financial awards payable to claimants and any resulting negative publicity.

    (r)     From  time  to  time,  the  Company  makes acquisitions  of  other  companies  and  businesses.
            Notwithstanding that due diligence is carried out in respect of each acquisition, there is no guarantee
            that  the  acquisition will be free of risks or that the acquisition will improve the Company's
            profitability.  For example, the Company may not succeed in retaining the contracts of the acquired company
            or business.    The value of the business or company bought may transpire to be less than that estimated
            prior to the acquisition and less than the amount which the Company had paid to acquire the business or
            Company.
    
    (s)     Shield's profitability depends largely on its ability to source new contracts and retain existing
            ones.


Investment in the shares of this Company may not be suitable for all individuals.  Investors are  therefore
strongly  recommended to consult an adviser authorised under the Financial Services and Markets  Act  2000,
who specialises in investments of this nature before making a decision to invest in the Company.


DOCUMENT AVAILABLE FOR INSPECTION
Copies  of  the  Admission Document will be available free of charge during usual  business  hours  on  any
weekday  (Saturdays and public holidays excepted) at the offices of Alfred Henry Corporate Finance  Limited
at Finsgate, 5-7 Cranwood Street, London, EC1V 9EE.


CORPORATE ADVISER & CONTACT DETAILS

Alfred  Henry  Corporate Finance Limited is acting as the Corporate Advisor for the  Company,  and  can  be
contacted at:

Finsgate
5-7 Cranwood Street
London
EC1V 9EE
Email: sjs@alfredhenry.com
Telephone: +44 (0)20 7251 3762

The Directors of the Company accept responsibility for this announcement.

2 November 2009

Contact Information

  • Shield Service Group Plc