Ekay Plc

October 31, 2005 02:00 ET

Ekay plc announces intention to float on AIM and announces the appointment of Tony Sullivan as non-executive Chairman

LONDON, ENGLAND--(CCNMatthews - Oct. 31, 2005) - Ekay plc ("Ekay" or "the Company"), the full-service advertising agency targeting the SME sector, today announces its intention to seek admission of its shares to trading on the AIM Market ("AIM") of the London Stock Exchange through Shore Capital & Corporate Limited, which is acting as Nominated Adviser. Dealings are expected to commence on AIM by the end of November 2005.

Ekay is a full service advertising agency specialising in media planning and buying as well as direct response marketing. In the last three years the Company has seen double digit and profitable growth as a result of targeting the SME market and focusing its services on providing a quantifiable return on investment for its customers. As part of its admission to AIM, the Company is intending to raise approximately £3 million through Shore Capital Stockbrokers Limited, which is acting as stockbroker to the Company, in order to grow the business organically as well as to roll out its business model through complementary acquisitions in key strategic locations across the UK.

The Company was founded in 1994 by Eddie Powell, Chief Executive, who has grown Ekay to become a highly cash generative business with a profit before tax of approximately £1 million for the year ended 31 March 2005.

Media planning and buying accounts for 80% of Ekay's turnover and encompasses broadcast, direct marketing, outdoor, online, print and press. In addition Ekay advises on marketing research and design. The Company also has a strong record of introducing SMEs to advertising mediums, such as broadcast, which have traditionally been the preserve of large budgets and big brands. As a result, the Company benefits from strong client relationships with many of its advertisers growing alongside Ekay. Customers include First Class Mortgages, Lakeside Shopping Centre, Dagenham Motors and Tile Magic.

The SME advertising market represents an estimated 50% of the total UK media market. This is an area that is not traditionally targeted by the large media groups and Ekay differentiates itself by providing bespoke and tailor made solutions for its customers where advertising inventory is secured and traded on a client by client basis. To this end Ekay has helped SMEs, such as Ocean Finance, become leading brands and household names through targeted and cost effective advertising strategies that focus on lean budgets, innovation and return on investment.

Following its Admission to AIM, Ekay will continue to focus on expanding its business through new business and expanding existing client spend by offering new services. The Company also intends to make bolt-on acquisitions that can provide additional specialised services to its existing client base. In addition, the management believes there is a strong growth opportunity in creating a national network of advertising agencies servicing the local SME market, and as such is looking to acquire businesses in strategic geographic locations. The management has already identified several potential acquisitions that would be immediately earnings enhancing.

Eddie Powell, CEO of Ekay, said: "This is a very exciting time for our business and the IPO provides us with the opportunity to reach the next stage of growth as well as the means to reward our staff through a share option scheme.

"We have successfully grown the business very quickly in a relatively static market through innovation and by providing consistent results for our clients. This approach will remain at the heart of our strategy and by injecting our culture into the acquisitions we make we believe we can provide added value to customers and continue to experience the same level of growth in the future."

Ekay has a strong management team with considerable experience in the advertising and media industry. The Board is being further strengthened by the appointment of Tony Sullivan as a non-executive Chairman.

Anthony David Sullivan, 55, has 30 years experience in the advertising and media industry and has represented the interests of the Association of Media Independents on the Council of the Advertising Association. In 1999 Mr Sullivan led the management buy-out of Media Campaign Services and in June 2004 led the MCS's acquisition of Squires Robertson Gill and the company remains an independent media group.

Eddie Powell added: "I am extremely pleased to welcome Tony Sullivan to the Board. He has considerable experience in media, PLCs and M&A transactions which will be invaluable to our strategy going forward."

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Photographs of Eddie Powell (Chief Executive Officer), Stuart Cumberland (Finance Director) are available from Abchurch. To arrange, please contact Sara Dean on 020 7398 7712 or sara.dean@abchurch-group.com

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