Daily Internet plc
LSE : DAIP

November 26, 2012 02:05 ET

Subscription to raise GBP550,000

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UNLAWFUL.
                                                                                                           
                                                                                           26 November 2012

                                            Daily Internet plc
                                         ("Daily" or the Company")
                                                     
                                      Subscription to raise £550,000

Daily,  the  ISDX  Growth  Market quoted internet web hosting solutions company, has  conditionally  raised
£550,000,  before expenses, from a subscription arranged by Merchant Securities of 25,000,000 new  Ordinary
Shares  at  2.2p  per  share with institutional and other investors. The subscription  is  conditional  on,
amongst  other  things,  the passing of certain resolutions at a general meeting  of  the  Company  and  on
admission of the new Ordinary Shares to trading on the ISDX Growth Market.

Background to the Proposals
As  Shareholders will be aware, Daily has recorded steady and solid growth over the last few years and cash
flow breakeven at the operating level was achieved during the financial year ended 31 March 2012. Daily now
provides  hosting  services  to more than 50,000 customers, and the Company  is  currently  ranked  as  the
thirteenth largest supplier of .uk domain name registrations (Source: Nominet). The Directors believe  that
the Daily brand is well regarded in the marketplace.

The  Company  has historically focused on mass-market internet hosting products, which has  driven  a  high
recurring  revenue  model with 64 per cent. of customers currently bringing repeat  business.  The  current
business  is  highly scalable and lends itself to bolt-on additional hosting services as  well  as  organic
growth  opportunities. The Board has identified certain growth opportunities and, as previously  announced,
is  already  working  on  'Daily's Second Phase' which aims to extend the Company's  reach  into  dedicated
servers,  Cloud  hosting  and  managed hosting services. This, along with the further  development  of  the
Company's  managed  hosting  solutions, should result in Daily becoming  a  complete  one-stop  outsourcing
partner  for  small-to-medium sized companies within the UK. The Board expects that  these  solutions  will
produce higher revenue per customer and increase gross margin.

The  Company  raised £582,584 over the course of August and September 2012, by way of a  placing  and  open
offer,  to  accelerate  the development of services, to fund the infrastructure  and  provide  the  working
capital required to support this next phase of growth.

The  Board believes that the Company will be in a position to rollout the new product range in early  2013.
However,  to be able to maximise the launch, the Company has raised additional funds under the Subscription
to invest further in hardware and additional staff and to fund sales and marketing.

In  addition,  it has always been part of the Company's strategy to move onto the AIM market  once  it  had
gained  critical mass. The Board considers that recent developments have delivered sufficient  growth  and,
accordingly, the Board proposes to use certain of the funds raised to finance its application for admission
to trading on AIM.

In order to raise the cash required for this purpose and to provide additional working capital, the Company
is  undertaking  the  Subscription  under which the Subscribers will invest,  in  aggregate,  approximately
£550,000 into the Company by way of a conditional subscription for 25,000,000 new Ordinary Shares  at  2.2p
per  Ordinary Share.  The Subscription is conditional on the passing of the Resolutions at the GM  and  the
admission of the Subscription Shares to trading on the ISDX Growth Market.

The Subscription
Under  the  terms of the Subscription Letters, the Subscribers have agreed to subscribe for 25,000,000  new
Ordinary  Shares, in aggregate, at the Subscription Price, raising approximately £550,000  before  expenses
for the benefit of the Company.

The  Subscription is conditional, inter alia, upon the passing of the Resolutions and the admission of  the
Subscription Shares to trading on the ISDX Growth Market.

The  Subscription  Shares, when issued and fully paid, will rank equally in all respects  with  the  issued
Ordinary  Shares,  including the right to receive all dividends and other distributions declared,  made  or
paid after Admission.

It  is  expected that Admission will become effective and dealings in the Subscription Shares will commence
on 20 December 2012.

General Meeting
The  General  Meeting  has been convened for 10.00 a.m. on 19 December 2012 to be held  at  the  registered
office of the Company at Number 14 Riverview, Vale Road, Heaton Mersey, Stockport SK4 3GN.

The  Resolutions  include  an ordinary resolution to authorise the Directors to allot  additional  Ordinary
Shares  and  a  special resolution to approve the allotment of the Ordinary Shares in connection  with  the
Subscription  and  to  disapply statutory pre-emption rights in respect of such  allotment.  The  allotment
authorities  also  facilitate the issue and allotment of Ordinary Shares pursuant to options  and  warrants
granted  by  the Company and up to 18,340,928 Ordinary Shares on a non pre-emptive basis at the  Directors'
discretion as the Directors believe that it is desirable to maintain a margin of unissued share capital  in
order to preserve flexibility for the future.

Following the proposed Subscription, the Company will have 116,752,750 ordinary voting shares in issue.  It
is intended that application will be made for the new Ordinary Shares to be admitted to trading on the ISDX
Growth Market. Admission is expected to be on 20 December 2012.

Enquiries:

Daily Internet plc                                                                                    
Clive Maudsley, Company Secretary                                                   Tel: 0161 975 0434
                                                                                                      
Merchant Securities Limited
Simon Clements/Virginia Bull                                                        Tel: 020 7628 2200
                                                                                                      
Loeb Aron & Company Limited                                                                           
Dr Frank Lucas/ Peter Freeman                                                       Tel: 020 7628 1128
                                                                                                      




                                                      
                                                Definitions
                                                      
The following definitions apply throughout this announcement unless the context requires otherwise:

"Admission"                           the  admission of the Subscription Shares to trading on ISDX  becoming
                                      effective in accordance with the ISDX Rules
                                      
"AIM"                                 the AIM market of London Stock Exchange plc
                                      
"Directors" or "Board"                the directors of the Company

"Enlarged Issued Ordinary Share       the 116,752,750 Ordinary Shares in issue at Admission
Capital"                              

"Existing Ordinary Shares"            the 91,752,750 Ordinary Shares in issue
                                      
"GM" or "General Meeting"             the  general  meeting of the Company convened for  10.00  a.m.  on  19
                                      December 2012
                                      
"ISDX"                                ICAP Securities & Derivatives Exchange Limited
                                      
"ISDX Growth Market"                  the ISDX Growth Market operated by ISDX
                                      
"ISDX Rules"                          the  ISDX  Growth Market Rules for Issuers published by ISDX  relating
                                      to the ISDX Growth Market, as amended from time to time
                                      
"Loeb Aron & Company"                 Loeb Aron & Company Limited

"Merchant Securities"                 Merchant Securities Limited

"Ordinary Shares"                     ordinary shares of 0.5p each in the capital of the Company
                                      
"Proposal"                            the proposed Subscription

"Shareholders"                        holders of Ordinary Shares
                                      
"Subscribers"                         the subscribers for new Ordinary Shares pursuant to the Subscription
                                      
"Subscription"                        the subscription of the Subscription Shares pursuant to the
                                      Subscription Letters
                                      
"Subscription Letters"                the conditional agreements dated 16 and 23 November 2012, between the
                                      Company and the Subscribers
                                      
"Subscription Price"                  2.2p per Ordinary Share
                                      
"Subscription Shares"                 the 25,000,000 new Ordinary Shares to be issued pursuant to the
                                      Subscription
                                      

Contact Information

  • Daily Internet plc