Quarto Group Inc (LON:QRT), the leading global illustrated book publisher, has announced today that it has completed the sale of the trade and selected assets of Books & Gifts Direct Limited (“BGD New Zealand”), its direct sales business in New Zealand and last remaining non-publishing business.
The business has been acquired by Etailer BGD (2017) Limited, a company incorporated in New Zealand and formed for the purposes of acquiring the business. It is part of the established online retail group Etailer Limited in New Zealand.
The cash consideration for the sale is US$0.6m (NZ$0.8m) payable over the next two years. In addition, Quarto is entitled to receive 50% of debtor receipts for the next year and 15% of the profit before interest and tax of the business for the next three years. The cashflows will be used to reduce the Group’s bank debt as they are received.
On 31 December 2016, BGD New Zealand had gross assets of US$1.7m (NZ$2.4m). The estimated trading losses and transaction costs for the 2017 period to disposal are approximately US$0.5m (NZ$0.7m). We are in the process of determining the final loss on disposal of this business, however, following the exceptional impairment charges reported in The Quarto Group’s 2016 results, any additional loss now recognised on this disposal is expected to be minimal. We expect to report the loss on disposal and the trading result within Discontinued Operations for The Quarto Group for the year ending 31 December 2017.
Marcus Leaver, Chief Executive of The Quarto Group, commented:
This is a transitional year for Quarto as we refocus the Group on our publishing business. With the disposal of Books & Gifts Direct New Zealand – our last non-core business – Quarto starts a new chapter as a publishing-only business with a unique platform to become the dominant publisher of illustrated books worldwide. In the short-term, everyone across the Group remains focused on delivering our plans for 2017.
Gresham House Strategic PLC (LON:GHS) has a total interest of 4.4% in Quarto Group Inc, correct as of 28 April 2017 month end NAV announcement, released 01 May 2017.
