Last Friday, in a rather wordy statement, the directors of PLUS Markets Group Plc announced what the whole sector has known for months: they are finished as a management team.
Technically they have put themselves up for sale:
“The Board of Directors believes that the Company is well positioned strategically to exploit commercially the opportunities offered by significant changes in the regulatory and technological environment…The Board believes that it is in the best interests of the Company to seek a partner which will help it achieve the scale and reach required to maximise value to stakeholders.”
I, and many others, simply have no idea what they are talking about.
They are hugely loss making, they have no definable strategy and the shares have fallen to £0.98p. The market capitalisation is £3.9m. They had cash of £4.6m as at 30 June 2011. In other words the market values them at their cash value.
It is thought that none of the three major shareholders are interested in injecting any further funds.
PLUS Markets is a Recognised Investment Exchange and thus will have been talking regularly to the Financial Services Authority presumably as the pressure has increased on their capital adequacy position.
For years the management have talked about the hugely expensive development of their trading platforms. Herein lies the conundrum. PLUS Markets has always had the potential to act as an early stage equity fund-raising market. There is an urgent need to improve the supply of new capital to enterprising businesses. The Treasury believe this is best achieved through managed funds and business angels.
Not only does the situation possibly removed PLUS Markets from the sector but it leaves nearly 150 companies wondering about their future.
I am UK chairman of three PLUS Markets companies: there has been no contact from PLUS Markets for months apart from sending their ever increasing invoices for payment.
It is difficult to commercially develop and sustain a small-cap stock market during bear market conditions and the directors of PLUS Markets have undoubtedly faced challenging circumstances.
It is a tragedy that Enterprise Britain has lost yet another source of early stage capital.