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
Shield Service Group Plc