The WiMAX spectrum licences were held within the Freedom4 Limited sub-group, which was classified as a disposal group held for sale and valued at £4.2m within the interim Daisy Group plc Consolidated Balance Sheet on 30 September 2009. In the nine month period to 30 September 2009, the Freedom4 Limited sub-group made a loss of £2.4m which was disclosed within discontinued operations in the interim Income Statement. Since that date, the results of the Freedom4 Limited sub-group have not been consolidated within the Daisy Group plc results.
The carrying value of the investment had increased to £4.9m as a result of additional intercompany funding provided by the Company prior to disposal of the spectrum licences. The sale of the licences will eliminate an annual cash outflow of £0.8m, whilst the subsequent closure of the Freedom4 Limited sub-group will save an additional £1.0m in cash per annum.
The Company has also disposed of its non-core, loss-making WiFi business (Freedom4 WiFi Limited). This has been sold to the existing management team for a nominal sum. The WiFi business has been disclosed within discontinued operations since the 30 September 2009 and made a loss of £0.3m in the 15 month period to 31 March 2010. The WiFi business represented a cash drain of £0.2m per annum for the Company.
Matthew Riley, CEO of Daisy Group, said: “Our core strategy is to become the leading provider of unified communications to the SME and mid-market business customers.
“The WiMAX and WiFi businesses were not core to the Daisy Group, and the disposals mean we can focus on our unified communications strategy, as well as improve cash flow.”