Cloudcoco agrees £0.25m sale of Connect subsidiary

18th Oct 2024 11:32

(Sharecast News) - Cloudcoco Group announced the conditional sale of its subsidiary Cloudcoco Connect on Friday, to the BE Company, for £0.25m in cash.

The AIM-traded firm said the transaction included the transfer of net liabilities exceeding £1.7m, adding that it planned to use the proceeds from the sale for working capital purposes.

Cloudcoco Connect provides co-location and data centre services to 260 customers across 32 data centres in the UK.

Following a reorganisation announced on 16 October, certain assets from its managed services, lifecycle, and cloud divisions were transferred to Cloudcoco Limited, which was being sold separately.

For the year ended 30 September 2023, Cloudcoco Connect contributed £7.4m in revenue but posted a pre-tax loss of around £99,000.

Completion of the sale was expected by 31 October, pending the transfer of certain employees under the TUPE regulations.

The board said the sale of Cloudcoco Connect was independent of the sale of Cloudcoco Limited, which was announced previously.

After the transactions, Cloudcoco Group said it would continue as an IT value-added reseller through its subsidiaries, Systems Assurance and More Computers, delivering on-demand IT products and services.

"The sale of Cloudcoco Connect to the BE Company allows the group to focus on expanding our IT value-added reseller and e-commerce businesses, areas where we see significant opportunities for organic growth," said non-executive chair Simon Duckworth.

"This strategic shift will position us to better navigate future challenges and explore new opportunities for the benefit of all shareholders."

At 1045 BST, shares in Cloudcoco Group were up 5.03% at 0.32p.

Reporting by Josh White for Sharecast.com.