Direct Line Regulatory News (DLG)

9 Feb 2005 07:00

Delling Group PLC09 February 2005 DELLING SIGNS AGREEMENTS FOR OVER £3.7 MILLION PER ANNUM AND TRADING UPDATE Delling Group has entered into contracts with Hewlett Packard and the retailchain Beijer plus a number of other customers. The Board believe that thecombined value of these new contracts represent more than £3.7 million per annumin revenue terms. The agreements will last between two and five years. Incombination the annual value of these agreements represents almost twice theGroup's turnover in 2004. The agreements with HP and Beijer are for the Swedish market and represent astrong support for the viability of a business concept that includesoutsourcing, which the Group has developed through its subsidiary Depicta. The Group has also entered into two other agreements, the first withScandinavian Service Partners, a subsidiary of Compass Group, to provideIT-solutions to support on-demand print in its restaurants throughout Sweden andplasma screen communication for customers. The second, through its subsidiaryButler, with an international restaurant chain regarding a turnkey concept forplasma screens in its 60 restaurants in Norway. The Group has also won a numberof new mid sized customers in all its business areas including an agreement withStatoil regarding supply of market material to its petrol stations. These deals represent a break through in establishing the Group as a leadingplayer in the growing market of outsourcing back office functions in marketingdepartments in the Nordic area. The growth in the market for outsourcing of backoffice functions in marketing departments is driven by new business conceptsmade possible by the development of new IT-solutions. The outsourcing concept makes it possible for the Group's customers to makesignificant cost savings and allows marketing departments to focus on morestrategic tasks. The outsourcing deals are tailor made to each customers' needsand can include procurement of all marketing information material, logistics andinformation storage. The contracts have opt out clauses in accordance with common business standards.However, the actual experience of the directors is that such contracts are oftenextended substantially beyond their formal life span. The Group is aggressively pursuing a growth strategy through organic growth andthrough suitable acquisitions. The Board expects to announce its preliminaryresults in April 2005 and the Directors continue to be confident about theGroup's trading performance. Aksel Bratvedt, Delling Chief Executive Officer, commented: "These deals represent a major turning point in the Group's development as ourstrong organic growth continues to accelerate. As we already have establishedthe cost base and organisational infrastructure to handle new outsourcingcustomers, these contracts will have a significant positive effect on theGroup's net cash flow and enhance margins." 9 February 2005 Enquiries: Delling Group 020 7010 8210Aksel Bratvedt, Chief Executive OfficerGeir Lolleng, Chief Operating Officer Seymour Pierce LimitedDru Edmonstone 020 7107 8000 College Hill 020 7457 2020Adrian Duffield/Clare Warren This information is provided by RNS The company news service from the London Stock Exchange