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26 November 2012
Daily Internet plc
("Daily" or the Company")
Subscription to raise £550,000
Daily, the ISDX Growth Market quoted internet web hosting solutions company, has conditionally raised
£550,000, before expenses, from a subscription arranged by Merchant Securities of 25,000,000 new Ordinary
Shares at 2.2p per share with institutional and other investors. The subscription is conditional on,
amongst other things, the passing of certain resolutions at a general meeting of the Company and on
admission of the new Ordinary Shares to trading on the ISDX Growth Market.
Background to the Proposals
As Shareholders will be aware, Daily has recorded steady and solid growth over the last few years and cash
flow breakeven at the operating level was achieved during the financial year ended 31 March 2012. Daily now
provides hosting services to more than 50,000 customers, and the Company is currently ranked as the
thirteenth largest supplier of .uk domain name registrations (Source: Nominet). The Directors believe that
the Daily brand is well regarded in the marketplace.
The Company has historically focused on mass-market internet hosting products, which has driven a high
recurring revenue model with 64 per cent. of customers currently bringing repeat business. The current
business is highly scalable and lends itself to bolt-on additional hosting services as well as organic
growth opportunities. The Board has identified certain growth opportunities and, as previously announced,
is already working on 'Daily's Second Phase' which aims to extend the Company's reach into dedicated
servers, Cloud hosting and managed hosting services. This, along with the further development of the
Company's managed hosting solutions, should result in Daily becoming a complete one-stop outsourcing
partner for small-to-medium sized companies within the UK. The Board expects that these solutions will
produce higher revenue per customer and increase gross margin.
The Company raised £582,584 over the course of August and September 2012, by way of a placing and open
offer, to accelerate the development of services, to fund the infrastructure and provide the working
capital required to support this next phase of growth.
The Board believes that the Company will be in a position to rollout the new product range in early 2013.
However, to be able to maximise the launch, the Company has raised additional funds under the Subscription
to invest further in hardware and additional staff and to fund sales and marketing.
In addition, it has always been part of the Company's strategy to move onto the AIM market once it had
gained critical mass. The Board considers that recent developments have delivered sufficient growth and,
accordingly, the Board proposes to use certain of the funds raised to finance its application for admission
to trading on AIM.
In order to raise the cash required for this purpose and to provide additional working capital, the Company
is undertaking the Subscription under which the Subscribers will invest, in aggregate, approximately
£550,000 into the Company by way of a conditional subscription for 25,000,000 new Ordinary Shares at 2.2p
per Ordinary Share. The Subscription is conditional on the passing of the Resolutions at the GM and the
admission of the Subscription Shares to trading on the ISDX Growth Market.
Under the terms of the Subscription Letters, the Subscribers have agreed to subscribe for 25,000,000 new
Ordinary Shares, in aggregate, at the Subscription Price, raising approximately £550,000 before expenses
for the benefit of the Company.
The Subscription is conditional, inter alia, upon the passing of the Resolutions and the admission of the
Subscription Shares to trading on the ISDX Growth Market.
The Subscription Shares, when issued and fully paid, will rank equally in all respects with the issued
Ordinary Shares, including the right to receive all dividends and other distributions declared, made or
paid after Admission.
It is expected that Admission will become effective and dealings in the Subscription Shares will commence
on 20 December 2012.
The General Meeting has been convened for 10.00 a.m. on 19 December 2012 to be held at the registered
office of the Company at Number 14 Riverview, Vale Road, Heaton Mersey, Stockport SK4 3GN.
The Resolutions include an ordinary resolution to authorise the Directors to allot additional Ordinary
Shares and a special resolution to approve the allotment of the Ordinary Shares in connection with the
Subscription and to disapply statutory pre-emption rights in respect of such allotment. The allotment
authorities also facilitate the issue and allotment of Ordinary Shares pursuant to options and warrants
granted by the Company and up to 18,340,928 Ordinary Shares on a non pre-emptive basis at the Directors'
discretion as the Directors believe that it is desirable to maintain a margin of unissued share capital in
order to preserve flexibility for the future.
Following the proposed Subscription, the Company will have 116,752,750 ordinary voting shares in issue. It
is intended that application will be made for the new Ordinary Shares to be admitted to trading on the ISDX
Growth Market. Admission is expected to be on 20 December 2012.
Daily Internet plc
Clive Maudsley, Company Secretary Tel: 0161 975 0434
Merchant Securities Limited
Simon Clements/Virginia Bull Tel: 020 7628 2200
Loeb Aron & Company Limited
Dr Frank Lucas/ Peter Freeman Tel: 020 7628 1128
The following definitions apply throughout this announcement unless the context requires otherwise:
"Admission" the admission of the Subscription Shares to trading on ISDX becoming
effective in accordance with the ISDX Rules
"AIM" the AIM market of London Stock Exchange plc
"Directors" or "Board" the directors of the Company
"Enlarged Issued Ordinary Share the 116,752,750 Ordinary Shares in issue at Admission
"Existing Ordinary Shares" the 91,752,750 Ordinary Shares in issue
"GM" or "General Meeting" the general meeting of the Company convened for 10.00 a.m. on 19
"ISDX" ICAP Securities & Derivatives Exchange Limited
"ISDX Growth Market" the ISDX Growth Market operated by ISDX
"ISDX Rules" the ISDX Growth Market Rules for Issuers published by ISDX relating
to the ISDX Growth Market, as amended from time to time
"Loeb Aron & Company" Loeb Aron & Company Limited
"Merchant Securities" Merchant Securities Limited
"Ordinary Shares" ordinary shares of 0.5p each in the capital of the Company
"Proposal" the proposed Subscription
"Shareholders" holders of Ordinary Shares
"Subscribers" the subscribers for new Ordinary Shares pursuant to the Subscription
"Subscription" the subscription of the Subscription Shares pursuant to the
"Subscription Letters" the conditional agreements dated 16 and 23 November 2012, between the
Company and the Subscribers
"Subscription Price" 2.2p per Ordinary Share
"Subscription Shares" the 25,000,000 new Ordinary Shares to be issued pursuant to the