The AIM-listed marcoms group is seeking shareholder approval for the cancellation of its listing.
In a statement this morning the firm said: ‘The board believes that circumstances have changed so significantly since the company joined AIM that the original assumptions on which admission to trading on AIM was based no longer apply.’
It added that it ‘now believes that AIM is unlikely to be a vehicle for growth funding for a company of Freshwater's size for the foreseeable future’ and pledged instead to refocus the business on building shareholder value through organic growth.
When Freshwater joined AIM in July 2007, it was hoping to create a substantial marcoms group through a combination of organic growth and acquisitions.However, it said this morning that ‘The last two years have proved much more difficult than the board could have anticipated.’
‘As a result, the Board has reluctantly concluded that the lack of market enthusiasm for funding small companies, the depressed share price and the absence of meaningful liquidity in the Company's shares are likely to continue to be problems for some time to come, making it impossible to deliver a strategy of creating a substantial PR and marketing group by using equity to fund acquisitions.’
In August Freshwater issued a profit warning to the stock market, blaming a drop in fee income from the NHS.
Chief executive Steven Howell argued at the time that the comms industry was suffering a 'disproportionate attack' from cuts in Government spending.
He said: 'PR is being stigmatised by the way in which these cuts are being made. The Government seems to equate PR with waste…The word "consultancy" is almost a form of abuse in some people's vocabulary.'