OREANDA-NEWS. Morses Club, a leading UK non-standard consumer finance company, announces that it has today published its Admission Document following the successful pricing of its £68.5 million placing and has applied for the Admission of its entire issued share capital to AIM, a market operated by London Stock Exchange plc ("AIM") ("Admission").  Admission is expected to occur, and dealings commence, at 8.00am on Thursday, 5 May 2016, under the ticker "MCL" and with ISIN GB00BZ6C4F71. 

Offer highlights

·    The Placing Price has been set at 108 pence per Placing Share. Based on the Placing Price, the market capitalisation of Morses Club at Admission will be approximately £140 million.

·    The Placing is expected to raise £68.5 million of gross proceeds for the selling shareholder, Perpignon Limited (the "Selling Shareholder").

·    Immediately following Admission:

o The Selling Shareholder will hold approximately 51.0% of the Company's issued ordinary share capital; and

o Directors will hold approximately 5.1% of the Company's issued ordinary share capital.

·    On Admission, the Company will have 129,500,000 ordinary shares in issue with a free float of approximately 44%.

·    Numis Securities Limited is acting as nominated adviser and joint bookrunner to the Company, Panmure Gordon (UK) Limited is acting as the Company's joint bookrunner and Deloitte Corporate Finance is acting as the Company's financial adviser.

Company highlights

·    Strong management team - The Directors of the Company have significant experience in home collected credit in the UK ("UK HCC") and they are supported by an experienced management team.

·    Prudent credit control and high return lending - The Company's credit policy has contributed to the improvement in the Company's impairment rates and profitability. The Company's adjusted profit before tax increased by 29.2% to £16.8 million in the financial year ended 27 February 2016. Return on equity increased to 27.9% in the financial year ended 27 February 2016 from 21.5% in the financial year ended 28 February 2015.

·    Well placed to capitalise on consolidation opportunities created by regulatory change - Regulatory responsibility for UK HCC was transferred from the OFT to the FCA in April 2014, resulting in additional regulatory requirements and increased barriers to entry to the Company's market. The Directors believe that some smaller UK HCC lenders are not, or will not be, in a position to comply with the FCA requirements and may seek to exit the market, giving rise to consolidation opportunities. In the financial year ended 27 February 2016, the Company completed eight transactions, acquiring loan books with an aggregate gross receivables value of £11.3 million.

·    Highly invested IT platform - Significant investment in IT has resulted in an IT platform that the Directors believe can support the long term development of the business.

·    Strategic growth initiatives - Building on its track record of project delivery and the investment in its technology platform, the Company has developed a roadmap of strategic initiatives that will underpin the next stage of growth including the Morses Club Card, Remote Collect & Lend, Banking-Lite, Online Lending and Mobile Wallet.

·    Profitable, cash generative business model that is expected to be able to support an attractive level of dividends - The Board intends to distribute the majority of adjusted earnings to shareholders as dividend.

·    High levels of customer satisfaction - The Company takes a proactive approach to customer management and has performed strongly in independent customer satisfaction surveys, consistently achieving satisfaction rates of at least 95%.

Paul Smith, Chief Executive of Morses Club commented:

"The Home Collected Credit market is rapidly evolving, both because of regulatory change, which we believe will drive consolidation opportunities, but also because of the rapid digitalisation and modernising of our product and service offering. Morses Club is at the forefront of responding to these new market dynamics. Becoming a public company will enhance our ability to deliver on these opportunities and so help us to maximise growth and returns to our new shareholders."

Stephen Karle, non-Executive Chairman of Morses Club, commented:

"The positive reception we have had from investors and the interest they have shown in the Home Collected Credit market has been very encouraging. We are excited about becoming a listed company and embarking upon this next stage in our corporate evolution. I want to thank our new shareholders for their support and I am confident that we will be able to continue to grow Morses Club's position in this attractive market segment."

To view the Company's Admission Document, please visit www.morsesclub.com.

Enquiries

Morses Club PLC

 

Paul Smith, Chief Executive Officer

Tel: +44 (0) 330 045 0719

Andy Thomson, Chief Financial Officer

 

 

 

Numis Securities Limited

(Nominated Adviser, Joint Bookrunner & Joint Broker)

 

Andrew Holloway, Charlie Farquhar, Paul Gillam, Hugo Rubinstein

Tel: +44 (0) 20 7260 1000

 

 

 

 

Panmure Gordon (UK) Limited

(Joint Bookrunner & Joint Broker)

 

Richard Gray, Fred Walsh, Charles Leigh-Pemberton, Fabien Holler

Tel: +44 (0) 20 7886 2500

 

 

Deloitte Corporate Finance

(Financial Adviser to the Company)

 

Chris Nicholls, John Ball, Craig Lukins

Tel: +44 (0) 20 7936 3000

 

 

 

 

 
     

Media enquiries:

CNC Communications

 

Nick Bastin, Simon Evans

Tel: +44 (0) 20 3219 8800

 

 

Notes to Editors:

Except where the context otherwise requires, defined terms used in these notes to editors and this announcement have the meanings given to such terms in the Admission Document published by the Company and dated 29 April 2016.

Group overview

The Company is the second largest UK HCC lender with approximately 200,000 customers nationwide and a management team with significant experience in UK HCC and consumer finance. It has a national footprint with approximately 1,840 agents across 100 locations throughout the UK.

The Company markets a range of loan products through a combination of traditional and online marketing channels. A significant majority of the Company's customers are repeat customers, and the Company enjoys consistently high customer satisfaction scores.

UK HCC is now regulated by the FCA following recent regulatory changes, and the Company has been granted an interim permission for the period during which its application for full authorisation is being considered. The Directors believe that the Company complies with all material relevant legislation, secondary legislation, regulation and practice applicable to UK HCC lenders. The recent regulatory changes have provided impetus for consolidation in the sector and the Directors believe that the Company is well placed to capitalise on these opportunities.

The Company's profitable and cash generative business model, supported by prudent credit control, has provided it with opportunities for organic growth through strategic growth initiatives and territory builds as well as growth through loan book acquisitions. The Company acquired eight loan books during the financial year ended 27 February 2016 and is actively seeking further acquisition opportunities.

Significant investment in IT has resulted in an IT platform that the Directors believe provides the Company with the ability to meet the challenge of future growth opportunities. It has leveraged strategic relationships with IT suppliers to reduce the IT cost base and accelerate implementation.

Key strengths

Strong management team with deep sector knowledge

The existing management of the Company has significant experience in UK HCC. Paul Smith, the Chief Executive Officer, joined the Company in October 2014 and has been responsible for leading the Company's growth, both organically through the implementation of new initiatives and by way of acquisition. Prior to this, he was the managing director of E.Z. Pay Limited, a prepaid Mastercard organisation. The Company's Chief Financial Officer, Andy Thomson, joined the Company in 2009 and played a pivotal role in the Selling Shareholder's acquisition of both Morses Club and SFS, and the subsequent integration of the two businesses.

The Directors are supported by an experienced management team, in particular by the Director of operations, a former agent of the Company with over thirty years' experience in UK HCC, and the Director of IT and Business Change, who has over fifteen years of experience in the home collected credit market gained both with Morses Club and at one of the Company's major competitors. The Directors and management team have a strong understanding of UK HCC, its customers and agents, which the Directors believe has contributed to the Company's increasing profitability, its ability to attract new agents to the business and the development of strategic growth initiatives.

Highly invested IT platform

The Company has invested significantly in order to develop an IT platform that the Directors believe can support the long-term development of the business. The Company has established strategic relationships with external IT specialists to provide software and services that enhance the Company's IT capability. The Company outsources application development, data centre hosting and support, and maintenance of its strategic core lending platform (''CAP''). This strategy aims to capitalise on proven technology, minimise the IT cost base and accelerate the implementation of the Company's strategic growth initiatives. The Directors believe that the Company's progressive approach to technology is a key strength relative to other market participants. Recent investment in IT has enabled the following developments:

·    Mobility platform - The Company has deployed Samsung Galaxy tablets, together with a collections monitoring application, to all of its staff and agents. The platform, which was built and is supported by IBM, automates processes that were previously documented on paper. This has improved efficiency in the field and enhanced the Company's regulatory compliance. The roll-out of tablets to staff and agents was completed less than one year after approval of the design outline. It is anticipated that, over time, enhancements to this platform will allow the Company to further minimise the use of paper in its field operations.

·    Customer portal and mobile application - The Company's customer portal and mobile application have been developed to support the Morses Club Card product. They also provide a platform for the Company to provide enhanced products and services for customers in the future, including targeted vouchers and offers from retailers.

·    Data warehouse - The Company's recently implemented data warehouse provides a platform for consolidating data from various information sources across the business. The Directors believe this will provide enhanced management information and analytical capability.

The Company's investment in IT infrastructure supports its underwriting controls and the scalability of its business. This investment has resulted in increased automation, reduced overheads, increased agent productivity and more efficient compliance processes.

Strategic initiatives to ''future proof'' the business

Building on its track record of project delivery and the investment in its technology platform, the Company has developed a roadmap of strategic initiatives that will underpin the next stage of growth. The current pipeline of new products being developed by the Company includes the Morses Club Card, Remote Collect & Lend, Banking-Lite, Online Lending and Mobile Wallet.

In addition, the Company expects to continue to develop already established initiatives (namely, the customer portal, data warehouse and agent mobility solution) to improve the effectiveness and efficiency of the field operations and agent-to-customer experience.

Well placed to capitalise on consolidation opportunities created by regulatory change

Regulatory responsibility for UK HCC was transferred from the OFT to the FCA in April 2014, resulting in additional regulatory requirements and hence increased barriers to entry to the market. The Directors believe that some smaller UK HCC lenders are not, or will not be, in a position to comply with the FCA requirements and may seek to exit the market, giving rise to consolidation opportunities. This is illustrated by the fact that membership of the CCA has reduced by approximately 130 lenders to just over 400 lenders since regulatory responsibility for UK HCC was transferred to the FCA.

The Directors believe that the Company is well placed to capitalise on sector consolidation opportunities. The Company has developed a standardised and efficient process for sourcing, executing and integrating the acquisition of loan books. The Company typically completes acquisitions approximately 8 to 12 weeks after signature of an NDA. The integration process, which comprises IT systems' migration, financial integration and onboarding of any employees and agents into the Company's operations also follows established processes. In the financial year ended 27 February 2016, the Company completed eight transactions, acquiring loan books with an aggregate gross receivables value of £11.3 million.

Strong basis for organic growth

The Company is focused on the delivery of organic growth through traditional and online marketing methods, territory builds and strategic initiatives. Traditional marketing methods include leaflet drops, refer-a-friend campaigns and brokers or affiliates. They are supplemented by an increasing emphasis on online marketing channels. The Company now has both mobile and web applications available and utilises pay-per-click, affiliate and search engine optimisation. The Company analyses marketing efficiency on an ongoing basis and uses this information to optimise marketing spend. A territory build is when an agent or business manager joins the Company from another organisation, and uses their local knowledge to build a book of customers under the Company's brand. The Directors believe that territory builds are a source of high quality loan books and repeat customers, and that they are a low cost means of customer acquisition. The Company launched 107 such territory builds in the financial year ended 27 February 2016 (resulting in the addition of 8,263 new customers with an average collection to terms of 92.4%). The Company anticipates a further 200 territory builds to launch during the financial year ending 25 February 2017. Based on unaudited management accounts and excluding acquisitions, like-for-like credit issued increased by 7% for the 13 weeks to 26 December 2015, demonstrating strong organic growth.

Prudent credit control and high return lending

The Directors believe that the Company has developed a prudent credit policy which has been rolled out across the business following the integration of Shopacheck Financial Services and which is applied to all acquired loan books. This has contributed to the improvement in the Company's impairment rates and profitability. The Company's impairment/revenue ratio improved from 25.5% in the financial year ended 28 February 2015 to 20.8% in the financial year ended 27 February 2016. The Company's adjusted profit before tax increased by 29.2% from £13.0 million in the financial year ended 28 February 2015 to £16.8 million in the financial year ended 27 February 2016. Return on equity increased to 27.9% in the financial year ended 27 February 2016 from 21.5% in the financial year ended 28 February 2015.

The Company's credit policy also led to the reduction of average loan duration from approximately 48 weeks in the financial year ended 28 February 2015 to approximately 45 weeks in the financial year ended 27 February 2016, resulting in higher cash and revenue yields. The Company has seen increased demand for its new 20 week product, and the Directors expect this to contribute to the average loan duration decreasing towards 40 weeks over time.

Profitable, cash generative business model that is expected to be able to support a progressive dividend policy

The Company has a profitable and cash generative business model. This is expected to support the Company's ability to pay an attractive level of dividend.

To date the Company's loan book has been largely funded by equity; as at 27 February 2016, the Company had approximately £9 million of debt. The Directors consider there is the potential to increase leverage to enhance the Company's return on equity, accelerate growth in its loan book and deliver enhanced shareholder returns.

High levels of customer satisfaction 

Customers are at the heart of the Company's culture, vision and values. The Company takes a proactive approach to customer management, ensuring that staff and agents are appropriately trained. Customer satisfaction is independently measured on a monthly basis, and the Company has performed strongly in these surveys, consistently achieving satisfaction rates of at least 95%. The Directors believe that the Company's focus on customer service is key to promoting customer loyalty and high rates of repeat lending, as well as providing a foundation for the successful launch of new products and services.

Current trading and prospects

The Company has continued to perform in line with management's expectations in the period since 27 February 2016. Based on unaudited management accounts, credit issued for the thirteen weeks ended 26 March 2016 was 20% higher compared with the corresponding period in the prior year. Excluding acquisitions, like-for-like credit issued increased by 12% for the thirteen weeks ended 26 March 2016, demonstrating strong organic growth.

The Company has made further progress in executing its consolidation strategy and on 18 April 2016 agreed the acquisition of a loan book comprising £1.9million of gross receivables. The Company continues to actively review a pipeline of further acquisition opportunities. Management has also made good progress in advancing new product initiatives; to date the Company has issued approximately 1,000 loans via the Morses Club Card.

As discussed in greater detail in the Admission Document, the Company submitted its application for full FCA authorisation on 19 June 2015. The Board believes there to be no outstanding issues in respect of its application.

Summary Financial Information

(£m)

Financial year ended 28 February 2015

 

Financial year ended 27 February 2016

 

 

 

 

Credit issued

112.0

 

122.2

Revenue

89.9

 

90.6

Adj. operating profit

15.6

 

18.5

Adj. profit before tax

13.0

 

16.8

Adj. profit after tax

10.3

 

13.3

Impairment (% of revenue)

25.5

 

20.8

 

 

 

 

Year-end net receivables

55.5

 

56.8

Average net receivables

N/A1

 

56.1

Adj. net debt

6.4

 

5.2

 

 

 

 

Year-end customer numbers

198,171

 

198,727

 

1. Average net receivables not available for the financial year ended 28 February 2015 due to lack of comparable data under IFRS

Dividend Policy

The Directors will assess dividend payments in the context of consolidation opportunities, new product investment requirements and the broader growth strategy of the Company. The Board intends to distribute the majority of adjusted earnings to shareholders as dividends. In due course, the Board may also consider increasing the dividend payout ratio should the funding structure of the Company enable an increase in gearing.

Reasons for Admission to AIM

The Directors believe that Admission will be an important step in the Group's development and will assist the growth of the business. In addition to broadening the Group's shareholder base, admission to trading on AIM gives the Company the capacity, if required, to raise capital from the equity market or issue shares as consideration to support its strategic objectives as suitable opportunities arise. The Directors believe that Admission will further strengthen the Company's brand and profile and allow the Company to utilise share incentive schemes to attract and incentivise key management.

Lock-in and orderly market arrangements

Following the Placing and Admission, the Directors will in aggregate be interested in 6,629,374 issued Ordinary Shares which will represent approximately 5.1% of the Issued Share Capital of the Company.

Stephen Karle, Paul Smith and Andy Thomson, in respect of themselves and each of their connected persons, have undertaken to the Company, Numis and Panmure Gordon that, except in limited circumstances, they will not dispose of their respective interests in the share capital of the Company during the period of twelve months from Admission. Such Directors have further undertaken, in respect of themselves and each of their connected persons, that for a further period of twelve months thereafter they will (subject to limited exceptions) deal or otherwise dispose of any such interest through Numis and Panmure Gordon.

Following the Placing and Admission, the Selling Shareholder will in aggregate be interested in 66,045,000 issued Ordinary Shares which will represent approximately 51.0% of the Issued Share Capital of the Company, Jamie Constable will in aggregate be interested in 66,045,000 issued Ordinary Shares which will represent approximately 51.0% of the Issued Share Capital of the Company (indirectly through his shareholding in FCAP Four Limited) and FCAP Four Limited will in aggregate be interested in 66,045,000 issued Ordinary Shares which will represent approximately 51.0% of the Issued Share Capital of the Company (indirectly through its shareholding in the Selling Shareholder).

Each of the Selling Shareholder, Jamie Constable and FCAP Four Limited respectively, in respect of itself and each of its connected persons, has undertaken to the Company, Numis and Panmure Gordon that, except in limited circumstances, they will not dispose of their respective interests in the share capital of the Company during the period of six months from Admission. Such persons have further undertaken, in respect of themselves and each of their connected persons, that for a further period of six months thereafter they will comply with certain restrictions in relation to any disposal of any such interests other than through Numis and Panmure Gordon.

Relationship Deed

The Selling Shareholder, along with FCAP Four Limited and Jamie Constable, has entered into the Relationship Deed. The Relationship Deed contains provisions to ensure that, inter alia, there is no interference with the independent operation of the Board and that the Company's transactions with the Selling Shareholder, FCAP Four Limited and Jamie Constable (and their respective associates, including family members) respectively are effected at arm's length and on a normal commercial basis.

Timetable

Publication of Admission Document

29 April 2016

Admission and commencement of dealings in the Ordinary Shares on AIM

5 May 2016

Delivery of Ordinary Shares in CREST accounts

5 May 2016

Despatch of definitive share certificates

By 19 May 2016

Board of Directors

The Board currently comprises two Executive Directors and five Non-Executive Directors. Brief biographies are set out below.

·    Stephen Ashley Karle (aged 56) - Independent Non-Executive Chairman

Stephen Karle was appointed to the Board on 20 January 2015 and is the Chairman of the board. He has a wide range of financial services experience and is a director of Karle & McCleery Limited, a strategic advice and executive business coaching company operating cross a wide range of business sectors. He was, until recently, Chairman of BCRS Business Loans, a small business loans company supporting regional business growth. He is a former CEO of West Bromwich Building Society.

·    Paul Mark Smith (aged 49) - Chief Executive Officer

Paul Smith joined the Company in October 2014. He was appointed to the Board on 20 January 2015 and has been responsible for growing the Company by acquisition and organically. He has experience in mobile payment technology as Managing Director of E.Z. Pay Limited, a prepaid MasterCard organisation, from 2009 to 2012 prior to its sale to BC Partners. He started his career in the global software market before joining Phones 4U Group in 1998, where he became MD and was an integral part of the management team until its sale for £1.4 billion in 2006.

·    Thomas Andrew (Andy) Thomson (aged 54) - Chief Financial Officer

Andy Thomson joined the Company in 2009 and was appointed to the Selling Shareholder's board of directors in June 2009 and since that date he has overseen the Company's finance function. He was appointed to the Board on 1 March 2015. He is a qualified Chartered Management Accountant and has led finance teams at a number of SME's since 1996. He has had public company experience with roles at Morgan Sindall, Tesco and Cadbury Schweppes. He has extensive experience in Commercial, Legal, Internal Audit, Insolvency and IT. He played a pivotal role in the acquisition and integration of both Morses Club and Shopacheck Financial Services.

·    Joanne Carolyn Lake (aged 52) - Independent Non-Executive Director

Joanne Lake was appointed to the Board on 14 April 2016 (conditional on Admission). She has over 30 years' experience in accountancy and investment banking primarily with Panmure Gordon, Evolution Securities, Williams de Broe and Price Waterhouse. She is Deputy Chairman of Mattioli Woods plc, a wealth management and employee benefits firm, and Main Market listed Henry Boot plc and is also a non-executive director of Gateley (Holdings) plc. She was also a non-executive director of CIT Bank Limited.

·    Sir Nigel Knowles (aged 60) - Independent Non-Executive Director

Sir Nigel Knowles was appointed to the Board on 14 April 2016 (conditional on Admission). He was previously Global Co-Chairman and prior to that Global Co-CEO and Managing Partner for nearly twenty years of DLA Piper, one of the world's largest global business law firms with a turnover in excess of USD2.5 billion.

·    Patrick Desmond Storey (aged 58) - Independent Non-Executive Director

Patrick Storey was appointed to the Board on 14 April 2016 (conditional on Admission). He is a Chartered Accountant and founding member and Senior Partner of Grant Thornton's financial services group and head of its regulatory team. He has 30 years' experience with Grant Thornton working in the financial services sector, specialising in governance and the practical implications of regulations for banks, lenders and other financial institutions.

·    Peter Martin Ward (aged 56) - Non-Executive Director

Peter Ward was appointed to the Board on 1 March 2015. He is the co-founder of Rcapital Partners LLP. In 2001, he co-founded his own corporate advisory business, Three V Corporate Venturing LLP to provide fundraising and interim management services. Prior to this he held senior management positions within the UK Commercial and Corporate Banking division of Natwest / Royal Bank of Scotland group for 23 years.

 

IMPORTANT NOTICE

This announcement is not an offer of securities for sale in the United States or any other jurisdiction.

This announcement is not a prospectus for the purposes of the Prospectus Rules issued by the FCA. The Placing will be exempt from the requirement to produce an approved prospectus and accordingly no such prospectus will be prepared in connection with the Placing.

Investors should not purchase any shares referred to in this announcement except on the basis of information contained in the Admission Document.

The information contained in this announcement is for information purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

The Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "US Securities Act"), or the securities laws of any other jurisdiction of the United States. The Shares may not be offered or sold, directly or indirectly, in or into the United States (except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the US Securities Act). No public offering of the Shares is being made in the United States. The Shares are being offered and sold only outside the United States in "offshore transactions" within the meaning of, and in reliance on, Regulation S under the US Securities Act ("Regulation S").

The Shares have not been approved or disapproved by the United States Securities and Exchange Commission, any state securities commission in the United States or any other regulatory authority in the United States, nor have any of the foregoing authorities passed on or endorsed the merits of the Placing or the accuracy or adequacy of the information contained in this announcement. Any representation to the contrary is a criminal offence in the United States.

The securities referred to herein have not been registered under the applicable securities laws of Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered or sold within Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa or to any national, resident or citizen of Australia, Canada, Japan, the Republic of Ireland or the Republic of South Africa.

This announcement does not constitute a recommendation concerning the Placing. The price and value of securities and any income from them can go down as well as up. Past performance is not a guide to future performance. There is no guarantee that Admission will occur and you should not base your financial decisions on the Group's intentions in relation to Admission at this stage. Potential investors should consult a professional adviser as to the suitability of the Placing.

The distribution of this announcement outside the UK may be restricted by law. No action has been taken by the Company, Numis or Panmure Gordon that would permit a public offer of Shares in any jurisdiction outside the UK or possession of this announcement where action for that purpose is required. Persons outside the UK who come into possession of this announcement should inform themselves about the distribution of this announcement in their particular jurisdiction. Failure to comply with those restrictions may constitute a violation of the securities laws of such jurisdiction.

This announcement is directed only at persons whose ordinary activities involve them in acquiring, holding, managing and disposing of investments (as principal or agent) for the purposes of their business and who have professional experience in matters relating to investments and are: (i) if in a member state of the European Economic Area, qualified investors within the meaning of article 2(1)(e) of the Prospectus Directive ("Qualified Investors"); or (ii) if in the United Kingdom, Qualified Investors and fall within: (a) article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); or (b) article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Order (all such persons together being referred to as "Relevant Persons"). The term "Prospectus Directive" means Directive 2003/71/EC as amended and includes any relevant implementing measures in each member state of the European Economic Area.

This announcement must not be acted on or relied on by persons who are not Relevant Persons. Persons distributing this announcement must satisfy themselves that it is lawful to do so. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. This announcement does not itself constitute an offer for sale or subscription of any securities in the Company.

Numis Securities Limited ("Numis") is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA') and is advising the Company and no one else in connection with the placing and the Company's admission to AIM ("Admission') (whether or not a recipient of this announcement), and is acting exclusively for the Company as nominated adviser and broker for the purpose of the AIM Rules for Companies.

Pamure Gordon (UK) Limited ("Panmure Gordon") is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA') and is advising the Company and no one else in connection with the placing and the Company's admission to AIM ("Admission') (whether or not a recipient of this announcement), and is acting exclusively for the Company as broker for the purpose of the AIM Rules for Companies.

Deloitte Corporate Finance is a division of Deloitte LLP ("Deloitte") which is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA') and is advising the Company and no one else in connection with the placing and the Company's admission to AIM ("Admission') (whether or not a recipient of this announcement), and is acting exclusively for the Company as financial adviser.

Neither Numis, Panmure Gordon nor Deloitte will be responsible to any person other than the Company for providing the protections afforded to its customers, nor for providing advice in relation to the placing and Admission or the contents of this announcement. In particular, the information contained in this announcement has been prepared solely for the purposes of the placing and Admission and is not intended to inform or be relied upon by any subsequent purchasers of ordinary shares (whether on or off exchange) and accordingly no duty of care is accepted in relation to them. Without limiting the statutory rights of any person to whom this announcement is issued, no representation or warranty, express or implied, is made by Numis, Panmure Gordon or Deloitte as to the contents of this announcement. No liability whatsoever is accepted by Numis, Panmure Gordon or Deloitte for the accuracy of any information or opinions contained in this announcement, for which the directors of the Company are solely responsible, or for the omission of any information from this announcement for which it is not responsible.

FORWARD-LOOKING STATEMENTS

This announcement contains forward looking statements relating to the Company's future prospects, developments and strategies, which have been made after due and careful enquiry and are based on the directors of the Company's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Forward-looking statements are identified by their use of terms and phrases such as "believe", "could", "envisage", "estimate", "intend", "may", "plan", "will" or the negative of those, variations or comparable expressions, including references to assumptions. The directors of the Company believe that the expectations reflected in these statements are reasonable, but may be affected by a number of variables which could cause actual results or trends to differ materially. Each forward-looking statement speaks only as of the date of the particular statement.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.