REG - MHA PLC - First Day of Dealings on AIM
15/04/2025 07:15
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RNS Number : 9815E MHA PLC 15 April 2025
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15 April 2025
MHA plc
("MHA", the "Company" and together with its subsidiaries the "Group")
First Day of Dealings on AIM
MHA (AIM: MHA), a leading professional services provider of audit and
assurance, tax, accountancy and advisory services, is pleased to announce the
admission of its entire issued ordinary share capital to trading on AIM, a
market operated by the London Stock Exchange plc ("Admission").
Admission will take place, and dealings in the Company's ordinary shares of 1
pence each ("Ordinary Shares") will commence, at 8.00 a.m. today under the
ticker 'MHA'. The ISIN of the Ordinary Shares is GB00BV0VHK88, the SEDOL of
the Ordinary Shares is BV0VHK8 and the Company's LEI number is
6488GWOR8UO490L88275.
In conjunction with Admission, aggregate gross proceeds of approximately £98
million have successfully been raised by way of a placing with institutional
and other investors of 95,800,000 new Ordinary Shares (the "Placing") and a
retail offer of 2,211,779 new Ordinary Shares, at a price of 100 pence per
Ordinary Share (the "Placing Price").
Cavendish Capital Markets Limited ("Cavendish") is acting as nominated
adviser, bookrunner and broker to the Company.
Geoff Barnes, Chair of MHA, commented:
"MHA is a successful and growing business, underpinned by a long-standing
commitment to exceptional client service, sustained investment in top talent
and technology, and a disciplined approach to strategic acquisitions. Our
admission to the market marks the next exciting stage in our evolution.
To have delivered such a strong fundraising outcome in the face of recent
market volatility speaks to the quality of the business, the support of a
highly engaged institutional investor base, and the determination of our
management team and advisers, led by Cavendish.
Against a backdrop of rising demand for high-quality advisory services and
increasing regulatory complexity, we believe we are well placed to build on
the strong momentum we have established in recent years. Admission gives us
the ideal platform to strengthen our market position and broaden our
capabilities, enabling us to scale at pace and drive further innovation while
continuing to deliver the high standards our clients expect. Importantly, it
also allows us to offer equity participation to future partners and leaders,
ensuring they share directly in the firm's ongoing success.
We are proud of what we have achieved so far, but we see even greater
opportunity ahead. Together with our partners and new investors, and united by
a shared ambition to capitalise on that opportunity, we look forward to
shaping the next chapter of the Group's story as a public company, further
enhancing the service we provide to clients, and achieving our medium-term
goal of exceeding £500 million in annual revenues."
Transaction Highlights:
· The Placing received strong support from institutional and other
investors and raised gross proceeds of £95.8 million and the Retail Offer
raised gross proceeds of approximately £2.2 million.
· The market capitalisation of the Company will be approximately £271 million
on Admission. The Company has 271,211,764 Ordinary Shares in issue and a free
float of approximately 36.1 per cent.
· The net proceeds of the Placing and Retail Offer will enable the Company to:
o invest in technology to accelerate growth, including AI, driving
efficiencies within data collection and analysis;
o repay the Loan Notes to effect the release of capital by 19 Retiree
Capital Partners, as well as certain continuing Partners; and
o support further bolt-on acquisition opportunities
· The Company's admission document is available for viewing
at https://www.mha.co.uk/ (https://www.mha.co.uk/) .
Company Highlights:
· Market Position: In 2023, MHA was the 13(th) largest accountancy firm in the
UK by revenue and the joint fastest-growing UK accountancy firm of the top 20
largest firms(1).
· Growth Ambition: The Group has a medium-term aspiration to become a top 10 UK
accounting and professional services business, targeting annual revenues
exceeding £500 million.
· M&A Track Record: MHA has successfully executed multiple acquisitions,
including its largest to date undertaken in April 2024, Moore and Smalley,
which generated £30.4 million in revenue in FY24 and added approximately 400
employees to the Group. The Directors believe the fragmented UK accountancy
market presents opportunities for further bolt-on strategic acquisitions.
Furthermore, MHA is exploring potential cross-border acquisitions, which may
include other members of the Baker Tilly International Network ("BTI
Network").
· Financial Performance: In the ten years to FY24, the Group has delivered a
compound annual revenue growth rate ("CAGR") of 13.7%, with 87% recurring
revenue in FY24. Since 2016, revenue per Partner has grown more than 2.5x,
from £0.6 million to £1.6 million in 2024.
· Regulatory Tailwinds: The increasing complexity of financial reporting and
auditing standards, and the volume of regulation facing its clients have,
among other factors, supported a 224% increase in MHA's average fees from its
top 10 clients over the past five years. The Directors believe favourable
regulatory drivers and the withdrawal of many firms from the public company
audit market will present opportunities for MHA to grow market share and
achieve its growth ambition.
· International Network: MHA is the UK and Ireland's representative of the BTI
Network, a major global network of independent accountancy and business
advisory firms spanning 143 territories and generating approximately $5.62
billion in annual revenue. MHA trades under its own brand in the UK, and
leverages the Baker Tilly brand and internationally recognised experts for
business referrals and cross-border projects.
(1) www.accountancytoday.co.uk/top-30-accountancy-firms-uk-2023-2024
(http://www.accountancytoday.co.uk/top-30-accountancy-firms-uk-2023-2024)
Unless otherwise stated, defined terms in this announcement have the same
meaning as those in the admission document published by the Company on 10
April 2025.
Contacts:
MHA www.mha.co.uk (http://www.mha.co.uk/)
Rakesh Shaunak, Chief Executive Officer via Alma
Steven Moore, Chief Financial Officer
Cavendish Capital Markets Limited (Nominated Adviser & Broker)
Stephen Keys, Callum Davidson, Katy Birkin, Dan Hodkinson (Corporate Finance) +44 (0)20 7220 0500
Michael Johnson (Sales)
Tim Redfern, Sunila de Silva (ECM)
Alma Strategic Communications mha@almastrategic.com (mailto:mha@almastrategic.com)
Andrew Jaques, Josh Royston, Hilary Buchanan, David Ison, Will Ellis Hancock, +44 (0)20 3405 0205
Sarah Peters
About MHA
Founded in 1869, MHA is a leading professional services provider of audit and
assurance, tax, accountancy and advisory services, based in the UK with an
international presence.
MHA employs more than 1,800 people and has 160 Partners (including 10 retiree
Partners), across its network of 23 offices, mostly in the UK as well as in
Ireland and the Cayman Islands.
MHA is the UK and Ireland's representative of the BTI Network.
Business Overview
The Group's services are described below within four divisions:
Audit and Assurance Division
Audit and Assurance is the Group's primary service line. Core services within
this division include external audit, financial reporting, governance, risk
and compliance and grant and royalty audit. Clients comprise mostly private
SME businesses as well as listed companies across multiple sectors. In FY24,
the Audit and Assurance division contributed approximately 52% of the Group's
total revenue, with the majority derived from audit services.
Tax Division
The Group offers a range of tax services for businesses and individuals, with
expertise in both domestic and international tax compliance and advice. In
FY24, the Tax division contributed approximately 19% of the Group's total
revenue.
Accounting and Business Advisory Division
The Group provides a range of accountancy, business advisory and outsourcing
services including corporate finance, restructure and recovery, corporate
forensic accounting, HR solutions, payroll, bookkeeping and cloud accounting.
In FY24, the Accounting and Business Advisory division contributed
approximately 27% of the Group's total revenue.
Wealth Management Division
Wealth management is a more recently established service line and was
introduced in its current form through the acquisition of Cave & Sons, a
Northampton based financial adviser, in April 2022. In FY24, the Wealth
Management division contributed approximately 2% of the Group's total revenue
and in April 2024 the Company acquired a wealth management business with the
wider acquisition of Northwest based Moore and Smalley.
Current Trading and Prospects
Since the six-month period ended 30 September 2024, the Group has continued to
trade in line with the Directors' expectations both as regards revenue growth
and operating margins. During this time, the Group has also actively
progressed the integration of the acquisitions made in H125 and continues to
assess new acquisition opportunities.
The last quarter of each financial year is traditionally the most active for
the Group, as many corporate clients move into their annual audit cycle and
tax clients filing and payment deadlines arise. These revenues are expected to
have built on the Group's strong operational performance in the first nine
months of the year.
Given the positive trading performance to date and their assessment of the
strength of the Group's growth strategy, transaction pipeline and proven
business model, based on organic and selective acquisitive growth, the
Directors have confidence in the Group's results for the financial year ended
31 March 2025 and for its prospects beyond.
Dividend policy
The Directors expect the Group to continue to be highly cash-generative
following Admission and believe that the Company will be well placed to pay a
regular and progressive dividend to Shareholders. The Directors intend to
adopt a dividend policy that reflects the long-term earnings and cashflow
potential of the Group. Following Admission, the Directors anticipate that the
Company will initially adopt a payout ratio of 50 per cent. of the Group's net
profit after tax. The Directors intend to pay quarterly dividends, with the
first payment expected in December 2025 (i.e. during the third quarter of
FY26).
Board of Directors
Executive Directors
Rakesh Shaunak - Chief Executive Officer
Rakesh currently serves as the Managing Partner and Chairman of MHA and will
be Chief Executive Officer of MHA from Admission. He is also a Senior Director
at Baker Tilly International, where MHA is a UK member. Rakesh is a qualified
Chartered Accountant, having trained with a top five firm, and is a member of
the Chartered Institute of Taxation. His expertise includes business advisory
services, with a significant portfolio of corporate clients. As an Audit
Partner, he oversees several of MHA's PIE audits, including those of
international banks and listed companies. Additionally, Rakesh is a
non-executive director of Glenstone REIT plc and was formerly Chairman of the
Audit and Risk Committee at the Chartered Institute of Taxation.
Steven Moore - Chief Financial Officer
Steven qualified with MHA and became a partner in 1989. He has been a member
of the Board since 2011 with responsibility for the Group's finances and will
continue as Chief Financial Officer from Admission. He has worked closely with
Rakesh on the Board for the past 13 years and leads on the mergers and
acquisitions across the Group. He is Regional Chair of the Central, Midlands
and Welsh regions. Steven has a client facing role specialising in the
professional practices sector. He is a qualified Chartered Accountant and an
audit Registered Individual. His experience includes providing business
advisory services to mid to large privately owned businesses and subsidiaries
of foreign parents.
Non-executive Directors
Geoffrey Barnes - Non-executive Chairman
Geoff formerly served as the executive Chairman of Casson Beckman, a leading
mid-tier accountancy and professional services business, and was instrumental
in the firm's merger with Baker Tilly in 1997. He later led Baker Tilly
International's global growth as CEO, expanding the network and growing
revenues to $3.8 billion by the time of his retirement in 2016. He was also
previously Chairman of the International Advisory Panel at the Institute of
Chartered Accountants in England and Wales ("ICAEW"), as well as a former
member of the ICAEW governing council. Geoff currently serves as the
non-executive Chairman of the Supervisory Board at Baker Tilly South East
Europe Ltd (a non-statutory position) and as the senior non-executive director
and Chairman of the Audit Committee at AIM-quoted CML Microsystems Plc.
Linda Main - Independent Non-executive Director
Linda is an experienced non-executive Director with considerable board
experience and expertise in corporate governance structures and risk across a
diverse range of businesses. Linda was previously a partner of KPMG LLP, where
she led its equity capital markets advisory group. She was a board member of
KPMG between 2018 to 2023, as well as chair of its risk committee. Since 2024,
she has been a board member of the Quoted Companies Alliance as well as
non-executive Director of an AIM quoted company in the energy sector. She is
also currently a partner at Gara Strategic Advisory, an advisory firm focused
on supporting companies considering an IPO.
Sir Robert ("Bob") Neill KC - Independent Non-executive Director
Sir Bob is an experienced leader, Chairman, and policy expert with a track
record in governance, law, and public affairs and was a practising British
criminal law barrister, specialising in criminal and complex fraud cases with
a regulatory focus, from 1975 to 2008. In 2006, Sir Bob was elected as the
Member of Parliament for Bromley and Chislehurst, serving until 2024. During
his tenure, he held several significant positions, including Parliamentary
Under-Secretary of State for London, Local Government, and Planning at the
Department for Communities and Local Government from May 2010 to September
2012 and Chair of the Justice Select Committee for the House of Commons from
June 2015 to May 2024, where he was an advocate for the criminal justice
system and legal aid. From 2002 to 2006, Sir Bob was a non-executive Director
for the Northeast London Strategic Health Authority and a Member of the London
Assembly from 2000 to 2008. In recognition of his public service, Sir Bob was
knighted in the 2020 New Year Honours and was appointed an Honorary King's
Counsel in January 2024 for his contribution to political service. As well as
having a track record of supporting and building teams from diverse
backgrounds to deliver exceptional results, Sir Bob has a law degree from the
London School of Economics and Political Science and is a Fellow of the Royal
Society of Arts.
The Company announced the launch of the Retail Offer via Bookbuild on 10 April
2025. Following the close of the Retail Offer on 14 April 2025, the Company
notes the following updates to the percentages held following Admission in the
tables and disclosures published in its Admission Document dated 10 April
2025, as a result of the dilution from the Retail Offer.
DIRECTORS' SHAREHOLDINGS AND OTHER INTERESTS
Name Number of Existing Ordinary Shares Percentage of Existing Ordinary Shares Number of Ordinary Shares immediately following Admission Percentage of enlarged share capital immediately following Admission* Number of Ordinary Shares under option immediately following Admission
Rakesh Shaunak 5,121,413 2.96% 5,121,413 1.89% 500,000
Steven Moore 4,548,233 2.63% 4,548,233 1.68% 350,000
Andrew Moyser 3,430,533 1.98% 3,430,533 1.26% -
Martin Herron 3,917,736 2.26% 3,917,736 1.44% -
Katherine Simon 2,742,718 1.58% 2,742,718 1.01% -
Graham Gordon* 3,086,625 1.78% 3,166,625 1.17% -
Geoffrey Barnes - - 10,000 0.00% -
Linda Main - - 10,000 0.00% -
Sir Robert Neill KC - - 10,000 0.00% -
Total 22,847,258 13.19% 22,957,258 8.46% 850,000
*includes shares held by persons closely associated
SIGNIFICANT SHAREHOLDERS AND OTHER INTERESTS
Immediately following the Fundraising and Admission
Significant Shareholder Number of Existing Ordinary Shares Percentage of Existing Share Capital Number of Ordinary Shares Percentage of enlarged share capital
Octopus Investments Limited - - 26,892,788 9.92%
EBT 26,000,000 15.0% 26,000,000 9.59%
Gresham House Asset Management Limited - - 20,000,000 7.37%
CONCERT PARTY POSITION AND RULE 9 IMPLICATIONS
Under paragraph (10) of the definition of "acting in concert" in the
Takeover Code, it is presumed (unless the contrary can be established) that a
concert party arises in relation to members of a partnership who sell their
shares in that company in consideration for the issue of new shares in a
company to which the Takeover Code applies, or who, following the
re-registration of that company as a public company in connection with an
initial public offering or otherwise, become shareholders in a company to
which the Takeover Code applies.
The Company has agreed with the Takeover Panel that all partners in MHA LLP
who become shareholders of the Company on Admission are regarded as acting in
concert with each other (the "Concert Party") in relation to the Company for
the purposes of paragraph (10) of the definition of "acting in concert" in the
Takeover Code.
Immediately following Admission, the Concert Party will be interested
(directly or indirectly) in approximately 54.4% ("Concert Party Voting Rights
Percentage") of the voting rights of the Company and given the Concert Party
Voting Rights Percentage represents more than 50% of voting rights in the
Company (for so long as they continue to be treated as acting in concert), the
Concert Party may accordingly increase their aggregate interests in their
shareholding without incurring any further obligation under Rule 9 of the
Takeover Code to make a general offer, although individual members of the
Concert Party or any sub-group of such concert party will not be able to
increase their percentage interest in shares through or between a Rule 9
threshold (to or through 30 per cent. of the voting rights or any increase
between (and including) 30 per cent but no more than 50% of the voting
rights) without Takeover Panel consent. If the Takeover Panel consent is not
obtained, the Concert Party will incur an obligation under Rule 9 of the
Takeover Code to make a general offer for all the outstanding shares in the
Company.
NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS DISCHARGING
MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY ASSOCIATED WITH THEM
1 Details of the person discharging managerial responsibilities / person closely
associated
a) Name Jaimee Moore
2 Reason for the notification
a) Position/status Person closely associated with Steve Moore, Chief Financial Officer
b) Initial notification/Amendment Initial notification
3 Details of the issuer, emission allowance market participant, auction
platform, auctioneer or auction monitor
a) Name MHA plc
b) LEI 6488GWOR8UO490L88275
4 Details of the transaction(s): section to be repeated for (i) each type of
instrument; (ii) each type of transaction; (iii) each date; and (iv) each
place where transactions have been conducted
a) Description of the financial instrument, type of instrument Ordinary shares of 1p each
Identification code GB00BV0VHK88
b) Nature of the transaction Purchase of Ordinary Shares
c) Price(s) and volumes(s) Price(s) Volume(s)
£1.00 20,000
d) Aggregated information
Aggregated volume N/A
Price N/A
e) Date of the transaction 14 April 2025
f) Place of the transaction Outside a trading venue
1 Details of the person discharging managerial responsibilities / person closely
associated
a) Name Claire Marie Gordon
2 Reason for the notification
a) Position/status Person closely associated with Graham Gordon, Partner and a PDMR
b) Initial notification/Amendment Initial notification
3 Details of the issuer, emission allowance market participant, auction
platform, auctioneer or auction monitor
a) Name MHA plc
b) LEI 6488GWOR8UO490L88275
4 Details of the transaction(s): section to be repeated for (i) each type of
instrument; (ii) each type of transaction; (iii) each date; and (iv) each
place where transactions have been conducted
a) Description of the financial instrument, type of instrument Ordinary shares of 1p each
Identification code GB00BV0VHK88
b) Nature of the transaction Purchase of Ordinary Shares
c) Price(s) and volumes(s) Price(s) Volume(s)
£1.00 80,000
d) Aggregated information
Aggregated volume N/A
Price N/A
e) Date of the transaction 14 April 2025
f) Place of the transaction Outside a trading venue
IMPORTANT NOTICES
The information contained in this announcement is for background purposes only
and does not purport to be full or complete. No reliance may be placed by any
person for any purpose on the information contained in this announcement or
its accuracy, fairness or completeness.
This announcement is for information purposes only and does not constitute an
offer to sell or issue or the solicitation of an offer to buy, acquire or
subscribe for shares in the capital of the Company in Canada, Australia, Japan
or the Republic of South Africa or any other jurisdiction where such offer or
solicitation may be restricted, unlawful or unauthorised. Any failure to
comply with these restrictions may constitute a violation of the securities
laws of such jurisdictions. Subject to certain exemptions, the securities
referred to herein may not be offered or sold in Canada, Australia, Japan, or
the Republic of South Africa or to, or for the account or benefit of any
national resident or citizen of Canada, Australia, Japan, or the Republic of
South Africa.
This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America. This announcement is not
an offer of securities for sale into the United States. The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the
United States, except pursuant to an applicable exemption from registration.
No public offering of securities is being made in the United States.
This announcement is addressed to and directed only at persons who are (a)
persons in member states of the European Economic Area who are "qualified
investors" within the meaning of Article 2(e) of the EU Prospectus Regulation
(Regulation (EU) No 2017/1129), or (b) persons in the United Kingdom who are
"qualified investors" within the meaning of Article 2(e) of the UK Prospectus
Regulation (Regulation (EU) No. 2017/1129, which is part of UK law by virtue
of the European Union (Withdrawal) Act 2018) (the "UK Prospectus Regulation"),
who (i) have professional experience in matters relating to investments and
fall within the definition of "investment professionals" in Article 19(5) of
the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005,
as amended (the "Order"), or (ii) are high net worth companies, unincorporated
associations or partnerships or trustees of high value trusts as described in
article 49(2) of the Order, or (c) persons to whom it may otherwise be lawful
to communicate it (all such persons together being referenced to as "relevant
persons"). Any investment in connection with the Placing will only be
available to, and will only be engaged with, relevant persons. Any person who
is not a relevant person should not act or rely on this announcement or any of
its contents.
Potential investors should not base their financial decision on this
announcement. Acquiring investments to which this announcement relates may
expose an investor to a significant risk of losing all of the amount invested.
Persons considering making investments should consult an authorised person
specialising in advising on such investments. The value of the Ordinary Shares
can decrease as well as increase.
This announcement contains statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements involve known
and unknown risks and uncertainties, many of which are beyond the Group's
control and all of which are based on the Directors' current beliefs and
expectations about future events. In some cases, these forward-looking
statements can be identified by the use of forward-looking terminology,
including, without limitation, the terms "anticipates", "believes", "could",
"envisages", "estimates", "expects", "intends", "may", "plans", "projects",
"should", "will" or, in each case, their negative or other variations or
comparable terminology. These forward-looking statements relate to matters
that are not historical facts. They include statements regarding the
intentions, beliefs and current expectations of the Company or the Directors
concerning, amongst other things, the results of operations, financial
condition, liquidity, prospects, growth and strategies of the Company and the
industry in which the Group operates. By their nature, forward-looking
statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future performance. The
actual results, performance or achievements of the Company or developments in
the industry in which the Group operates may differ materially from the future
results, performance or achievements or industry developments expressed or
implied by the forward-looking statements contained in this announcement.
These forward-looking statements and other statements contained in this
announcement regarding matters that are not historical facts involve
predictions. No assurance can be given that such future results will be
achieved; actual events or results may differ materially as a result of risks
and uncertainties facing the Group. Such risks and uncertainties could cause
actual results to vary materially from the future results indicated, expressed
or implied in such forward-looking statements.
Each of the Company and Cavendish, and their respective affiliates, expressly
disclaims any obligation or undertaking to update, review or revise any
forward-looking statements contained in this announcement and disclaims any
obligation to update its view of any risks or uncertainties described herein
or to publicly announce the results of any revisions to the forward-looking
statements made in this announcement, whether as a result of new information,
future developments or otherwise, except as required by law.
Nothing contained herein constitutes or should be construed as (i) investment,
tax, financial, accounting or legal advice, (ii) a representation that any
investment or strategy is suitable or appropriate to your individual
circumstances or (iii) a personal recommendation to you.
For the avoidance of doubt, the contents of the Group's website, or any
website directly or indirectly linked to the Group's website, are not
incorporated by reference into, and do not form part of, this announcement.
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