REG - Revolution Beauty Gp - Restoration of Trading

Revolution BeautyAnnouncement

28/06/2023 07:00

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RNS Number : 1190E  Revolution Beauty Group PLC  28 June 2023

 This announcement contains inside information for the purposes of Article 7 of
 the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
 by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
 disclosed in accordance with the Company's obligations under Article 17 of
 MAR.
 For immediate release  28 June 2023

 

 

REVOLUTION BEAUTY GROUP PLC

("Revolution Beauty", the "Group" or the "Company")

 

Shares to be restored to trading on AIM today

 

Confirmation of grant of share options

 

Update on hostile shareholder action

 

Revolution Beauty Group plc (AIM: REVB), the multi-channel mass beauty
innovator:

·      announces that its shares are due to be restored to trading on
AIM at 7.30 a.m. today;

·      provides an update on the position with boohoo Group plc
("boohoo") following the Company's annual general meeting ("AGM") which was
held yesterday, as previously announced; and

·      confirms the grant of share options disclosed in the Company's
annual report and accounts for the financial year to 28 February 2022, which
were published on 26 May 2023 (the "FY22 Accounts").

The board of Revolution Beauty ("Board") remains focussed on value creation at
this critical time for the Company, and continues to believe that boohoo's
hostile actions are value-destructive, opportunistic and self-serving, as well
as not being in the interests of the Company's shareholders as a whole.

 

Shares to re-commence trading on AIM today

 

The Company is delighted to confirm that, in conjunction with its Nominated
Adviser, it has requested that its shares be restored to trading on AIM at
7.30 a.m. today.

 

The Company's shares were suspended from trading on 1 September 2022, as the
FY22 Accounts were not capable of publication at that time.

 

The Group faced a series of material and well-publicised issues, as summarised
in prior announcements and in the Company's now-published FY22 Accounts. These
historical issues culminated in an independent investigation into the actions
of certain former directors and members of management and, as announced on 20
June 2023, in possible litigation against the Company's founder and former
CEO, who retains a stake of approximately 15.8% in the Company.

 

Revolution Beauty's Board and management team, supported by their exceptional
group of staff, have worked tirelessly for the last 10 months towards
resolving the historical issues which have resulted in many detrimental
outcomes for the Company's shareholders and other stakeholders.

Significant board and senior management changes were implemented in the wake
of the independent investigation, and the directors and management team
finally succeeded in completing the audit of the FY22 Accounts, as announced
earlier this year.  This was a significant step towards the restoration of
the Company's shares to trading on AIM, and one that was achieved
notwithstanding the historical issues uncovered during the independent
investigation.

In addition to the publication of the FY22 Accounts, the management team have
now also completed the following important steps that were required before the
Company's shares were capable of being restored to trading on AIM:

-     publication of the Group's interim results for the six-month period
ended 31 August 2022 (released on 2 June 2023);

-     as detailed in the interim results announcement on 2 June 2023, a
review of the Group's Financial Position and Prospects Procedures (FPPP), to
ensure that the Group's processes and procedures meet the standards required
of an AIM company. This review is now complete, with all internal policy
documentation (updated as appropriate) agreed and in place;

-     a review of the Group's working capital has been completed. The
directors commissioned a review of the Group's working capital to February
2025 and are satisfied the Group will have sufficient working capital during
this period, and accordingly the Company's financial position has now been
clarified. However, the Group draws the attention of shareholders to the
material uncertainty regarding going concern disclosed in the FY22 Accounts
and the FY23 interim results; and

-     Rachel Maguire and Matthew Eatough were appointed yesterday as
non-executive directors, and Derek Zissman, Bob Holt and Elizabeth Lake were
re-appointed, to work alongside Jeremy Schwartz. The Company believes that its
board is now well balanced and suitably experienced, with four non-executive
directors and two executive directors, and is appropriate for a listed company
of its size and stage of development.

Following the above, the Company and its Nominated Adviser, Zeus Capital, have
requested that the shares of the Company be restored to trading on AIM, which
is due to happen at 7.30 a.m. today.

Confirmation of grant of share options

As previously disclosed in the FY22 Accounts on 26 May 2023, the Board
consider it important to retain and incentivise the Company's management team
and to reward them for the hard work done and the trading performance
improvement delivered over the past 10 months, especially in connection with
the recently published accounts and other matters, including preparing for and
achieving the Company's restoration to trading on AIM following the suspension
of trading on 1 September 2022.

Given the imminent lifting of the suspension in trading, the Group's
Remuneration Committee has now confirmed the grant of the share options
contemplated by the FY22 Accounts on 26 May 2023 to Bob, Elizabeth and the
other members of the Company's management team.  The Company believes that
these option awards will incentivise the management team to continue
delivering growth in shareholder value.

5,684,210 nominal cost options were awarded to Bob Holt and 2,842,105 nominal
cost options were awarded to Elizabeth Lake.  In addition, 1,875,000 nominal
cost options were granted to sixteen other members of the Company's management
team.  These nominal cost options represent, in aggregate, a total dilution
of 3.4% to the Company's issued share capital.

The options awarded are fully vested, but the shares will be subject to a
12-month holding period.

The notification in the appendix to this announcement, made in accordance with
the requirements of MAR, provides further detail on the awards made.

Update on the hostile shareholder

The Board reiterates its prior views regarding boohoo's attempted hostile
takeover of the Company's board.  The approach taken by boohoo towards
Revolution Beauty is nothing short of value-destructive, opportunistic and
self-serving.  At a time when, thanks to management's tireless efforts, the
Company's fortunes are significantly improved, with business back on track and
restoration to trading on AIM occurring later today, boohoo is seeking to
stage a board and management control coup without making a general offer, or
paying a single penny, to independent shareholders of the Company.

Risks to shareholders in relation to the boohoo proposals and general meeting

The Company reminds shareholders of the potential risks attached to the boohoo
proposals in relation to the Company's ability to retain its listing on AIM.

The fundamental changes to the Company's board proposed by boohoo could
potentially lead to the Company not having an appropriate board of directors
for a listed business. This could, if it is not able to be remedied to the
satisfaction of the Company's Nominated Adviser (which would require, inter
alia, the Nominated Adviser to be comfortable that boohoo does not have the
ability to exercise undue influence and control over the Company) result in
the Company's Nominated Adviser being unable to continue acting for the
Company, and the Company's shares being suspended from trading on AIM again as
a result. There is no guarantee that this could subsequently be remedied
(either expeditiously or at all), meaning that shareholders could be left
holding shares in an unlisted company with a board controlled by boohoo.

Shareholders should be aware that boohoo's actions, if they continue, are very
likely to cause the accounts for the year ended 28 February 2023 ("FY23") to
be significantly delayed, and reminds shareholders that if the accounts for
FY23 are not published by the end of August 2023, the Company's shares would
again be suspended from trading on AIM.

Absent the consent of the Group's lenders, a further suspension from AIM would
also trigger a breach of the Group's banking facility.

All of these adverse consequences for the Company and its shareholders could
be easily avoided.

Revolution Board continues to be open to dialogue

As previously announced, the Board continues to be prepared to engage with
boohoo in good faith and in a constructive manner, to avoid the destruction of
value for all shareholders.

The Company will make further announcements as required in due course.

In the meantime, shareholders are encouraged to support the current directors
and the Company, but to take no other action.

Derek Zissman, Chair of Revolution Beauty, said:

"The Board is delighted that trading in the Company's shares will resume this
morning.  We believe that the restoration of liquidity is in the best
interests of all of our shareholders."

For further information please contact:

 Revolution Beauty Investor Relations                             Investor.Relations@revolutionbeautyplc.com

 Bob Holt / Elizabeth Lake
 Joint Corporate Brokers

 Zeus (NOMAD): Nick Cowles /Jamie Peel /Jordan Warburton          Tel: +44 (0) 161 831 1512

 Liberum: Clayton Bush / Edward Thomas / Miquela Bezuidenhoudt    Tel: +44 (0) 203 100 2222
 Media enquiries:                                                 Tel: +44 (0)20 3805 4822

 Headland Consultancy                                             Revolutionbeauty@headlandconsultancy.com

 Matt Denham / Will Smith / Antonia Pollock

The person responsible for arranging the release of this announcement on
behalf of the Company is Elizabeth Lake, the Chief Financial Officer of the
Company.

 

Appendix

PDMR disclosures

 1    Details of the person discharging managerial responsibilities / person closely
      associated
 a)   Name                                                         Bob Holt

 2    Reason for the notification
 a)   Position/status                                              Chief Executive Officer

 b)   Initial notification /Amendment                              Initial notification

 3    Details of the issuer, emission allowance market participant, auction

    platform, auctioneer or auction monitor

 a)   Name                                                         Revolution Beauty Group plc
 b)   LEI                                                          21380083TTJWXK677H17
 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 £0.01

      Identification code

                                                                   ISIN: GB00BP7L1T61
 b)   Nature of the transaction                                    Grant of options under the Revolution Beauty Long Term Incentive Plan
 c)   Price(s) and volume(s)                                       Price(s)                             Volume(s)

                                                                   £0.01                                5,684,210

 d)   Aggregated information                                       N/A - single transaction

      - Aggregated volume

      - Price
 e)   Date of the transaction                                      25 June 2023
 f)   Place of the transaction                                     Outside of trading venue

 

 1    Details of the person discharging managerial responsibilities / person closely
      associated
 a)   Name                                                         Elizabeth Lake

 2    Reason for the notification
 a)   Position/status                                              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                                                         Revolution Beauty Group plc
 b)   LEI                                                          21380083TTJWXK677H17
 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 £0.01

      Identification code

                                                                   ISIN: GB00BP7L1T61
 b)   Nature of the transaction                                    Grant of options under the Revolution Beauty Long Term Incentive Plan
 c)   Price(s) and volume(s)                                       Price(s)                             Volume(s)

                                                                   £0.01                                2,842,105

 d)   Aggregated information                                       N/A - single transaction

      - Aggregated volume

      - Price
 e)   Date of the transaction                                      25 June 2023
 f)   Place of the transaction                                     Outside of trading venue

 

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