REG - Science Group PLC - Bank Refinancing & Ricardo Strategic Investment

ScienceAnnouncement

19/03/2025 07:15

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RNS Number : 2019B  Science Group PLC  19 March 2025

 

19 March 2025

 

Science Group plc

("Group" or "Science Group")

 

Refinancing of Bank Facilities and Ricardo Strategic Investment

 

The Science Group Term Loan ("2016 Loan") and Revolving Credit Facility ("2021
RCF") were scheduled to expire in September 2026 and December 2026
respectively. In order to support the Group's strategy, the Board initiated
negotiations with potential bank debt providers in September 2024 and agreed
term sheets with Lloyds Bank in November 2024. These renewed, increased and
extended facilities have now been finalised.

 

Term Loans

 

There are two new Term Loans for a combined value of £12 million, each for 10
years expiring in March 2035. Each loan is secured solely and individually
against the Group's freehold properties: one loan to the property in Harston,
near Cambridge, and, a second, independent loan to the property in Epsom,
Surrey. No other security is provided by the Group operating businesses and
there are no operating covenants on these loans.

 

The interest margin of 2.6% is the same as the 2016 Loan. Interest rate swaps
will fully hedge the two loans resulting in a 10-year fixed effective interest
rate of approximately 7.3%, comprising the SONIA lending margin plus the swap
rate.

 

In connection with repaying the 2016 Loan early, the Group will realise a
one-off benefit, with corresponding cash inflow, associated with the interest
rate hedging on that loan of approximately £0.6 million.

 

Revolving Credit Facility ("RCF")

 

The new, increased RCF is for £30 million, for a period of 5 years expiring
in March 2030. The RCF also has a £10 million accordion. If drawn, the RCF
has two operating covenants: (1) Net Leverage which should not exceed 3.0x
EBITDA; and, (2) Interest Cover which should not be less than 4.0x EBITDA,
with certain adjustments permitted to both covenants. The margin on the RCF
has been significantly reduced to 1.95%, compared with 3.3% on the 2021 RCF.
The RCF is currently undrawn.

 

Strategic Investment in Ricardo plc

 

On 28 February 2025, Science Group announced that it had acquired a
shareholding in Ricardo plc, a British science and technology consultancy and
engineering business. Through stock market purchases, Science Group is now the
second largest shareholder in Ricardo with a shareholding of 10.04 million
shares, equivalent to 16.13%.

 

This strategic investment has been acquired at an average cost (including
brokerage fees) of 231 pence per share, with the majority of the Ricardo
investment acquired around 15 year low share price levels. The Ricardo closing
share price on 18 March 2025 was 254 pence per share, validating the timely
and effective allocation of capital. Science Group may or may not increase its
shareholding.

 

At Friday 14 March 2025, adjusting for the cost of the Ricardo share purchases
(including brokerage fees), on a pro forma basis, Science Group retained gross
cash of approximately £25.8 million and net funds of approximately £14.1
million. Accordingly, the Group's existing cash balances and strong operating
cash flow, enhanced by the new, increased, long term debt facilities, provide
significant capital resources to enable the Board to pursue the Science Group
strategy with confidence and without impacting the Group's share buy-back
programme.

 

 

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication
of this announcement, this information is now considered to be in the public
domain

 

 

- Ends -

 

 

 For further information:

Science Group plc
 Martyn Ratcliffe, Executive Chair                                                                                                                                                                                                   Tel: +44 (0) 1223 875 200
 Jon Brett, Finance Director                                                                                                                                                                                                         www.sciencegroup.com
                                                                                                                   (https://protect.checkpoint.com/v2/___http:/www.sciencegroup.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzo1NDRhNWQ3YmEyNzhkNTU2ZGE5N2UyYWY0NWM1MWViODo2OjNjZmU6YzM2NjI3NDU1NzU5ZjE0MThiYjE1ZWRhMmZjNmQ1NmQ3ZDQwOTM3NGNiNGEzNjEzMjllOTlkNWNlZmNhZjc0ZTpwOlQ6Tg)

 Canaccord Genuity Limited (Nominated Adviser and Joint Broker)
 Simon Bridges, Andrew Potts                                                                                                                                                                                                         Tel: +44 (0) 20 7523 8000

 Panmure Liberum Limited (Joint Broker)
 Max Jones, John More                                                                                                                                                                                                                Tel: +44 (0) 20 3100 2000

 MHP
 Reg                                                                                                                                                                                                                                 Tel: +44 (0) 7831 406117
 Hoare

 

 

 

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