RCS - DSW Capital PLC - Placing and Proposed Admission to Trading on AIM

Zurich Insurance AGAnnouncement

13/12/2021 09:00

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RNS Number : 3545V  DSW Capital PLC  13 December 2021

NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE
UNITED STATES, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR
AUSTRALIA, HONG KONG OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.  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 ABSENT REGISTRATION UNDER THAT ACT OR AN AVAILABLE EXEMPTION
FROM IT. THERE WILL BE NO PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES.

 

This announcement is not an admission document or a prospectus and does not
constitute or form part of, and should not be construed as, an offer of
securities for subscription or sale in any jurisdiction nor should it be
relied upon in connection with any contract or commitment whatsoever.
Investors should not subscribe for or purchase any securities referred to in
this announcement except in compliance with applicable securities laws and
regulations and on the basis of the information in DSW Capital plc's ("DSW
Capital" or "DSW" or the "Company") Admission Document dated 13 December 2021
(the "Admission Document") and any supplement thereto, intended to be
published by the Company, in connection with the proposed placing of new
ordinary shares of 0.25 pence each ("Ordinary Shares") and the proposed
admission of all of its Ordinary Shares to trading ("Admission") on the AIM
market ("AIM") of London Stock Exchange plc ("London Stock Exchange"). The
full terms and conditions of the Placing and Admission are set out in the
Admission Document.

 

All defined terms used in this announcement have the meanings set out in the
Company's AIM Admission Document dated 13 December 2021, which will be
available on the Company's website: https://dswcapital.com/
(https://dswcapital.com/) .

 

 

13 December 2021

DSW CAPITAL PLC

 

Placing and Proposed Admission to Trading on AIM

 

DSW Capital, a profitable, fast growing, mid-market, challenger professional
services network, announces the successful pricing of its initial public
offering (the "IPO") and conditional placing (the "Placing") of 5,000,000
Shares at 100 pence per Share to raise gross proceeds of £5 million.

 

It is expected that Admission to AIM will take place and dealings in the
Company's Ordinary Shares on AIM will commence at 8:00am on 16 December 2021
under the ticker "DSW" with a market capitalisation at the Placing Price of
approximately £21.4 million. The ISIN of the Ordinary Shares is GB00BNG9H550
and the SEDOL is BNG9H55.

 

Shore Capital is acting as Nominated Adviser, Sole Bookrunner and Sole Broker
in relation to the Admission and Placing and will act as Nominated Adviser and
Sole Broker to the Company following Admission.

 

About DSW Capital, its model and growth strategy

 

DSW Capital, owner of the Dow Schofield Watts brand, is a profitable, fast
growing, mid-market, challenger professional services network with a cash
generative business model and scalable platform for growth. Originally
established in 2002, by three KPMG alumni, DSW is one of the first platform
models disrupting the traditional model of accounting professional services
firms. DSW currently operates licensing arrangements with 19 licensee
businesses with 82 fee earners ("FEs"), across six offices in England and one
in Scotland. These trade primarily under the Dow Schofield Watts brand. The
Group has a strong growth record, with two year historical Adjusted Operating
Profit CAGR of 28 per cent. For the year ended 31 March 2021, DSW received an
average licence fee of 14.7 per cent. of licensee revenues and generated
Operating Profit of £1.7 million and operating cash flow of £0.8 million.
The three-year historical Network Revenue CAGR to FY21 was 22 per cent.

 

DSW's vision is for the DSW Network to become the most sought-after
destination for ambitious, entrepreneurial professionals to start and develop
their own businesses. Through a licensing model, DSW gives professionals the
autonomy and flexibility to fulfil their potential. Being part of the DSW
Network brings support benefits in recruitment, funding and infrastructure.
DSW's challenger model attracts experienced, senior professionals,
predominantly with a "Big 4" accounting firm background, who want to launch
their own businesses and recognise the value of the Dow Schofield Watts brand
and the synergies which come from being part of the DSW Network.

 

DSW aims to scale its agile model through organic growth, geographical
expansion, additional service lines and investing in "Break Outs" (existing
teams in larger firms). The Directors are targeting high margin,
complementary, niche service lines with a strong synergistic fit with the
existing DSW Network.

 

James Dow, Chief Executive of DSW Capital, commented:

 

"We are delighted to announce our IPO and Admission to AIM, which are
important milestones for DSW Capital. The successful fundraise will support
our strategy to capitalise on the substantial growth opportunities presented
in the changing UK accounting market and our vision to become the most
sought-after destination for ambitious, entrepreneurial professionals to start
and develop their own businesses.

 

"The success of our model is demonstrated by the rapid rise of the DSW Network
up the sector rankings, which recently entered Accountancy Age's Top 50
Accountancy Firms. We believe our new quoted company status will help raise
the profile of DSW further, enabling us to accelerate the growth of our
Network.

 

"I would like to thank all the licensees, partners and employees across the
DSW Network for their hard work and commitment and our new investors for their
support, as we enter the next phase in this exciting journey."

 

For further information please contact:

 

 DSW Capital

 James Dow, Chief Executive Officer                                    Tel: +44 (0) 1928 378 029

 Nicole Burstow, Chief Financial Officer                               Tel: +44 (0) 1928 378 039

 Shore Capital (Nominated Adviser, Sole Bookrunner & Sole Broker)      Tel: +44 (0)20 7408 4090

 Hugh Morgan / James Thomas / John More

 Guy Wiehahn (Corporate Broking)

 Belvedere Communications

 Cat Valentine                                                         Tel: +44 (0) 7715 769 078

 Keeley Clarke                                                         Tel: +44 (0) 7967 816 525

                                                                       dsw@belvederepr.com (mailto:dsw@belvederepr.com)

 

Placing and Admission Highlights:

 

·     The Placing has raised approximately £5 million via the placing of
new Ordinary Shares at a placing price of 100 pence per share.

 

·     The majority of the net proceeds of the Placing will be used to
fund the acquisition of licence fee income and drive the recruitment strategy
with £0.8m being used to pay down the Group's outstanding bank debt.

 

·     The Directors believe that Admission will raise the Company's
profile, helping to accelerate organic growth both geographically and in terms
of complementary service lines and should facilitate the recruitment of new
fee earners and teams.

 

·     The Company's market capitalisation on Admission, based on the
Placing Price, will be approximately £21.4 million.

 

·     The Company's directors retain a substantial shareholding in the
Company on Admission, amounting to approximately 24.5% of the Ordinary Shares
in issue on Admission.

 

About DSW Capital

 

Introduction
DSW Capital, owner of the Dow Schofield Watts brand, is a profitable, fast
growing, mid-market, challenger professional services network with a cash
generative business model and scalable platform for growth. Originally
established in 2002, by three KPMG alumni, DSW is one of the first platform
models disrupting the traditional model of accounting professional services
firms. DSW currently operates licensing arrangements with 19 licensee
businesses with 82 fee earners ("FEs"), across six offices in England and one
in Scotland. These trade primarily under the Dow Schofield Watts brand. The
Group has a strong growth record, with two year historical Adjusted Operating
Profit CAGR of 28 per cent. For the year ended 31 March 2021, DSW received an
average licence fee of 14.7 per cent. of licensee revenues and generated
Operating Profit of £1.7 million and operating cash flow of £0.8 million.
The three-year historical Network Revenue CAGR to FY21 was 22 per cent.

 

About DSW

DSW's vision is for the DSW Network to become the most sought-after
destination for ambitious, entrepreneurial professionals to start and develop
their own businesses. Through a licensing model, DSW gives professionals the
autonomy and flexibility to fulfil their potential. Being part of the DSW
Network brings support benefits in recruitment, funding and infrastructure.
DSW's challenger model attracts experienced, senior professionals,
predominantly with a "Big 4" accounting firm background, who want to launch
their own businesses and recognise the value of the Dow Schofield Watts brand
and the synergies which come from being part of the DSW Network.

 

James Dow, Jonathan Schofield and Mark Watts, having worked at KPMG's
corporate finance practice in the North West of England, founded Dow Schofield
Watts LLP as a corporate finance boutique in 2002. Over the last 19 years,
this experienced and highly regarded team has created a successful licensing
business, based around multi award-winning corporate finance and due diligence
services, alongside a growing range of complementary activities in the
professional services sector (350 corporate finance advised transactions now
completed with a combined value by the Network of £8.47 billion).

 

As the Dow Schofield Watts name became established, the management team
identified a clear opportunity to tap into an unfulfilled and under-rewarded
talent pool. The "Big 4" accounting firms have many high calibre individuals,
who are either frustrated at the limited openings to make partner or, having
developed a good network of contacts within a specialist niche, want to run
their own businesses. DSW offers these individuals an attractive commercial
proposition. It provides support, including regulatory guidance, start-up
capital, a base level of drawings (salary), and access to DSW's extensive
network of contacts, including the benefit of cross referrals. The start-up
businesses are able to trade under the Dow Schofield Watts name. In FY21,
average licence fees received by DSW were 14.7 per cent. of licensee revenues,
up from 12.6 per cent. in FY20, with licensee partners retaining on average 85
per cent. of fees billed. The support provided by DSW empowers ambitious
professionals to focus on winning and servicing clients and concentrate on
building their own businesses. Use of the Dow Schofield Watts name, with the
credibility it brings and the Network's service line capability, also helps
licensees with competitive pricing, compared to levels typically charged by
the "Big 4", and enhanced pricing, compared with smaller independents.

 

DSW's robust platform offers a scalable, challenger recurring revenue model
that is capital light, cash generative and enables service expansion.

 

DSW believes its Network is very attractive to individuals wanting improved
flexibility around their work commitments without billing targets, those
seeking greater operational freedom, and those who prefer a model with no
requirement to invest partnership capital. These features are expected to
prove particularly attractive in a post-Covid world and disrupt the
traditional model of accounting firms.

 

DSW has a strong commitment to diversity and believes the nature of its model
presents an opportunity to lead the accounting profession in this area. In
particular, DSW takes pride that 60 per cent. of its Board are female, which
sets DSW apart when considering only 15 per cent. of AIM company board
directors are female. Corporate finance also typically has lower female
representation, making the level of female partner representation across the
DSW Network, at approximately 22 per cent., even more impressive.

 

The Directors believe that there is significant opportunity for acquisitive
growth. The accounting profession is ripe for disruption, as the "Big 4" come
under increasing pressure from regulatory bodies to restructure. This presents
potential for DSW's differentiated licence fee model to attract talent from
some of the large professional services firms in the UK. More recently, DSW
has acquired licence fees from existing independent advisory firms looking to
accelerate their growth as part of a wider network.

 

The UK Accounting and Financial Professional Services Market

 

The UK accounting and financial professional services market is diverse,
comprising approximately 5,000(1) professional services firms, which the
Directors believe can be broadly divided into three segments:

1.    "Big 4" - large companies with significant scale, offering a wide and
diversified catalogue of services, with a large regional and international
footprint.

2.    The "mid-market" - firms with substantially less scale than the "Big
4" but still offering a number of different services, often with a number of
offices across the UK. The larger of these firms may also have an
international presence.

3.    The "high-street" market - small owner-managed business, often
specialising in one service line, usually operating in one location.

 

Within this market, per the 2019 Competition and Markets Authority's ("CMA")
Statutory Audit Services market study, the "Big 4" generated approximately
£9.3 billion of revenue, whilst the latter two segments accounted for
approximately £1.5 billion of revenue(2).

 

 (1)  Financial Reporting Council, "Key Facts and Trends in the Accountancy
      Profession", October 2020
 (2)  Financial Reporting Council, "Key Facts and Trends in the Accountancy
      Profession", October 2020

 

Growth Strategy

 

The Group's long-term vision is for DSW's Network to become the most
sought-after destination for ambitious, entrepreneurial professionals to start
and develop their own businesses. DSW aims to scale its agile model through
organic growth, geographical expansion, additional service lines and investing
in "Break Outs" (existing teams in larger firms). The Directors are targeting
high margin, complementary, niche service lines with a strong synergistic fit
with the existing DSW Network.

 

The key growth drivers are as follows:

 

Organic growth in fee earners in existing licensees:

·     Recruitment is one of the principal sources of organic growth for a
licensee business;

·     Retention rates have been very high reflecting the strength of
DSW's model, the close partner and employee interaction and the low partner to
employee ratio;

·     The scope for cross-selling across the Network is significant. By
being part of a larger network, DSW's licensees are able to access contacts
which they would not otherwise have had and are, therefore, able to sell their
services and expertise to a wider client base; and

·     Providing opportunities for fee earners to network with one another
is important to facilitate cross-referrals. DSW hosts six-monthly partner
conferences, quarterly employee networking meetings, monthly all partner calls
and various social events for its Network throughout the year.

 

Recruitment of new licensees:

·     The Directors are of the view that this market opportunity is
significant as the "Big 4" are under increasing pressure to restructure.
Within this context, the DSW opportunity is appealing, as DSW Network partners
are given greater flexibility, a direct link between fees and reward and
autonomy to build their own businesses. This is in contrast to traditional
firms, where partners and employees must work strictly within the confines of
the wider organisation and firm policies.

 

Recruitment of new start-ups ("Break Outs" of teams from existing larger
firms)

·     The Directors intend to target "Break Outs" from other firms and
believe that having a larger capital base will allow the Group to attract
teams and businesses. Successfully securing "Break Outs" and proving the
concept works is expected to attract other teams in a virtuous circle.

 

Acquisition of licence fees

·     Whilst DSW has a proven track record of scaling start-ups into
successful licensees, more recently, the Directors have chosen to focus on
acquiring licence fee income, which it believes will allow the Group to scale
more quickly. A business of greater scale is an important objective for DSW
and its Network, making it easier to recruit new professionals. The Directors
will target specialist, high-margin, niche sectors of professional services;
and

·     A key cornerstone of the wider strategy is successful admission to
AIM, as this is expected to accelerate growth opportunities, through increased
recognition and visibility of the DSW brand, as well as provide increased
access to capital to finance these acquisitions.

 

Geographical expansion

·     The Directors intend to increase the geographical presence of the
business. In the Directors' view, this is most easily achieved through
acquisition and subsequently adding on complementary service capabilities.

 

Service line expansion

·     The Directors are open to considering a vast range of non-audit
services, which are provided by the "Big 4", particularly those of a more
specialist nature, without the conflicts that come with providing audit
services. The Directors believe these are significant markets, offering
material growth opportunities for DSW's licence fee model and platform.

 

Reasons for Admission

The Directors consider Admission to be an important step in the Group's
development, to provide access to capital to fund Licence Fee Acquisitions,
geographic and service line expansion, to increase brand awareness and
recognition, and add further credibility to the DSW offering amongst potential
new licensees and clients of the Network, thereby enhancing the Network's
future growth potential.

The net proceeds of the Placing of approximately £3.8 million will be used to
pay down the Group's outstanding bank debt of £0.8 million (as at 30
September 2021), with the balance being used primarily to fund the acquisition
of licence fee income and drive the recruitment strategy. The Directors have
identified a pipeline of target opportunities which they believe will generate
attractive returns for shareholders.

 

Dividend policy

 

The Directors intend that DSW will pay interim and final dividends going
forward, with the interim to be announced at the time of the release of the
Company's interim results and the final dividend at the time of the release of
the Company's final results. The Directors intend that the interim and final
dividends will represent in aggregate a payout ratio of up to 70 per cent. of
distributable earnings and that this pay-out will be split one-third at the
interim stage, with the balance being paid as the final dividend. The
Directors' current intention is to commence dividend payments by recommending
a final dividend after the finalisation of DSW's final accounts for the
current financial year, anticipated to be in the third quarter of calendar
year 2022.

Directors

The Board on Admission will comprise:

Heather Lauder, Independent Non-Executive Chair, age 53

Heather was appointed as a Non-Executive Director in February 2020 prior to
her appointment as Independent Non-Executive Chair. Heather has over 30 years'
experience in senior retail and business banking roles with her most recent
role being as Chief Customer Officer at the Co-op Bank. She was also a member
of the executive team which oversaw the turnaround of Northern Rock and its
sale to Virgin Money. Heather started her career at RBS where she held several
global roles. During her career, Heather has won multiple awards as a director
and been named as one of the Northern Power Women's top 50 Power List. She
currently sits on the board of the National Museums & Galleries of
Liverpool and currently chairs its remuneration committee, having previously
chaired both its audit committee and its risk committee for five years. She
held a Non- Executive Director role at the Financial Ombudsman Service from
September 2020 to July 2021, prior to her recent appointment as Non-Executive
Director at Zurich Assurance Ltd effective from July 2021.

James Dow, Chief Executive Officer, age 60

James established Dow Schofield Watts LLP in 2002. James is qualified as both
a Chartered Accountant and Cost and Management Accountant. James joined KPMG
in 1983 and after qualifying, focused for over 13 years on corporate finance,
approximately eight years as a partner leading Corporate Finance in the North
West. James was nominated for the North West Insider Top Dealmakers of the
last 25 years in October 2019 and is the author of six books focused on
private equity, corporate finance, and deal structuring. James is also a
non-executive director of the Liverpool Institute of Performing Arts. He is
Chair of private equity fund, PHD Equity Partners.

Nicole Burstow, Chief Financial Officer, age 39

Nicole joined the Company as Group Finance Director in April 2019. Nicole
previously spent 15 years with Deloitte in Manchester. As a Director, she was
responsible for leading the audits of some of the region's largest and most
complex international businesses, more recently focusing on listed businesses.
She also played a significant role in growing the North West practice by
recruiting and developing talent and expanding the local client base.

Jillian Jones, Independent Non-Executive Director, age 58

Jillian joined the Company as Non-Executive Director in January 2021. She is a
Chartered Accountant, with over 30 years' experience in the accountancy
profession, having qualified with Deloitte, Haskins & Sells. She retired
from RSM in 2020 where she was a main board director and acting COO and, since
2013, the North West Regional Managing Partner. Jillian is well known and
highly regarded within the professional services sector and the North West
business community. Her experience in helping to grow and build RSM's business
regionally and nationally will be invaluable in supporting the next stage of
DSW's strategic development.

 

Jonathan Schofield, Non-Executive Director, age 60

Jonathan co-founded Dow Schofield Watts LLP in 2002. A chartered accountant,
Jonathan spent 12 years with KPMG before joining with an MBO in 1994. After
exiting from the buyout, Jonathan became a partner at Grant Thornton. In 1999
he joined Cammell Laird Holdings Plc as Finance Director and subsequently was
appointed Chief Executive. Jonathan is currently a Non-Executive Director with
EA Technology Ltd, IVCC and Seddon Group. Previously Jonathan was also
Non-Executive Chairman of Dee Valley Group Plc, Non-Executive Director and
Vice Chairman of The Liverpool School of Tropical Medicine and Non-Executive
Director of Atlantic & Peninsula Marine Services.

 

IMPORTANT INFORMATION

 

This announcement does not constitute, or form part of, any offer or
invitation to sell, allot or issue, or any solicitation of any offer to
purchase or subscribe for, any securities in the Company in any jurisdiction
nor shall it, or any part of it, or the fact of its distribution, form the
basis of, or be relied on in connection with or act as an inducement to enter
into, any contract or commitment therefor.

 

Recipients of this announcement who are considering subscribing for or
acquiring Ordinary Shares are reminded that any such acquisition or
subscription must be made only on the basis of the information contained in
the final Admission Document, which may be different from the information
contained in this announcement. No reliance may be placed, for any purpose
whatsoever, on the information or opinions contained in this announcement or
on its accuracy, fairness or completeness. To the fullest extent permitted by
applicable law or regulation, no undertaking, representation or warranty,
express or implied, is given by or on behalf of the Company, Shore Capital and
Corporate Limited and/or Shore Capital Stockbrokers Limited ("Shore Capital"),
or their respective parent or subsidiary undertakings or the subsidiary
undertakings of any such parent undertakings or any of their respective
directors, officers, partners, employees, agents, affiliates, representatives
or advisers or any other person as to the accuracy, sufficiency, completeness
or fairness of the information, opinions or beliefs contained in this
announcement and, save in the case of fraud, no responsibility or liability is
accepted by any of them for any errors, omissions or inaccuracies in such
information, opinions or beliefs or for any loss, cost or damage suffered or
incurred, howsoever arising, from any use, as a result of the reliance on, or
otherwise in connection with, this announcement. Shore Capital, which, in each
case, are authorised and regulated by the Financial Conduct Authority are
acting only for the Company in connection with the proposed Placing and
Admission and are not acting for or advising any other person, or treating any
other person as their respective client, in relation thereto and will not be
responsible for providing the regulatory protection afforded to clients of
Shore Capital, or advice to any other person in relation to the matters
contained herein. Such persons should seek their own independent legal,
investment and tax advice as they see fit. Shore Capital's responsibilities,
as the Company's nominated adviser under the AIM Rules for Nominated Advisers
and AIM Rules for Companies will be owed solely to the London Stock Exchange
and not to the Company, to any of its directors or to any other person in
respect of a decision to subscribe for or otherwise acquire Ordinary Shares in
reliance on the Admission Document. No representation or warranty, express or
implied, is made by Shore Capital or the Company or their respective
affiliates as to any of its contents.

 

This announcement is only addressed to, and directed at, persons in member
states of the European Economic Area who are qualified investors ("Qualified
Investors") within the meaning of Article 2 (e) of the Prospectus Regulation
(EU) 2017/1129 ("Prospectus Regulation"). In the United Kingdom, this
announcement is addressed to and directed only at "qualified investors" within
the meaning of Article 2(e) of the Prospectus Regulation, as it forms part of
English law by virtue of the European Union (Withdrawal) Act 2018 (as amended)
and regulations made under that Act, who are (i) persons having professional
experience in matters relating to investments, i.e., investment professionals
within the meaning of Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005 (the "FPO"); (ii) high net-worth
companies, unincorporated associations and other bodies within the meaning of
Article 49 of the FPO; or (iii) persons to whom it is otherwise lawful to
communicate it (together, "relevant persons"). Any investment activity in
relation to the Placing is available only to and will be engaged in only with
(i) in the United Kingdom, relevant persons and (ii) in any member state of
the European Economic Area, Qualified Investors. It is not intended that this
announcement be distributed or passed on, directly or indirectly, to any other
class of person and under no circumstances should persons of any other
description rely on or act upon the contents of this announcement.

 

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 Ordinary Shares
have not been and will not be registered under the US 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. No securities commission or
similar authority in Canada has in any way passed on the merits of the
Ordinary Shares and any representation to the contrary is an offence. No
document in relation to the proposed Placing has been, or will be, lodged
with, or registered by, the Australian Securities and Investments Commission,
and no registration statement has been, or will be, filed with the Japanese
Ministry of Finance. Subject to certain exceptions, the Ordinary Shares may
not be, directly or indirectly, offered, sold, taken up, delivered or
transferred in or into or from any jurisdiction in which the same would be
unlawful or offered or sold to a person within such a jurisdiction.

 

Neither this announcement nor any copy of it may be (i) taken or transmitted
into or distributed, directly or indirectly, in the United States (within the
meaning of regulations made under the US Securities Act of 1933, as amended),
or (ii) taken or transmitted into, distributed, published, reproduced or
otherwise made available or disclosed in Canada, Australia, Japan, Hong Kong,
New Zealand or the Republic of South Africa or to any resident thereof, except
in compliance with applicable securities laws. Any failure to comply with
these restrictions may constitute a violation of the securities laws or other
laws of any such jurisdiction. The distribution of this announcement in other
jurisdictions may be restricted by law and the persons into whose possession
this announcement comes should inform themselves about, and observe, any such
restrictions.

 

The date of Admission may be influenced by factors such as market conditions.
There is no guarantee that the Placing and Admission will occur, and you
should not base your financial decisions on the Company's intentions in
relation to the Placing and Admission at this stage. Acquiring securities to
which this announcement relates may expose an investor to a significant risk
of losing all of the amount invested. The value of shares can decrease as well
as increase. This announcement does not constitute a recommendation concerning
the Placing. Persons considering an investment in such investments should
consult an authorised person specialising in advising on such investments.

 

This announcement contains certain statements that are, or may be, forward
looking statements with respect to the financial condition, results of
operations, business achievements and/or investment strategy of the Company.
Such forward looking statements are based on the Company's expectations of
external conditions and events, current business strategy and plans and the
other objectives of management for future operations, and estimates and
projections of the Company's financial performance. Though the Company
believes these expectations to be reasonable at the date of this announcement,
they may prove to be erroneous. Forward looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, achievements or performance of the Group, or the industry in which
the Group operates, to be materially different from any future results,
achievements or performance expressed or implied by such forward looking
statements. Past performance cannot be relied upon as a guide to future
performance and should not be taken as a representation that trends or
activities underlying past performance will continue in the future.

 

Certain figures in this announcement, including financial information, have
been subject to rounding adjustments. Accordingly, in certain instances, the
sum or percentage change of the numbers contained in this announcement may not
conform exactly to the total figure given.

 

For the avoidance of doubt, the contents of the Company's website is not
incorporated by reference into, and do not form part of, this announcement.

 

Information to Distributors

 

Solely for the purposes of the product governance requirements contained
within the FCA Handbook Product Intervention and Product Governance Sourcebook
(the "UK Product Governance Rules"), and disclaiming all and any liability,
whether arising in tort, contract or otherwise, which any "manufacturer" (for
the purposes of the UK Product Governance Rules) may otherwise have with
respect thereto, the Ordinary Shares have been subject to a product approval
process, which has determined that the Ordinary Shares are: (i) compatible
with an end target market of investors who meet the criteria of professional
clients and eligible counterparties, each defined in the FCA Handbook Conduct
of Business Sourcebook ("COBS"); and (ii) eligible for distribution through
all distribution channels as are permitted by the UK Product Governance Rules
(the "UK Target Market Assessment").

 

Solely for the purposes of the product governance requirements contained
within: (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive
(EU) 2017/593 supplementing MiFID II; and (c) local implementing measures
(together, the "MiFID II Product Governance Requirements"), and disclaiming
all and any liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the MIFID II Product Governance
Requirements) may otherwise have with respect thereto, the Ordinary Shares
have been subject to a product approval process, which has determined that the
Ordinary Shares are: (i) compatible with an end target market of investors who
meet the criteria of professional clients and eligible counterparties, each as
defined in MiFID II; and (ii) eligible for distribution through all
distribution channels as are permitted by MiFID II (the "EU Target Market
Assessment").

 

Notwithstanding the UK Target Mark Assessment and the EU Target Market
Assessment, distributors should note that: the price of the Ordinary Shares
may decline and investors could lose all or part of their investment; the
Ordinary Shares offer no guaranteed income and no capital protection; and an
investment in the Ordinary Shares is compatible only with investors who do not
need a guaranteed income or capital protection, who (either alone or in
conjunction with an appropriate financial or other adviser) are capable of
evaluating the merits and risks of such an investment and who have sufficient
resources to be able to bear any losses that may result therefrom. Each of the
UK Target Market Assessment and the EU Target Market Assessment is without
prejudice to any contractual, legal or regulatory selling restrictions in
relation to the Placing. Furthermore, it is noted that, notwithstanding the UK
Target Market Assessment and the EU Target Market Assessment and Shore Capital
will only procure investors who meet the criteria of professional clients and
eligible counterparties each as defined under COBS or MiFID II, as applicable.

 

For the avoidance of doubt, each of the UK Target Market Assessment and the EU
Target Market Assessment does not constitute: (a) an assessment of suitability
or appropriateness for the purposes of Chapters 9A or 10A respectively of COBS
of MiFID II, as applicable; or (b) a recommendation to any investor or group
of investors to invest in, or purchase, or take any other action whatsoever
with respect to the Ordinary Shares.

 

Each distributor is responsible for undertaking its own target market
assessment in respect of the Ordinary Shares and determining appropriate
distribution channels.

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rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

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