TIDMSLWD
RNS Number : 7225C
Silverwood Brands PLC
13 October 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK
LAW PURSUANT TO THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS (SI
2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT,
THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
DATE: 13 October 2022
Silverwood Brands plc
("Silverwood" or the "Company")
Trading Update,
Interim results for the period to 31 August 2022,
Notice of General Meeting,
Subscription and Loan Facility,
Completion of Nailberry Acquisition, and
Appointment of new Directors
Silverwood Brands plc, an enterprise company established to
invest primarily in branded consumer businesses, today has earlier
today published its interim results for the period to 31 August
2022 and issues a trading update. The Company is also pleased to
announce a successful equity and debt fundraising amounting to GBP6
million, the proposed completion of the Nailberry acquisition and
the appointment of two Directors to its Board of Directors. In
order to accelerate the growth of the Company, the Company intends
to increase its share issuance authorities and intends to hold a
General Meeting, which is being held on 2 November 2022.
Interim results for the period to 31 August 2022
Following the Company's change of year end, as announced on 30
September 2022, Silverwood has earlier today published its interim
financial results, covering the period from the Company's
incorporation to 31 August 2022.
Shareholders are encouraged to read the Company's interim
financial information in conjunction with the below highlights:
-- Silverwood raised gross proceeds of GBP1.99 million by way of
a subscription for new ordinary shares with an issue price of 40
pence per share contemporaneously with its admission to trading on
the Access Segment of the Aquis Stock Exchange Growth Market on 8
November 2021.
-- The Directors are pleased that the cost base was tightly
managed, and the Company's acquisitions were structured to ensure
that performance of the targets is demonstrated before full payment
is made.
-- In June 2022, the Company acquired 100% of the issued share
capital of Balmonds Skincare Limited ("Balmonds") which sells
organic and skin friendly skin products.
-- Although the Company posted a small loss for the period, it
has now established a solid platform to support future growth
plans.
-- The Directors are carefully assembling a high calibre team of
executives, non-executives and advisors to pursue those future
growth plans.
Trading Summary
The year has resulted in an unaudited pre-tax loss of
GBP300,000. This is in line with expectations and comprises of
costs relating to the Company's IPO on the AQSE Growth Market,
advisory fees, due diligence costs and costs related to the
acquisition of Balmonds.
The Company has successfully maintained a tight control on
central costs for the past year. In the year ahead, the Company
expects its cost base to increase as more members will be added to
its core management team.
As at the end of August 2022, the Company's cash position
remains positive with an unaudited net cash position of GBP
1.76m.
The Balmonds acquisition was completed in June 2022 and
therefore contributed to the Company's consolidated financial
statements for only two and a half months' trading of this
brand.
Balmonds is trading well ahead of initial expectations, with
sales trending at over double the prior year which has moved the
business into profit. The Directors intend to reinvest these
profits to support further growth in the brand, including a move to
larger production premises once a suitable location has been
found.
The purchase terms for Balmonds allowed for a substantial
deferred element which would become due should the business meet
agreed performance criteria at the three-year anniversary. This
payment is structured as a proposed issue to the vendors of up to
3,205,360 Silverwood shares pro rata to their previous holdings in
Balmonds with a deemed issued price of 85p per share assuming all
performance criteria is met. Given the recent improvement in trade,
the Directors currently expect to make this payment in full.
Outlook
The current economic conditions remain challenging. The effects
of the pandemic and the unfortunate events in Ukraine have
continued to weigh down on global economic activity. In the UK, the
cost-of-living challenges and recent UK currency and political
events have had an impact on the Company's operations.
The Company and management have had to adapt to the challenging
environment, and this can be noted by management's ability to set
up new sales channels in non-UK markets while growing UK-based
production. This is expected to provide a buffer against the cost
pressures of the Company's predominantly sterling cost base.
Ultimately, however, both Balmonds and Nailberry are small
brands that sit within very large markets where there is ample room
for them to grow. The Directors intend to focus on the existing
sales and strategy targets for these brands and add profitable
growth.
New Ventures
The Directors continue to be presented with interesting
opportunities in the beauty and wellness space. Whilst most of
these businesses do not meet Silverwood's acquisition criteria,
certain opportunities appear attractive and management will
continue to explore adding more brands to Silverwood's portfolio
over the coming year.
Notice of General Meeting
In order to progress its growth strategy, the Company proposes
to seek shareholder approval in order to allow the Company to issue
new ordinary shares to satisfy potential acquisitions and future
equity fundraisings. The General Meeting ("GM") is proposed to be
held on 2 November 2022 at 11:00 a.m. at the offices of the
Company's AQSE Corporate Adviser and Broker, VSA Capital at Park
House, 16-18 Finsbury Circus, London EC2M 7EB.
A shareholder circular containing details of the shareholder
authorities being sought together with the Notice of GM and a Proxy
Form will be posted to shareholders in due course and will be
available on the Company's website at
https://www.silverwoodbrands.com/investors/ .
Castelnau Subscription and Loan
Pursuant to agreements entered into on 12 October 2022 between
the Company and Castelnau Group Limited ("Castelnau"), the
closed-ended investment company trading on the Specialist Fund
Segment of the London Stock Exchange and managed by Phoenix Asset
Management Partners ("PAMP"), Castelnau has agreed to subscribe for
2,285,715 new ordinary shares ("New Ordinary Shares") at a price of
70p per share, amounting to an aggregate of GBP1.6 million. In
addition, Castelnau has agreed to provide the Company with an
unsecured loan facility of approximately GBP4.4 million
("Loan").
Silverwood intends to drawdown the full facility of GBP4.4
million to enable the completion of the proposed acquisition of
Nailberry by the Company which was announced on 30 September 2022.
The Loan is repayable on the first anniversary of draw down with an
annual interest rate of 15% accruing daily. The Loan becomes
immediately repayable in the event that Mr Andrew Gerrie is no
longer a director of Silverwood. In addition, it includes
provisions for usual events of default at which time Castelnau may
by notice declare the Loan and all accrued interest is immediately
due and payable.
As a result of the Company's executive director, Andrew Gerrie,
also being a non-executive director of PAMP, Castelnau will be
deemed to have joined the Original Concert Party described in the
Company's Admission Document dated 20 May 2022 (which, for ease of
reference, can be found at
https://www.silverwoodbrands.com/publications-presentations-and-supporting-documents/
), increasing the Concert Party's holding from 73.24% to 77.66% of
the Company's issued share capital.
The impact of Castelnau's investment into the Company is
detailed below:
Shareholder Shares Held Percentage of ISC
Alison Hawksley & Andrew Gerrie* 6,913,775 50.04%
------------ ------------------
Angus Thirlwell 571,429 4.14%
------------ ------------------
Fushia Investments PTE LTD 571,429 4.14%
------------ ------------------
Andrew Monk 200,000 1.45%
------------ ------------------
Andrew Tone 104,572 0.76%
------------ ------------------
Paul Hodgins 28,577 0.21%
------------ ------------------
James Wilson 28,572 0.21%
------------ ------------------
Hu Yu 14,286 0.10%
------------ ------------------
Jane Raca 7,500 0.05%
------------ ------------------
Andrew Raca 5,000 0.04%
------------ ------------------
Castelnau 2,285,715 16.54%
------------ ------------------
Total 10,730,854 77.66%
------------ ------------------
*Alison Hawksley's and Andrew Gerrie's shareholding comprises
shares held in their respective own names, held jointly as well as
shares held by Silver Americum Limited, a company in which Andrew
Gerrie holds a 20% stake and Alison Hawksley holds a 20% stake.
Following the issue of the New Ordinary Shares, increasing the
Concert Party's shareholding in the Company to 77.66% of the
Company's voting rights, for so long as the Concert Party hold more
than 50% of the Company's voting share capital and its members are
presumed to be acting in concert, they may increase their aggregate
interests in the Ordinary Shares in the Company without incurring
any obligation under Rule 9 to make a mandatory offer for the
remaining shares, although individual members of the Concert Party,
with the exception of Andrew Gerrie and Alison Hawksley, would not
be able to increase their percentage interest in the Ordinary
Shares of the Company through 30%, or between 30% and 50%, without
the consent of the Panel.
Completion of the Nailberry Acquisition
As per the announcement from 30 September 2022, the Directors
are delighted with the exchange of contracts for the purchase of
Nailberry, the trading name of NBY London Ltd.
On 30 September 2022, the Company announced the conditional
acquisition of Nailberry subject to certain financing arrangements
being completed. The Company is pleased to advise the financing
arrangements have now been completed allowing the Company to
proceed with the completion of the acquisition of Nailberry. The
Company intend to complete the Nailberry Acquisition as soon as
possible and it will make another announcement once it has been
completed.
Appointment of Directors
The Company is pleased to announce the appointment of Sonia
Hully to the Board of Directors as an Executive Director with
effect of the completion of the Nailberry Acquisition. Sonia Hully
is the founder and CEO of NBY London Limited which owns the
Nailberry brand.
Ms Hully has extensive experience in the consumer and beauty
sectors. She started Nailberry with the opening of a renowned salon
in Chelsea she successfully sold in 2016 and quickly expanded in
the products category such as the award-winning breathable Nail
polish and Nail care for the last 8 years.
Ms Hully started her career in the capital markets for Societe
Generale, Prebon Yamane and Eurobrokers. Since leaving the
financial industry, she has been involved as an interior designer
in the development of several luxury properties and as an
entrepreneur, philanthropist, and venture capital investor,
focusing on energy transition, sustainability, and animal rights.
Ms Hully's experience will not only enrich Silverwood's Board of
Directors for her knowledge of the consumer sector but also for her
experience in entrepreneurial management and finance and her
values.
The Company is also pleased to announce the appointment of
Tanith Dodge to the Board of Directors as a Non-Executive Director
with immediate effect.
Ms Dodge is an International Business Leader working as a member
of senior executive teams and providing a commercial approach to
the business and people agenda and has over 35 years of experience
working as an HR Director across a broad sector of international
businesses. Her previous positions included Group HR Director
Bicester Village Collection, a member of the Management Committee
and Group HR Director at Marks and Spencer Group PLC and at WH
Smiths PLC. Tanith has held senior HR roles at Intercontinental
Hotels, Diageo, Prudential PLC and Allied Domecq. Her current board
experience includes Independent Non-Executive Chairperson of
Samarkand Group PLC, Interim Chairperson and Senior Independent
Non-Executive Director at Robert Walters PLC. In addition, she is a
member of the Advisory Council for PriceWaterhouseCoopers
responsible for advising internal business leaders on a range of
business matters. She has also been a director of Regents Inns Plc
and Busy Bees Plc and is a former Trustee of Ambitious About Autism
and also Kids Out and a former board member of CIPD.
In respect of both Ms Dodge and Ms Hully, there is no other
information to be disclosed pursuant to Rule 4.9 of the AQSE Growth
Market Access Rulebook.
Settlement and dealings
Application has been made to the Aquis Stock Exchange for the
admission to trading on the Aquis Stock Exchange Growth Market
("Admission") of the New Ordinary Shares. It is expected that
Admission of the New Ordinary Shares will become effective at 8.00
a.m. on or about 21 October 2022.
The New Ordinary Shares will, when issued, rank pari passu in
all respects with the Existing Ordinary Shares including the right
to receive dividends and other distributions declared following
Admission.
Following the issue of the New Ordinary Shares, the enlarged
share capital of the Company will be 13,817,062 Ordinary Shares.
The above figure 13,817,062 may be used by shareholders as the
denominator for the calculations by which they can determine if
they are required to notify their interest in, or a change to their
interest in, the Company under the Financial Conduct Authority's
Disclosure Guidance and Transparency Rules.
Andrew Gerrie, Executive Director of Silverwood, commented:
"I am pleased with the progress we have been making and today's
announcement highlights growing momentum in building a group
focused on health and healthy brands. I am also pleased for our two
new and experienced members to join our Board of Directors."
For more information, please contact:
Silverwood Brands plc
Andrew Gerrie info@silverwoodbrands.com
--------------------------
VSA Capital - AQSE Corporate Adviser and
Broker +44(0)20 3005 5000
--------------------------
Andrew Raca, Simba Khatai, Pascal Wiese (Corporate
Finance)
Andrew Monk, David Scriven, Peter Mattsson
(Corporate Broking)
--------------------------
Forward Looking Statements
This announcement contains forward-looking statements relating
to expected or anticipated future events and anticipated results
that are forward-looking in nature and, as a result, are subject to
certain risks and uncertainties, such as general economic, market
and business conditions, competition for qualified staff, the
regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political
jurisdiction, uncertainties regarding the results of exploration,
uncertainties regarding the timing and granting of prospecting
rights, uncertainties regarding the Company's ability to execute
and implement future plans, and the occurrence of unexpected
events. Actual results achieved may vary from the information
provided herein as a result of numerous known and unknown risks and
uncertainties and other factors.
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END
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