TIDMFFX TIDMCRS
RNS Number : 1790R
FAIRFX Group PLC
07 March 2016
7 March 2016
FairFX Group plc
("FairFX" or "the Group" or "the Company")
Proposed Placing, strategic investment by Crystal Amber Fund and
2015 trading statement
GBP5.25 million investment to accelerate marketing strategy
Strong overall performance in 2015 due to focus on growing
FairFX Card businesses
FairFX, the low cost multi--currency payments service, is
pleased to announce a proposed placing to raise GBP5.25 million
(before expenses), including a significant strategic investment
from Crystal Amber Fund Limited ("Crystal Amber") of GBP5.0
million. The Company also provides an update ahead of its full year
2015 results.
Highlights of proposed investment:
- Proposed Placing totaling GBP5.25 million at 20p per share from new and existing investors;
- Crystal Amber investing GBP5.0 million as part of the Placing;
- Conditional Issue of Warrant to Crystal Amber over 7,500,000 new Ordinary Shares;
- Strategic investment will be used to accelerate FairFX's
marketing activities and aggressively target the Corporate Card
segment in 2016;
- FairFX will be funded to execute its proposed marketing and organic expansion strategy; and
- Crystal Amber will hold approximately 24.24% of the enlarged
issued share capital following the issuance of the Placing
Shares*.
* Conditional upon the FCA Condition being satisfied as further
described in this announcement.
2015 trading highlights:
- Full year 2015 turnover up 32% to approximately GBP625 million;
- 75,039 new currency card customers acquired during the year, up 56% on 2014; and
- Across all product segments, a total of 103,338 new customers
acquired during the year, up 20% on 2014.
An explanatory circular containing a notice of General Meeting
of the Company to be held at the offices of Berwin Leighton Paisner
LLP, Adelaide House, London Bridge, London, EC4R 9HA on 29 March
2016 at 11.00am, will shortly be posted to Shareholders (the
"Circular") and will be made available to view on the Company's
website at www.fairfxplc.com/investors. Unless otherwise defined,
defined terms within this announcement have the same meanings as
those to be set out within the circular. Definitions are also set
out at the end of this announcement.
Introduction
FairFX, the low cost multi--currency payments service, today
announces a conditional Placing of 26,250,000 new Ordinary Shares
with Crystal Amber and other institutional investors to raise
approximately GBP5.25 million (before expenses).
The Placing is conditional, inter alia, upon the Company
obtaining approval from its Shareholders to grant the Directors
authority to allot the Placing Shares and to dis-apply statutory
pre-emption rights which would otherwise apply to the allotment of
the Placing Shares. The Placing Shares will be issued in two
tranches; the First Placing Shares and the Second Placing Shares,
in order to provide the FCA with the appropriate notification and
period of time to raise any objection, as required by the Payment
Services Regulations 2009, prior to Crystal Amber acquiring a
Qualifying Holding (as defined in such regulations) in the
Company's subsidiary fairfxplc ("FCA Condition").
Background to and reasons for the Placing
The Directors believe that the strategic investment by Crystal
Amber and other placees will enable FairFX to significantly
accelerate its growth plans combining a more aggressive land-grab
in both the retail and corporate customer segments, as well as
rolling out its offering to other locations.
Accordingly, it is intended that the net proceeds of the Placing
will be deployed by the Company across its key strategic
initiatives. Specifically, marketing spend for all retail customers
across TV and digital platforms will be bolstered, sales effort to
corporates for the market-leading FairFX platform will be expanded
and I.T. resources will be selectively added to speed up new
product developments and overseas roll-outs.
The investment also provides FairFX with a key strategic
institutional investor who can provide insight and advice to the
business, as well as access to a business network which can help
accelerate top-line sales growth.
Trading update for 2015
The Company is pleased to report that 2015 was another year of
commendable progress, with turnover increasing by 32% to
approximately GBP625 million. During the year 103,338 new customers
were acquired across all of the Company's product segments (up 20%
on 2014), taking its total number of customers to 508,048.
The Company's strategic focus on higher value products is
delivering strong results with numbers of new Retail Card customers
up 40%, year on year, new Wholesale Dealing customers up 44% and
new Corporate Card customers up 40%. The combined total number of
new Retail and Corporate card customers was 75,039, up 56% on the
previous year (2014: 48,163). This growth correlated with the
Company's marketing strategy of focusing on acquiring card
customers over the lower margin cash-in-the-post customers.
FairFX expects to report its full year results in April 2016
Commenting on the strategic investment and 2015 trading, Chief
Executive Officer, Ian Strafford-Taylor, said: "2015 was notable
for the success of our stated strategy of a land-grab in the Retail
Card space. The growth across Retail and Corporate demonstrates the
success of the marketing strategy, in terms of focusing on
acquiring card customers over the lower margin cash-in-the-post
customers.
"We are also absolutely delighted with the strategic tie-up with
Crystal Amber. As well as representing a major endorsement of
FairFX's business model and success to date, this investment
provides the necessary resources to execute our land-grab strategy
in 2016 and beyond and push aggressively into the Corporate Card
space. We are extremely excited about what we will be able to
deliver."
Richard Bernstein, Investment Adviser to Crystal Amber,
commented: "We're delighted to conditionally acquire a significant
holding in FairFX, an online business with more than 500,000
customers utilising its peer-to-peer payments platform. We've
identified a hugely scalable business model and are looking forward
to assisting FairFX to capitalise on its potential."
FairFX Group plc
Ian Strafford-Taylor,
CEO +44 (0) 20 7778 9308
------------------------------ ---------------------
Cenkos Securities plc
Max Hartley/Callum Davidson +44 (0) 20 7397 8925
------------------------------ ---------------------
Yellow Jersey PR
Charles Goodwin +44 (0) 7747 788 221
------------------------------ ---------------------
The Placing
The Company has conditionally raised approximately GBP5.1
million (net of expenses) through the issue of the Placing Shares
at the Issue Price, which represents a discount of approximately
29.8 per cent. to the closing middle market price of 28.5p per
Existing Ordinary Share on 4 March 2016, being the last practicable
date prior to the publication of this announcement.
The Placing is conditional, inter alia, upon the Company
obtaining approval from its Shareholders to grant the Directors
authority to allot the Placing Shares and to dis-apply statutory
pre-emption rights which would otherwise apply to the allotment of
the Placing Shares. The Placing Shares will be issued in two
tranches; the First Placing Shares and the Second Placing Shares,
in order to allow for the required FCA Consent Condition to be
satisfied. The Placing is conditional upon the admission of the
Placing Shares to trading on AIM. The Placing Shares will represent
approximately 25.5 per cent. of the Company's issued ordinary share
capital immediately following Second Admission.
If the FCA Consent Condition is not satisfied or waived, the
Second Placing Shares will not be issued or admitted to trading on
AIM. If the Placing is limited to the issuance of the First Placing
Shares only, the gross proceeds of the Placing would be limited to
approximately GBP1.80 million.
The Placing Agreement
Pursuant to the terms of the Placing Agreement, Cenkos, as agent
for the Company, has conditionally agreed to use its reasonable
endeavours to procure subscribers for the Placing Shares at the
Issue Price.
The Placing Agreement is conditional upon, inter alia, the
Resolutions set out in the Notice of General Meeting being duly
passed at the General Meeting and First Admission becoming
effective on or before 8.00am on 30 March 2016 (or such later time
and/or date as the Company and Cenkos may agree, but in any event
by no later than 8.00am on 30 June 2016). In addition the placing
of the Second Placing Shares is conditional upon, inter alia,
satisfaction or waiver of the FCA Consent Condition and Second
Admission.
Settlement and dealings
Application will be made to the London Stock Exchange for the
Placing Shares to be admitted to trading on AIM. It is expected
that First Admission will occur on 30 March 2016. Application will
be made for the Second Placing Shares as soon as is practicable
following satisfaction or waiver of the FCA Consent Condition.
The Placing Shares will, when issued, rank in full for all
dividends and other distributions declared, made or paid on the
Ordinary Shares following Admission and otherwise pari-passu in all
respects with the Existing Ordinary Shares.
Shareholdings post transaction and Concert Party
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Following First Admission, it is expected that Crystal Amber
will hold 7,750,000 Ordinary Shares, representing approximately
9.03 per cent. of the Company's enlarged issued share capital
immediately following First Admission assuming no further shares
are issued by the Company or purchased by Crystal Amber in the
market. Following Second Admission, it is expected that Crystal
Amber will hold 25,000,000 Ordinary Shares, representing
approximately 24.24 per cent. of the Company's then issued share
capital assuming no further shares are issued by the Company or
purchased by Crystal Amber in the market. Following Second
Admission and exercise of the Warrant in full, it is expected that
Crystal Amber will hold 32,500,000 Ordinary Shares, representing
approximately 29.38 per cent. of the Company's then issued share
capital, assuming no further shares are issued by the Company or
purchased by Crystal Amber in the market.
Following Second Admission and the exercise of the Warrant in
full, it is expected that the Concert Party, further details of
which are disclosed in the Company's Admission Document dated 1
August 2014 and is available to view on the Company's website at
www.fairfxplc.com/investors, will hold approximately 51.2 per cent.
of the Company's then issued share capital, assuming no further
shares are issued.
Warrant
In consideration of Crystal Amber's strategic investment in the
Company by way of its participation in the Placing, the Company has
conditionally agreed with Crystal Amber to issue a warrant to
subscribe for up to 7,500,000 Ordinary Shares at a price of 27
pence per Ordinary Share (the "Warrant") to Crystal Amber.
The issue of the Warrant is conditional upon granting of
authority to issue shares and disapplication of pre-emption rights
by Shareholders at the General Meeting and upon Second Admission
occurring.
The Warrant, which will represent approximately 7.3 per cent. of
the Company's issued share capital as enlarged by the Placing, can
be exercised in up to three tranches, and must be exercised by the
third anniversary of its issue, failing which it will lapse.
Board appointment
Following Second Admission, Crystal Amber will have the right to
appoint a director to the board of the Company. This right shall
cease if Crystal Amber holds less than 15 per cent. of the
Company's issued share capital.
General Meeting
Set out at the end of the Circular will be a notice convening
the General Meeting to be held at 11.00 am at the offices of Berwin
Leighton Paisner LLP, Adelaide House, London Bridge, London, EC4R
9HA on 29 March 2016 for the purposes of considering and, if
thought fit, passing the Resolutions.
Resolution 1, which will be proposed as an ordinary resolution,
is to authorise the Directors
(a) to allot the Placing Shares in connection with the
Placing;
(b) to issue the Warrant;
(c) to allot Ordinary Shares up to an aggregate nominal amount
of GBP256,220.13 being an amount equal to one third of the
Company's issued share capital (excluding treasury shares) as at 4
March 2016. The Directors may exercise this authority to issue
shares as consideration in any future business acquisitions carried
out by the Company or any of its subsidiaries, from time to time.
However the authority will only be exercised if the Directors
consider that it is in the best interests of the Company at that
time; and;
(d) to issue an additional aggregate nominal amount of up to
GBP256,220.13 being an amount equal to one third of the Company's
issued share capital (excluding treasury shares) as at 4 March
2016. This additional authority is to be applied to rights issues
only and is in accordance with the recommendations of the Rights
Issue Review Group and the Association of British Insurers (the
'ABI'). Should the Directors exercise such further authority, they
intend to comply with the ABI recommendations and stand for
re-election at the next AGM of the Company if they wish to remain
in office.
The authorities granted under this resolution replace those put
in place at the last Annual General Meeting and will expire at the
conclusion of the next Annual General Meeting of the Company or, if
earlier, 30 June 2016.
Resolution 2, which will be proposed as a special resolution and
which is subject to the passing of Resolution 1, dis-applies
Shareholders' statutory pre-emption rights in relation to
(a) the issue of the Placing Shares pursuant to the Placing;
(b) the issue of the Warrant; and
(c) the allotment of equity securities or sale of treasury
shares for cash up to an aggregate nominal value of GBP76,866.04
(being approximately 10 per cent. of the Company's issued ordinary
share capital (excluding treasury shares) as at 4 March 2016)
without first offering the securities to existing shareholders. The
resolution also dis-applies the statutory pre-emption provisions in
connection with a rights issue and allows the Directors, in the
case of a rights issue, to make appropriate arrangements in
relation to fractional entitlements or other legal or practical
problems which might arise. The authority provides the Company with
the flexibility to allot shares or other securities for cash
without first offering the securities to existing Shareholders;
however the authority will only be exercised if the Directors
consider it to be in the best interests of the Company at the
time.
The disapplication replaces those put in place at the last
Annual General Meeting and will expire at the conclusion of the
next Annual General Meeting or, if earlier, 30 June 2016.
Action to be taken
A Form of Proxy for use at the General Meeting will accompany
the Circular. The Form of Proxy should be completed and signed in
accordance with the instructions thereon and returned to the
Company's registrars, Capita Registrars Limited, The Registry, 34
Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible, but in
any event so as to be received by no later than 11.00am on 23 March
2016. The completion and return of a Form of Proxy will not
preclude Shareholders from attending the General Meeting and voting
in person should they so wish.
Directors' Recommendation
The Directors consider the Placing and Warrant issue to be in
the best interests of the Company and its Shareholders as a whole
and accordingly unanimously recommend Shareholders to vote in
favour of the Resolutions to be proposed at the General Meeting as
they intend to do so in respect of their own beneficial holdings
amounting, in aggregate, to 2,127,750 Existing Ordinary Shares,
representing approximately 2.8 per cent. of the existing issued
ordinary share capital of the Company.
Placing Statistics
Issue Price 20 p
Number of Placing Shares to
be issued 26,250,000
Total gross proceeds of the GBP5.25 million
Placing
Gross proceeds to be raised GBP1.80 million
on First Admission
Gross proceeds to be raised GBP3.45 million
on Second Admission
Proceeds receivable by the GBP5.1 million
Company, net of expenses*
Number of Existing Ordinary
Shares 76,866,039
Number of Ordinary Shares in
issue following First Admission 85,866,039
Number of Ordinary Shares in
issue following Second Admission 103,116,039
Placing Shares as a percentage
of the Existing Ordinary Shares 34.15%
*assuming Second Admission becomes effective
Expected timetable of principal events
Announcement of the Placing 7 March 2016
Explanatory Circular and Form by 11 March 2016
of Proxy posted to Shareholders
(by first class post)
Latest time and date for receipt 11.00am on 23
of Form of Proxy March 2016
General Meeting 11.00am on 29
March 2016
First Admission
8.00am on 30 March
2016
Second Admission within 5 business
days following
satisfaction or
waiver of the
FCA Consent Condition
Where applicable, expected date 30 March 2016
for CREST accounts to be credited
in respect of First Placing Shares
in uncertificated form
Where applicable, expected date by 13 April 2016
for posting of share certificates
for First Placing Shares
Definitions
"Act" the Companies Act 2006
"AIM" the market of that name operated
by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies
published by the London Stock
Exchange, as amended from time
to time
"Board" or "Directors" the directors of the Company
"Cenkos" Cenkos Securities plc, the
Company's nominated adviser
and broker
"Company" or FAIRFX Group plc, a company
"FAIRFX" incorporated and registered
in England and Wales under
the Companies Act 1985 with
registered number 8922461
"CREST" the relevant system (as defined
in the Uncertificated Securities
Regulations 2001 SI 2001:No.3755
(as amended)) in respect of
which Euroclear UK & Ireland
Limited is the operator (as
defined in those regulations)
"Crystal Amber" Crystal Amber Fund Limited,
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