TIDMOPM
RNS Number : 1968S
1PM PLC
22 September 2014
22 September 2014
1pm plc
("1pm" or "the Company")
Placing and Open Offer
1pm plc (AIM: OPM), the AIM listed specialist independent
provider of finance facilities to the SME sector, announces a share
issue to raise a total of up to c.GBP4.016 million (before
expenses) by way of:
-- an oversubscribed Placing of 4,918,032 New Ordinary Shares at
61 pence per share to the Placees to raise GBP3 million (before
expenses); and
-- a further issue of up to 1,664,963 New Ordinary Shares at 61
pence per share to Qualifying Shareholders pursuant to the Open
Offer to raise up to GBP1.016 million (before expenses)
The issue price of 61 pence per New Ordinary Share represents a
discount of 15.3 per cent. against the mid-market price of 72 pence
per share at which the Ordinary Shares were quoted on AIM as at
close of trading on 19 September 2014, the last trading day prior
to announcement of the Placing and the Open Offer.
A circular will be posted today to Shareholders (the
"Circular"). The Circular sets out in more detail the background to
and reasons for the Placing and the Open Offer and their respective
terms. All capitalised terms in this announcement are as defined in
the Circular which will be available on the Company's website:
www.1pm.co.uk
1. Background to and reasons for the Fundraising
Over the last four years the Company has transformed, from
reporting a GBP402,416 loss for the year ended 31 May 2010 through
to reporting a profit before tax of GBP1,346,524 for the year ended
31 May 2014. Over the same period, the loan book has grown from
GBP6.5m to GBP20.4m and the market capitalisation of 1pm has
increased from GBP1.5m to GBP21m.
The Board has recently adopted a strategic and operational plan
to further develop and grow the business over the next three to
four years. It is anticipated that growth will be achieved through
a combination of organic growth, new product introductions and
selective acquisitions. In order to ensure future growth, funding
is required now in order to expand and invest in the business,
specifically its business development, people, premises and
systems, as well as providing additional equity capital to further
increase the loan book and enhance both revenues and profits. The
availability of additional equity funding via the Placing and Open
Offer will enable 1pm to lend at enhanced margins and will increase
the levels of profits of the Company in comparison to an equivalent
level of debt funding. In addition it enables a balance to be
maintained in the financing of the business between debt and
equity. Furthermore the Directors believe the Placing will enable
the Company to widen its institutional share register thereby
enhancing its following in the market.
The Board believes that existing shareholders should also have
the opportunity to further invest in the Company at the same price
as those institutions who are involved in the Placing and
accordingly the Circular posted to Shareholders sets out the terms
of the Open Offer.
2. Use of proceeds
The net proceeds of the Placing and the Open Offer are expected
to be approximately GBP3.8 million (assuming full subscription
under the Open Offer). These proceeds will be applied for the
expansion in the business and to provide additional loan book
lending.
Business expansion
It is anticipated that up to GBP800,000 of the Net Proceeds will
be used for business expansion purposes. This expense will be a
combination of profit and loss and capital expenditure and will
include:
-- the cost of increased business development activity aimed at
expanding the network of brokers from whom business is
generated;
-- covering the costs of relocating to larger office premises in
Bath which can accommodate the anticipated increase in headcount
over the next three years. A suitable leasehold property has been
identified and it is expected a move can be completed by November
2014;
-- additional employee costs. The Directors expect that the
Company's headcount will increase by approximately 12 employees in
the next 12 months; and
investment in a new computer billing system that will improve
the efficiency of the day to day running of the business.
Equity for loan book
It is anticipated that at least GBP3 million of the Net Proceeds
will be available for loan book lending.
3. Details of the Placing and the Open Offer
1pm is proposing to raise GBP3m (before expenses) pursuant to
the Placing and up to a further GBP1.016m (before expenses)
pursuant to the Open Offer. The Issue Price of 61 pence per New
Ordinary Share represents a discount of 15.3 per cent. to the
Closing Price of 72 pence on 19 September 2014, the latest trading
day prior to publication of this Document.
The Placing has conditionally raised a total of GBP3 million
through the placing of 4,918,032 New Ordinary Shares with
institutional and other investors. Henderson Global Investors, a
substantial shareholder in the Company, has subscribed for
1,639,344 Placing Shares. This subscription constitutes a related
party transaction under the AIM Rules as Henderson Global Investors
currently holds 14.96 per cent. of the Existing Ordinary Shares and
is therefore a "substantial shareholder" under the AIM Rules. The
Directors consider, having consulted with WH Ireland, the Company's
nominated adviser, that the terms of Henderson's subscription are
fair and reasonable insofar as the shareholders of 1pm are
concerned.
The Open Offer is being made on a pre-emptive basis, allowing
all Qualifying Shareholders the opportunity to participate.
The Open Offer provides Qualifying Holders with the opportunity
to apply to acquire Open Offer Shares at the Issue Price pro rata
to their holdings of Existing Ordinary Shares as at the Record Date
on the following basis:
1 Open Offer Share for every 18 Existing Ordinary Shares
and so on in proportion to any other number of Existing Ordinary
Shares then held.
Entitlements to apply to acquire New Ordinary Shares will be
rounded down to the nearest whole number and any fractional
entitlement to New Ordinary Shares will be disregarded in
calculating the Basic Entitlement.
Shareholders who do not take up their Basic Entitlements in full
will experience a dilution to their interests of approximately 18
per cent. following the Fundraising (assuming full subscription
under the Open Offer). Shareholders who take up their Basic
Entitlements in full will suffer a dilution to their interests of
13.4 per cent. on the same basis.
Qualifying Shareholders should note that the Open Offer Shares
have not been placed under the Placing subject to clawback under
the Open Offer nor have they been underwritten, and that the
Placing is not conditional upon the number of applications received
under the Open Offer.
The Open Offer is subject to the satisfaction inter alia, the
following conditions on or before 20 October 2014 (or such later
date, being not later than 8.00 a.m. on 30 October 2014, as the
Company and WH Ireland may decide):
-- the Placing being unconditional in all respects; and
-- the passing of Resolutions 1 and 2 at the General Meeting (or
any adjournment thereof); and
-- Admission becoming effective by 8.00 a.m. on 20 October 2014
(or such later time or date not being later than 8.00 a.m. on 30
October 2014, as the Company and WH Ireland may decide).
The New Ordinary Shares will, when issued and fully paid, rank
pari passu in all respects with the Existing Ordinary Shares,
including the right to receive all dividends and other
distributions declared, made or paid after the date of
Admission.
Excess Applications
The Open Offer is structured to allow Qualifying Shareholders to
subscribe for Open Offer Shares at the Issue Price pro rata to
their holdings of Existing Ordinary Shares on the Record Date.
Qualifying Shareholders may also make applications in excess of
their Basic Entitlements. To the extent that Basic Entitlements are
not subscribed by Qualifying Shareholders, such Open Offer Shares
will be available to satisfy such excess applications, subject to a
maximum of 1,664,963 Open Offer Shares in aggregate. To the extent
that applications are received in respect of an aggregate of more
than 1,664,963 Open Offer Shares, excess applications will be
scaled back accordingly.
However, excess applications will be rejected if and to the
extent that acceptance would result in the Qualifying Shareholder,
together with those acting in concert with him/her/it for the
purposes of the City Code, holding 30 per cent. or more of the
Enlarged Share Capital immediately following Admission.
Those Placees who are Qualifying Shareholders will also be
entitled to participate in the Open Offer.
Qualifying Shareholders should note that the Open Offer is not a
rights issue. Qualifying non-CREST Holders should be aware that the
Application Form is not a negotiable document and cannot be traded.
Qualifying Shareholders should also be aware that, in the Open
Offer, unlike in a rights issue, any Open Offer Shares not applied
for will not be sold in the market or placed for the benefit of
Qualifying Shareholders who do not apply under the Open Offer.
Settlement and dealings
Application will be made to the London Stock Exchange for the
New Ordinary Shares to be admitted to trading on AIM. It is
expected that Admission will become effective and that dealings
will commence at 8.00 a.m. on 20 October 2014. Further information
in respect of settlement and dealings in the New Ordinary Shares is
set out in paragraph 9 of Part III of the Circular.
Overseas Shareholders
Certain Overseas Shareholders may not be permitted to subscribe
for Open Offer Shares pursuant to the Open Offer and should refer
to paragraph 6 of Part III of the Circular.
CREST instructions
Application has been made for the Basic Entitlements for
Qualifying CREST Holders to be admitted to CREST. It is expected
that the Basic Entitlements will be admitted to CREST on 23
September 2014. The Excess Entitlements will also be admitted to in
CREST on 23 September 2014. Applications through the CREST system
may only be made by the Qualifying Holder originally entitled or by
a person entitled by virtue of a bona fide market claim.
If you are a Qualifying non-CREST Holder an Application Form
which gives details of your Basic Entitlement under the Open Offer
(as shown by the number of the Open Offer Shares allocated to you)
will accompany the Circular. If you wish to apply for Open Offer
Shares under the Open Offer, you should complete the accompanying
Application Form in accordance with the procedure for application
set out in paragraph 3 of Part III of this Document and on the
Application Form itself. The completed Application Form,
accompanied by full payment, should be returned by post or by hand
(during normal business hours only) to Neville Registrars Limited,
Neville House, 18 Laurel Lane, Halesowen, West Midlands B63 3DA so
as to arrive as soon as possible and in any event no later than
5.00 p.m. on 15 October 2014.
If you are a Qualifying CREST Holder, no Application Form will
accompany the Circular but you will receive a credit to your
appropriate stock account in CREST in respect of your Basic
Entitlement and if appropriate your Excess Entitlement. You should
refer to the procedure for application set out in paragraph 3 of
Part III of this Document. The relevant CREST instruction must have
settled by no later than 5.00 p.m. on 15 October 2014.
The latest time for applications under the Open Offer to be
received is 5.00 p.m. on 15October 2014. The procedure for
application and payment depends on whether, at the time at which
application and payment is made, you have an Application Form in
respect of your Basic Entitlement or have your Basic Entitlement to
your stock account in CREST.
If you are in any doubt as to what action you should take, you
should immediately seek your own personal financial advice from
your stockbroker, bank manager, solicitor, accountant or other
independent professional adviser duly authorised under the
Financial Services and Markets Act 2000 (as amended) if you are
resident in the United Kingdom or, if not, from another appropriate
authorised independent financial adviser.
4. Current trading and prospects
The results for the year ended 31 May 2014 released on 22
September 2014 announced a profit before tax of GBP1,346,524, an
increase of 73.8 per cent. over the comparative of GBP775,287 in
2013. Revenues increased by 35.6 per. cent to GBP4,211,569 from
GBP3,106,612 in the prior year and the loan and lease portfolios
have grown by GBP476,230 and GBP5,104,063 respectively.
Trading in the current year has commenced satisfactorily and is
ahead of the equivalent period last year. In overall terms the
current financial year is now expected to be a year of modest
growth as the platform for future significant growth is
established. The investment in people, premises and systems will
impact profits growth in the current financial year and the
increased number of shares in issue following the Fundraising will
restrict earnings per share growth in the year. The benefits of the
increased investment are expected to impact in the later part of
the current financial year and into the following financial
year.
Given the strength of the 2014 results and the Board's
confidence in the Company's future prospects, the Board intends to
pay the Company's maiden dividend as a final dividend in respect of
the year ending 31 May 2015.
5. Share option incentives
The Board recognises the importance of retaining, motivating and
rewarding key Directors and staff within the Company. At present
there are no share option schemes in place for this purposes.
Therefore as soon as possible after the date of this document, it
is the Board's intention to establish appropriate share schemes for
the Directors and for staff. In aggregate there will no more than
10 per cent. of the Ordinary Share capital of the Company subject
to the share option schemes. The initial awards are expected to
amount to significantly less than this percentage. Options awarded
to the Directors will be subject to the attainment of performance
objectives.
6. General Meeting
The Circular will contain a notice convening the General Meeting
to be held at the Francis Hotel, Queens Square, Bath, BA1 2HH at
1:30 p.m. on 17 October 2014 at which resolutions will be proposed
to inter alia, approve the Placing and the Open Offer.
7. Intentions of the Directors in relation to the Fundraising
Each of the Directors (other than Ian Smith) is a Qualifying
Shareholder. Save for Maria Lewis, each has indicated their
intention to make an excess application under the Open Offer in
addition to a subscription for their Basic Entitlement under the
Open Offer.
UK Private Healthcare Limited, a company of which Ron Russell is
a director and with which he is connected by virtue of a 25 per
cent. shareholding, has an outstanding loan to the Company of
GBP380,000. This loan is repayable on demand. Mr Russell has
indicated that in order to minimise the effective dilution to his
shareholding resulting from the Fundraising, UK Private Healthcare
Limited may request that the loan is repaid and that the proceeds
(excluding any accrued interest which would be paid in cash) be
applied in subscribing for Ordinary Shares at the Issue Price. Any
such subscription would result in an issue of 622,950 Ordinary
Shares, which would be in addition to those Ordinary Shares being
issued pursuant to the Fundraising.
Placing and Open Offer statistics
Closing Price per Existing Ordinary Share on 19 September 72 pence
2014
Number of Existing Ordinary Shares in issue 29,969,329
Entitlement under the Open Offer 1 Open Offer
Share for
every 18
Existing
Ordinary
Shares
Issue Price of each New Ordinary Share 61
Discount to market price of 72 pence per Existing 15.3 per
Ordinary Share(1) cent.
Number of Open Offer Shares to be offered for subscription
by Qualifying Shareholders 1,664,963
Number of Placing Shares to be issued pursuant to
the Placing 4,918,032
Expected proceeds of the Open Offer (before expenses)(2) GBP1.016m
Expected proceeds of the Placing (before expenses) GBP3m
Expected proceeds of the Fundraising (before expenses)(2) GBP4.016m
Enlarged Share Capital following Admission(2, 3) 36,552,323
Percentage of Enlarged Share Capital represented by up to 4.55%
the Open Offer Shares(2, 3)
Percentage of Enlarged Share Capital represented by
the Placing Shares(2, 3) 13.45%
Estimated net proceeds of the Fundraising(2) up to GBP3.8m
Notes:
1. The Closing Price on AIM on 19 September 2014, being the last
practicable date prior to the publication of this Document.
2. Assuming full subscription under the Open Offer.
3. Excludes any new Ordinary Shares which may be issued in
connection with the repayment of the Loan described in paragraph 8
of Part 1 of the Circular
Expected timetable of principal events
2014
Record Date for the Open Offer 5.00 p.m. on 18
September
Announcement of the Placing and Open Offer 22 September
Existing Ordinary Shares marked "ex" by the 22 September
London Stock Exchange
Basic Entitlements credited to stock accounts 23 September
in CREST of Qualifying CREST Holders
Recommended latest time for requesting withdrawal 4.30 p.m. on 12
of Basic Entitlements from CREST October
Latest time for depositing Basic Entitlements 3.00 p.m. on 13
and/or Excess Entitlements into CREST October
Latest time and date for splitting of Application 3.00 p.m. on 13
Forms (to satisfy bona fide market claims October
only)
Latest time and date for receipt of completed 5.00 p.m. on 15
Application Forms and payment in full under October
the Open Offer or settlement of relevant CREST
instruction (as appropriate)
Latest time and date for receipt of Forms 1.30 p.m. on 15
of Proxy October
Annual General Meeting 12.30 p.m. on 17
October
General Meeting 1.30 p.m. on 17
October
Admission and commencement of dealings of 20 October
the Placing Shares and the Open Offer Shares
New Ordinary Shares credited to CREST stock 20 October
accounts
Despatch of definitive share certificates week commencing
for New Ordinary Shares 27 October
For further information, please
contact:
1pm plc
Ian Smith, Chairman 0844 967 0944
Maria Lewis, CEO 0844 967 0944
WH Ireland (NOMAD)
Mike Coe / Ed Allsopp 0117 945 3470
Winningtons Financial PR 0117 985 8989
Paul Vann 07768 807631
paul.vann@winningtons.co.uk
About 1pm:
At the second Annual Small Cap Awards held in May 2014, the
Company won two awards including the most prestigious category
"Company of the Year". Chief Executive, Maria Lewis and Finance
Director, Helen Walker were also jointly awarded Small Cap
Executive Director of the Year.
The Company was admitted to AIM in August 2006.
1pm plc is an established independent finance company focused on
providing SMEs with accessible funding to add value to their
businesses. All customers must have good credit histories and
proven ability to repay their finance commitments.
1pm currently provides assets finance from GBP1,000 to GBP50,000
for a period of between 12 and 60 months and GBP1,000 to GBP25,000
for business loans (repaid over 3-36 months).
Mission Statement - 'Helping the UK economy grow by supporting
SMEs'
More information is available on the Company website
www.1pm.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
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