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RNS Number : 4618O

Boxhill Technologies PLC

30 January 2019

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

30 January 2019

BOXHILL TECHNOLOGIES PLC

("Boxhill", the "Group" or the "Company")

Trading & Corporate Update, Return from Suspension & Board Changes

The Board of Directors of the Company (the "Board") is pleased to provide the following trading statement and update on recent developments (the "Update").

Corporate Update

Boxhill is pleased to announce the publication of its audited annual report and accounts for the year to 31 January 2018 (the "Annual Report") both in an announcement released at 7.00 am today (the "Announcement") and on the Company's website, in accordance with its articles of association. Concurrent with the release of the Update and the Announcement, the Company is also releasing the unaudited six-month accounts for the period to 31 July 2018 (the "Interims").

The Annual Report has variations to the unaudited preliminary results announced on 30 July 2018. The variation is due to the treatment of and the impact of the disposal of Emex (as announced and defined in the announcement of 12 July 2018 and approved by shareholders at the General Meeting held on 30 July 2018), and as indicated in the Strategic Report section of the Annual Report, the Board's decision not to capitalise significant expenditure relating to the development of internal systems. This has had a material effect on the company's performance for 2018.

In summary, for the year to 31 January 2018 the Group performance was as follows:

   --     Revenue : GBP1,367,000 (2017: GBP1,727,000) 
   --     Gross Profit : GBP914,000 (2017: GBP1,165,000) 
   --     EBITDA : Loss of GBP1,628,000 (2017: Profit of GBP38,000) 
   --     Depreciation & Amortisation : GBP122,000 (2017: GBP26,000) 
   --     (Loss)/profit before tax : Loss of GBP1,751,000 (2017: Profit of GBP2,000) 

Further detail on the performance in the year to 31 January 2018 can be found in the Annual Report and the Announcement.

The Interims show an unaudited profit before tax of GBP2,793,000 for the six-month period to 31 July 2018 following the disposal of Emex.

The Board intends to re-convene during February 2019 the adjourned Annual General Meeting held on 31 July 2018 and lay the accounts for the year to 31 January 2018 before shareholders (the "AGM"). The Board also proposes to call a General Meeting, to be held immediately after the AGM (the "GM"). The Board intends to publish a notice of both the adjourned AGM and GM shortly.

At the GM, the Board will propose resolutions for the following matters:

-- Prior to the suspension of the Company's ordinary shares of 0.1 pence each ("Ordinary Shares") on 1 August 2018 (the "Suspension"), the Ordinary Shares were trading at a 55 per cent. Discount to their nominal value. Following discussion with the Company's financial adviser, the Board will propose a share capital restructuring. This will consist of a sub-division of each Ordinary Share into one new ordinary share of 0.001 pence each ("Interim Ordinary Shares") and one deferred share of 0.099 pence each ("Deferred Shares"), followed by a consolidation of every 1,000 Interim Ordinary Shares into one consolidated new ordinary share of 1 pence each ("New Ordinary Shares"). Therefore, it will be proposed at the GM that the existing 2,815,829,770 Ordinary Shares will become 2,815,829 New Ordinary Shares and 2,815,829,770 Deferred Shares (the "Restructuring"). The Deferred Shares are expected to have no value. The Board considers that having nearly three billion shares issued has created a negative perception of the Company and also exposes shareholders to undue volatility. Accordingly, the Restructuring is proposed with a view to improving the liquidity and perception of the New Ordinary Shares.

   --     The Board proposes to change the name of the Company to St. James House PLC. 

A further announcement will be made when the circular to shareholders containing the above proposals and the notice of both the adjourned AGM and GM is published.

Trading Update

Prize Provision Services Ltd. ("PPS"), which operates as an External Lottery Manager licensed by the Gambling Commission, has seen steady growth since July 2018 as a result of continued system and process upgrades in conjunction with sales and account management activity.

Sports Club Lottery, official partner of Nottinghamshire FA, has launched new lotteries for several new sports clubs and is providing administration services for hundreds of sports clubs throughout Great Britain.

The lottery for the large membership organisation announced on 1 November 2018, has been through its initiation phase with the launch of a dedicated website and completed test marketing activities. Throughout 2019 a series of key marketing activities tailored to appeal to the members of the organisation have been planned and scheduled to encourage member enrolment into the lottery.

In addition, PPS is planning new products to further increase the capability for participating societies and charities to raise funds. A scratch card product has recently been launched and will be made available to all PPS clients. Expected to retail at GBP1 with a GBP1,000 top prize, the scratch-cards are expected to best benefit those societies who regularly meet face to face with supporters in any environment and offer an impulse purchase which a subscription lottery does not.

Progress at Market Access Ltd., the Group's payment and foreign exchange ("FX") business ("Market Access"), has seen the award of an important licence in Mauritius, new banking relationships and the soft launch of the Market Access FX platform to small number of select clients. The feedback from those early clients is positive and the wider roll out of the FX platform, supported by increased sales and marketing activity begins in 2019.

The new Market Access M3 system, which incorporates the Timegrand software (detailed in the announcement of 10 April 2017) and brings together international payments, FX and merchant services, is now operational. Market Access has signed contracts for its initial low and medium risk card processing clients and the integration process is almost complete, with meaningful revenues expected to begin in the near future.

The ongoing commercial arrangement between Market Access and Emex that was outlined in the announcement of 12 July 2018 has been delayed in becoming operational due to circumstances within Emex that have arisen after the disposal of Emex was completed on 20 July 2018, in particular:

   --     Emex Technologies Ltd being placed into administration on 5 September 2018; and 

-- The establishment that the historic relationship between the Group and Net World Ltd, a company incorporated in Mauritius ("NetWorld") was one of contract rather than ownership, and thus that as part of the Emex disposal, MDC Nominees Ltd acquired contractual as opposed to beneficial indirect equity rights over NetWorld.

The commencement of payments into the sinking fund outlined in the announcement of 12 July 2018 has therefore been delayed, however the Board remain confident that the Company will receive the full GBP2,000,000 repayment of the Loan Note (as defined in the announcement of 12 July 2018) within the ten-year term of the Loan Note.

AstroKings, the all-weather soccer pitch business located in Nottingham in which the Group holds a carried interest through its Soccerdome Ltd subsidiary, is seeing the benefit from both improvements to the physical infrastructure and improved marketing, however it is not expected to make a material contribution to the Group's finances in the short or medium term.

Return from Suspension

Following the publication of the Annual Report and the announcement of the Interims, the Company has requested that trading in its Ordinary Shares resumes on AIM at 7.30 am today.

Board Changes

The Company is pleased to announce the appointment to the Board of Graeme Paton as Chief Executive Officer and Cath McCormick as Finance Director with effect from 30 January 2019.

Graeme joined the group as part of the acquisition in 2016 of Emex, and since then he has held the position of Chief Technology Officer within the Payments Division of the Group. Having founded and built an international road transport and distribution business between 1986 and 2003, Graeme has focussed on the technology sector for the last 15 years. Over the last two years, Graeme has overseen the integration of the different technologies utilised within the Group into a platform the Board believe has great potential for the future.

Cath also joined the Group in 2016 as Financial Controller. A Chartered Management Accountant, Cath has worked in the finance departments of financial services companies for over 20 years, starting her career with Cooperative Insurance Society before moving to Arrow Global (formerly Capquest), a leader in the secondary consumer debt purchase sector. Cath has been responsible for the day-to-day operation of the Group's financial and management accounting function for over two years.

Andrew Flitcroft is stepping down from the Board with effect from 1 February 2019 but will continue to act as Company Secretary for Boxhill.

The Company also confirms that Clive Hyman (Non-Executive Director) and Tim Razzall (Executive Chairman) will not be seeking re-election at the Annual General Meeting for the year to 31 January 2019, which is expected to be held in June or July 2019. The Company will seek to recruit a Non-Executive Chairman and Senior Independent Non-Executive Director during the intervening period.

For further information, contact:

 
 Boxhill Technologies PLC 
  Lord Razzall, Executive Chairman 
  Website www.boxhillplc.com             020 7493 9644 
 Allenby Capital Limited 
  (Nomad, Financial Adviser & Broker) 
  John Depasquale / Nick Harriss         020 3328 5656 
 

Disclosures pursuant to Rule 17 and Schedule 2 (g) of the AIM Rules for Companies in respect of the appointments of Graeme David Paton and Catherine Anne McCormick are set out below:

Graeme David Paton

Age 53

Current Directorships and Partnerships

Global Wine Distributors Limited

Thisway Scot Limited

Timegrand Limited (Group company)

Former Directorships and Partnerships within the last five years

Drumpellier and Mount Vernon Estates Limited

EmexConsult Ltd (former Group company)

Emex Technologies Limited (former Group company)

Emex (UK) Group Limited (former Group company)

Launch Digital Ltd

Nationwide Auto Enrolment Limited

Emex Technologies Limited was placed into administration on 5 September 2018. Mr Paton was a director between 12 December 2017 and 30 July 2018. Emex Technologies Limited was a subsidiary of Boxhill from 31 January 2016 to 30 July 2018. The administration remains in process and the final quantum of losses to creditors is not clear at this time.

Mr Paton owns 25,000,000 Ordinary Shares in the Company representing 0.89 per cent. of the Company's existing issued share capital.

Catherine Ann McCormick

Previous surname - Robinson-McCormick

Age 44

Current Directorships and Partnerships

Catherine McCormick Financial Consulting Limited

St. James House Ltd (Group company)

Former Directorships and Partnerships within the last five years

Market Access Ltd (Group company)

Ms McCormick holds options over 20,000,000 Ordinary Shares

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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January 30, 2019 02:00 ET (07:00 GMT)