TIDMFA.
RNS Number : 2684X
FireAngel Safety Technology Group
30 April 2021
The following amendment has been made to the ' Placings and Open
Offer' announcement released on 30 April 2021 at 7.00 a.m. under
RNS No 1510X.
The date underlined in the following sentence has been changed
from "June 2022" to "2024" within the body of the announcement:
"Thereafter, once production of the next generation smoke alarm
has commenced, a royalty fee per product will be payable to the
Company as the manufacturing partner, with a multi-million volume
fee agreed for the initial thirty months, with a minimum royalty
fee commitment of EUR3.0 million (estimated to exceed GBP1.0
million by 2024)."
All other details remain unchanged.
The full amended text is shown below.
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION STIPULATED UNDER THE
MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR") AND THE RETAINED
UK LAW VERSION OF MAR PURSUANT TO THE MARKET ABUSE (AMMENT) (EU
EXIT) REGULATIONS 2019 (SI 2019/310) ("UK MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION
SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE
PUBLIC DOMAIN.
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, THE REPUBLIC OF
SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
FURTHER, THIS ANNOUNCEMENT IS MADE FOR INFORMATION PURPOSES ONLY
AND DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR SOLICITATION
TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE SHARES IN FIREANGEL
SAFETY TECHNOLOGY GROUP PLC IN ANY JURISDICTION IN WHICH ANY SUCH
OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE IN THE
UNITED STATES. THE SECURITIES DISCUSSED HEREIN HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMED
(THE "US SECURITIES ACT") AND MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION
UNDER THE US SECURITIES ACT. NO PUBLIC OFFERING OF THE SECURITIES
DISCUSSED HEREIN IS BEING MADE IN THE UNITED STATES.
30 April 2021
FireAngel Safety Technology Group plc
('FireAngel', the 'Group' or the 'Company')
Firm Placing of 16,093,279 New Ordinary Shares
and
Open Offer of up to 38,351,165 New Ordinary Shares
and
Conditional Placing of up to 38,351,165 New Ordinary Shares,
in each case at 18 pence per New Ordinary Share
FireAngel (AIM: FA.), a leading developer and supplier of home
safety products, is pleased to announce that it is proposing to
undertake an Open Offer to raise up to approximately GBP6.9
million, on the basis of 10 Open Offer Shares for every 33 Existing
Ordinary Shares held on the Record Date, at an issue price of 18
pence per New Ordinary Share (the "Issue Price").
In addition, the Company announces that it has conditionally
raised:-
-- approximately GBP2.9 million (before expenses) by means of
the Firm Placing with certain existing Shareholders and new
investors of 16,093,279 New Ordinary Shares at the Issue Price;
and
-- up to approximately GBP6.9 million (before expenses) by means
of the Conditional Placing with certain existing Shareholders and
new investors of 38,351,165 New Ordinary Shares at the Issue Price,
subject to clawback under the Open Offer.
Highlights
-- Open Offer to raise up to approximately GBP6.9 million on the
basis of 10 Open Offer Shares for every 33 Existing Ordinary Shares
held on the Record Date, at an issue price of 18 pence per New
Ordinary Share
-- In addition, the Company announces that it has conditionally raised:-
o approximately GBP2.9 million (before expenses) by means of the
Firm Placing with certain existing Shareholders and new investors
of 16,093,279 New Ordinary Shares at the Issue Price
o up to approximately GBP6.9 million (before expenses) by means
of the Conditional Placing with certain existing Shareholders and
new investors of 38,351,165 New Ordinary Shares at the Issue Price,
subject to clawback under the Open Offer
-- The net proceeds of the Fundraising will be used as follows:
o to fund research and development to accelerate new products
and to implement efficiency improvements and cost savings; and
o to strengthen the Company's balance sheet, including
optimising the Company's working capital, in respect of stock and
payables and to fund part of the legacy battery returns issue.
-- The Issue Price represents a discount of approximately 19.6
per cent. to the Closing Price of 22.4 pence on 29 April 2021, the
Business Day prior to the date of this announcement.
The Firm Placing and the Conditional Placing are being arranged
by Shore Capital Stockbrokers and N+1 Singer acting as joint
bookrunners to the Company. N+1 Singer has been appointed joint
broker to the Company with immediate effect.
The above Fundraising highlights and the summary announcement
below should be read in conjunction with the full text of the
announcement below.
A circular (and, in the case of Qualifying Non-CREST
Shareholders, an Application Form) in connection with the Open
Offer and containing details of the Fundraising, is expected to be
posted to Shareholders later today (the "Circular"). Capitalised
terms in this announcement are defined as set out at the end of
this announcement. The Circular will be available on the Company's
website, www.fireangeltech.com .
It should be noted that New Ordinary Shares will only be issued
pursuant to the Conditional Placing if and to the extent that the
Open Offer is not subscribed in full by holders of Existing
Ordinary Shares and will result in a maximum of 54,444,444 New
Ordinary Shares being issued pursuant to the Fundraising.
Furthermore, the Open Offer is not conditional on completion of the
Placing.
The Issue Price of 18 pence represents a discount of
approximately 19.6 per cent. to the Closing Price on 29 April 2021,
being the last Business Day prior to this announcement. The
Fundraising is not being underwritten and is conditional on, inter
alia, Admission becoming effective by no later than 8.00 a.m. on 20
May 2021 (or such other time and/or date, being no later than 4
June 2021, as the Company, Shore Capital & Corporate and the
Joint Brokers may agree). It is expected that the New Ordinary
Shares will be admitted to trading on AIM on or around 8.00 a.m. on
20 May 2021.
Application will be made to the London Stock Exchange for the
New Ordinary Shares to be admitted to trading on AIM. The New
Ordinary Shares will 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 in respect
of the Ordinary Shares following Admission.
John Conoley, Executive Chairman of FireAngel, commented :
"FireAngel has a compelling proposition to protect and save lives
with innovative, cutting-edge home safety technology. The funds we
are raising will provide working capital for the next stage of our
development, allowing us to execute our strategy, accelerate growth
in sales and margin and ultimately enhance shareholder value. I
would like to thank our existing shareholders for their support and
welcome new investors to our business. The Company has made a good
start to 2021 and I believe that there is real momentum in the
business."
For further information, please contact:
FireAngel Safety Technology
Group plc 024 7771 7700
John Conoley, Executive Chairman
Zoe Fox, Chief Financial Officer
Shore Capital (Nominated adviser
and joint broker) 020 7408 4050
Tom Griffiths/David Coaten
N+1 Singer (Joint broker)
Rick Thompson/Alex Bond 020 7496 3000
Houston (Financial PR) 0204 529 0549
Kate Hoare/Laura Stewart
Notes to Editors
About FireAngel Safety Technology Group plc
FireAngel's mission is to protect and save lives by making
innovative, leading-edge home safety products which are simple and
accessible. FireAngel is one of the market leaders in the European
home safety products market.
FireAngel's principal products are connected smoke alarms, CO
alarms, heat alarms and accessories. The Company has an extensive
portfolio of patented intellectual property in Europe, the US and
other selected territories. Products are sold under FireAngel's
leading brands of FireAngel, FireAngel Pro, FireAngel Specification
and AngelEye.
For further product information, please visit:
www.fireangeltech.com
IMPORTANT INFORMATION
Shore Capital and Corporate Limited ("Shore Capital &
Corporate"), which is authorised and regulated in the UK by the
FCA, is acting as nominated adviser to the Company in connection
with the matters described in this announcement and is not acting
for any other persons in relation to the Fundraising and Admission.
Shore Capital & Corporate is acting exclusively for the Company
and for no one else in relation to the contents of this
announcement and persons receiving this announcement should note
that Shore Capital & Corporate will not be responsible to
anyone other than the Company for providing the protections
afforded to clients of Shore Capital & Corporate or for
advising any other person on the arrangements described in this
announcement. The responsibilities of Shore Capital & Corporate
as the Company's nominated adviser under the AIM Rules for
Companies and the AIM Rules for Nominated Advisers are owed solely
to the London Stock Exchange and are not owed to the Company or to
any Director, Shareholder or other person in respect of his
decision to acquire shares in the capital of the Company in
reliance on any part of this announcement and/or the Application
Form, or otherwise.
Shore Capital Stockbrokers Limited ("Shore Capital Stockbrokers"
and together with Shore Capital & Corporate, "Shore Capital")
and Nplus1 Singer Capital Markets Limited (together with its
affiliated entities) ("N+1 Singer" and, together with Shore Capital
Stockbrokers, the "Joint Brokers"), which are authorised and
regulated in the UK by the FCA, are acting as joint brokers to the
Company in connection with the matters described in this
announcement and are not acting for any other persons in relation
to the Fundraising and Admission. The Joint Brokers are acting
exclusively for the Company and for no one else in relation to the
contents of this announcement and persons receiving this
announcement should note that the Joint Brokers will not be
responsible to anyone other than the Company for providing the
protections afforded to their clients or for advising any other
person on the arrangements described in this announcement. The
responsibilities of each of the Joint Brokers as the Company's
brokers under the AIM Rules are owed solely to the London Stock
Exchange and are not owed to the Company or to any Director,
Shareholder or other person in respect of their decision to acquire
shares in the capital of the Company in reliance on any part of
this announcement and/or the Application Form, or otherwise.
This announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
current expectations and projections about future events. These
statements, which sometimes use words such as "anticipate",
"believe", "intend", "estimate", "expect" and words of similar
meaning, reflect the Directors' beliefs and expectations and
involve a number of risks, uncertainties and assumptions that could
cause actual results and performance to differ materially from any
expected future results or performance expressed or implied by any
such forward-looking statement. Statements contained in this
announcement regarding past trends or activities should not be
taken as a representation that such trends or activities will
continue in the future. The information contained in this
announcement is subject to change without notice and neither Shore
Capital, N+1 Singer nor, except as required by applicable law, the
Company assumes any responsibility or obligation to update publicly
or review any of the forward-looking statements contained herein.
You should not place undue reliance on forward-looking statements,
which speak only as of the date of this announcement.
Information to Distributors
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 New Ordinary Shares have been subject to a product approval
process, which has determined that the New Ordinary Shares are: (i)
compatible with an end target market of retail investors and
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 "Target Market Assessment").
Notwithstanding the Target Market Assessment, Distributors
should note that: the price of the New Ordinary Shares may decline
and investors could lose all or part of their investment; the New
Ordinary Shares offer no guaranteed income and no capital
protection; and an investment in the New 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.
The Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling
restrictions in relation to the Fundraising. Furthermore, it is
noted that, notwithstanding the Target Market Assessment, Shore
Capital will only procure investors who meet the criteria of
professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; 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 New Ordinary
Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the New Ordinary Shares and
determining appropriate distribution channels.
Firm Placing of 16,093,279 New Ordinary Shares
and
Open Offer of up to 38,351,165 New Ordinary Shares
and
Conditional Placing of up to 38,351,165 New Ordinary Shares,
in each case at 18 pence per New Ordinary Share
1. Introduction
The Company announces that it is proposing to undertake an Open
Offer to raise up to approximately GBP6.9 million, on the basis of
10 Open Offer Shares for every 33 Existing Ordinary Shares held on
the Record Date, at an issue price of 18 pence per New Ordinary
Share.
In addition, the Company announces that it has conditionally
raised:
-- approximately GBP2.9 million (before expenses) by means of
the Firm Placing with certain existing Shareholders and new
investors of 16,093,279 New Ordinary Shares at the Issue Price;
and
-- up to approximately GBP6.9 million (before expenses) by means
of the Conditional Placing with certain existing Shareholders and
new investors of 38,351,165 New Ordinary Shares at the Issue Price,
subject to clawback under the Open Offer.
It should be noted that New Ordinary Shares will only be issued
pursuant to the Conditional Placing if and to the extent that the
Open Offer is not subscribed in full by holders of Existing
Ordinary Shares and will result in up to 54,444,444 New Ordinary
Shares being issued pursuant to the Fundraising. The Open Offer is
not conditional on completion of the Firm Placing or Conditional
Placing. The Firm Placing and Conditional Placing are conditional,
inter alia, on the Placing Agreement between the Company, Shore
Capital & Corporate and the Joint Brokers becoming
unconditional and not being terminated (in accordance with its
terms).
The Firm Placing of the Firm Placing Shares and the Conditional
Placing of the Conditional Placing Shares has been arranged by
Shore Capital Stockbrokers and N+1 Singer acting as joint brokers
to the Company.
The Issue Price of 18 pence represents a discount of
approximately 19.6 per cent. to the Closing Price on 29 April 2021,
being the latest practicable date prior to the date of this
announcement. The Fundraising is conditional on, inter alia,
Admission becoming effective by no later than 8.00 a.m. on 20 May
2021 (or such other time and/or date as the Company, Shore Capital
& Corporate and the Joint Brokers may agree). It is expected
that the New Ordinary Shares will be admitted to trading on AIM on
or around 8.00 a.m. on 20 May 2021.
It is proposed that the Net Proceeds will be used, in part, to
fund research and development to accelerate new products, implement
efficiencies, improvements and cost savings, strengthen the
Company's balance sheet, including optimising the Company's working
capital position in respect of stock and payables, and fund part of
the legacy battery warranty returns. Further details of the
intended use of the Net Proceeds can be found in paragraph 6
below.
2. Background to, and reasons for, the Fundraising
The Group entered 2020 with positive momentum in its strategic
priorities, including strong growth (having now sold in excess of
70 million alarms since its incorporation), an increasing
higher-value pipeline and initial progression on gross margin
performance.
Undoubtedly, the onset of the Covid-19 pandemic and resultant
Government restrictions significantly disrupted this journey, as it
has for so many companies and, of course, for so many individuals.
Nevertheless, it was encouraging to see a recovery in performance
in the second half of the last financial year. For instance, with
approximately 61 per cent. of 2020 UK Trade sales were recorded in
the second half of the year, and the operational progress made
provides a strong platform for further improvement in 2021.
The Group achieved its budget for revenue and gross margin in Q1
2021, despite continued lockdown restrictions, particularly in
those EU countries in which the Group operates and Scotland. In
particular, after reopening in late 2020, UK Trade and Retail
accelerated and generated record sales in Q1 2021, which were 30
per cent. higher than in the corresponding period in 2020. The UK
Government's roadmap out of lockdown gives the Board clarity and
confidence in its plans for the year ahead and beyond. The
Directors believe that the growth in the Group's sales of Connected
Homes technology is forecast to continue. This increasing momentum
in Connected Homes technology in Q1 2021 is further evidenced
by:
-- growing sales volumes;
-- the partnership signed by the Company in April 2021 with a
German energy efficiency service provider, further details of which
are set out below; and
-- an initial order of GBP1.0 million to rollout "Internet of
Things" alarm technology for the London Borough of Ealing.
The Board's overriding priority is to return the Group to
profitability and for it to become cash generative. The Board
considers that this can be achieved through a combination of
enacting a gross margin improvement plan, together with the rollout
into the market of its Connected Homes technology and of newer
generations of alarm, whilst maintaining the Group's leading
position in the retail markets it serves and in its growing Trade
business in the UK and Europe.
In March 2021, the Group refinanced its existing Coronavirus
Large Business Interruption Loan Scheme ("CLBILS"). As the Group's
revenue dropped below GBP45.0 million, the CLBILS (which had been
reduced to GBP2.0 million at the end of March 2021) has been
refinanced under the Coronavirus Business Interruption Loan Scheme
("CBILS") with HSBC UK. The new loan of, in aggregate, GBP3.7
million (the "New Loan") comprises a CBILS loan of GBP3.2 million
and an additional Receivables Finance CBILS of GBP0.5 million. The
New Loan, which will be used to pay off the balance of the CLBILS,
has a term of six years with the first year being free of interest
and capital repayments, and an interest rate thereafter of 3.99 per
cent. over the Bank of England's base rate.
The Company also announces today its audited final results for
the year ended 31 December 2020, further details of which are set
out below. The revenue outturn was GBP39.9 million, which was 12
per cent. lower than in the prior year (2019: GBP45.5 million).
Whilst the Board was satisfied with the revenue performance given
the challenging market backdrop, its plans to improve margin during
2020 were undermined by Covid-19 and the UK Government
restrictions. Many of the newer or growing revenue streams in UK
Trade and from social housing that the Group aimed to pursue during
2020 became temporarily unfeasible during the various UK lockdowns
as a result of the impact of UK Government restrictions, with
customers and business partners unsurprisingly focused on their own
important priorities due to Covid-19.
However, the improvements that were made last year are not lost,
and the Directors believe that the market opportunity, in
particular with the Group's Connected Homes technology, is
undiminished and indeed strengthened by the growing regulatory
tailwinds with awareness being raised by the Grenfell enquiry which
has led to more enquiries being received by the Group. The Group's
task now is to regain momentum and deliver its Connected Homes
strategy, targeting new types of business while continuing to
improve margin. The Board sees a clear path to strong sales and
margin growth in the short and medium term.
Margin improvement
As referred to above, the overriding planned output of the
Group's activity in each of 2021, 2022 and 2023 is to improve the
gross margin significantly year-on-year. The Directors believe that
the Group will do this by leveraging its differentiation, which
includes its Connected Homes technology, further details of which
are set out below. The three key strands to achieve this are:
-- moving to higher value activities;
-- better quality sales of connected propositions; and
-- improving the Group's value chain.
These strands are already producing financial benefits, and the
Directors believe that there remains significant opportunity in all
three areas. The Company spent much of otherwise lost time in the
various lockdowns in 2020 refining and delivering its plans against
this priority, and expects to see a GBP0.1 million impact to gross
profit in 2021 and transformational gross margin enhancement from
2022 onwards, with a total estimated GBP3.0 million impact on gross
profit.
1. Moving to higher value activities
This is closely allied with improving the Group's value chain,
details of which are set out below. As part of this focus, the
Board has reviewed the economic potential of the Group's
stock-keeping units ("SKUs") and considers that some of the Group's
lower value alarms are uneconomic and divert development,
maintenance and people costs into an area where it cannot command
sufficient gross margin. This has led the Board to resolve to
reduce the Group's SKUs by a third over the year to Q1 2021. Most
of that reduction is in those SKUs which generate little sales
volume, but add complexity to the business and supply chain.
Furthermore, the Directors believe that several additional low-end
SKUs can be made economic by partnering with an existing
high-quality technology partner of the Group with relevant
technology and adding the Group's brand and external design. The
Directors consider that this will generate much better margin on a
subset of the Group's product range while maintaining range
coverage, without the continual overhead of the Group having to
design from scratch and subsequent maintenance. The full-year
benefit of this new approach to low-end SKUs is expected to be over
GBP1.0 million of gross profit in 2022, depending on exchange
rate.
Looking further ahead, the Group's design philosophy has
changed. A redesign of the Group's higher value product lines will
enable the use of automation in the production line which, the
Board believes, will in turn improve yields and quality, and allow
the refresh of components. Given the Group's historic investment in
research, the Directors believe that this is much more of a design
exercise and opens the door to flexibility in the factory
environment-as well as flexibility of the factory location
itself-and, crucially, a further significant opportunity for margin
improvement in 2023 onwards.
As a result, the Group can then focus its direct costs on its
differentiated and Connected Homes technology, which is higher
value, has higher margin potential and crucially is fundamental to
its longer term Connected Homes strategy. The Directors see the
Connected Homes technology as a significant value growth
opportunity, in part because there is a growing demand for the
highest level of protection and maintenance, which the Directors
believe can best be delivered through connected technology.
Furthermore, by the end of 2021, higher value products remaining
in higher cost economies will benefit from better manufacturing
focus, opening the door to technology and commercial partnerships.
This will also offer a longer-term efficiency of research and
development investment, as the Group is able to focus in-house only
on activities with higher economic value, such as Connected Homes,
"Internet of Things", software and firmware. The Group employs a
sales model more closely aligned with IT hardware and software
sales, rather than a retail sales model.
An example of the Group's emphasis on focusing more on higher
value activities was the signing in April 2021 of an exclusive long
term partnership agreement with a German energy efficiency service
provider of approximately 12 million apartments worldwide (the
"Partner"), which was enabled by a greater emphasis by the Group on
formal internal processes. Under this partnership, the Group will
provide a fully funded research and development programme for what
the Directors expect to be a next generation 10-year smoke alarm.
Pursuant to the terms of the agreement, the Partner will fund the
development phase of the next generation smoke alarm. In addition,
the Company will receive a fee of GBP1.4 million for the use of its
background IP during the development phase. Thereafter, once
production of the next generation smoke alarm has commenced, a
royalty fee per product will be payable to the Company as the
manufacturing partner, with a multi-million volume fee agreed for
the initial thirty months, with a minimum royalty fee commitment of
EUR3.0 million (estimated to exceed GBP1.0 million by 2024).
Manufacturing of the next generation smoke alarm is expected to
commence in early 2024. The Partner has provided an initial
forecast of seven million new devices to be produced. On this
basis, the Directors believe that the Company should earn up to
EUR21.0 million in royalty and manufacturing partner fees during
the life of the partnership, with an estimated impact to gross
profit in 2021 of GBP0.6 million.
2. Better quality sales of connected propositions
Commercialising the Group's significant investment in its
Connected Homes technology means selling more connected alarms,
while learning what part data generation could play in adding a new
layer to the Group's future activities and revenue streams. The
Company saw greater traction in its online sales over the course of
2020, a shift that the Directors expect to be permanent, as buying
habits and legislation continue to evolve. The Directors believe
that the online retail environment is a medium that suits the
Group's domestic connected products well and the trend seen in 2020
has continued in Q1 2021.
Furthermore, commercialising also means re-establishing the
momentum the Company had achieved in the form of trials and
potential sales of large opportunities, particularly in social
housing, which was unavoidably lost in 2020 following the onset of
Covid-19. In the early months of 2021, the Company is already
gaining traction and has seen increased sales of its interconnected
alarms. The Board believes that the Company's technology will help
make people and properties safer by alerting people to fire and CO
incidents faster.
Moreover, there is an extra level to the Group's Predict(TM)
product which enables the gathering of data from those alarms and
the ability to manage fire risks through a dashboard. This
dashboard can present unique behavioural data received from
interconnected alarms (including both FireAngel Gateway devices and
third-party devices) to the customer, allowing them to manage risks
or risky behaviour related to fire safety. The Group's consumer
app, the FireAngel Connected App, saw approximately 770 per cent.
growth in active users over the 10 months between June 2020 and
March 2021. Sensor data can provide a fuller picture of
environmental factors which affect users' quality of life or
behaviour.
A highlight of the Group's performance in 2020 was the receipt
of a purchase order on behalf of Ealing Borough Council, the first
phase of which will generate approximately GBP1.0 million of
revenue for the Group. While rollout under the contract was
inevitably delayed significantly due to the winter lockdown, it has
now begun and the first block of flats is live. A further 21 blocks
of flats have been surveyed with a bulk "call-off" purchase order
now planned for 400 properties per month from June 2021.
3. Improving the Group's value chain
While the Group's planned value chain improvements are primarily
small-scale, numerous operational initiatives intended to make it
more efficient are already underway. By way of example, 2021 will
see the Group switch from polyethylene terephthalate (PET)
packaging to lower cost cardboard packaging (with an estimated
GBP0.49 million gross profit impact for the year ending 31 December
2021). In 2020, the Group centralised three disparate UK warehouses
into one location. Further, in Q2 2021, the Group plans to complete
a transition to automated sales order processing, support and other
internal administration. Together, the Board considers that these
many small projects will enable the Group to provide a smoother,
more joined-up, end-to-end, process, from concept to production to
service. The Board expects these operational improvements to save
approximately GBP1.0 million in gross profit per year from
2021.
In the medium term, the Group is redesigning and repackaging its
mainstream ranges to enable a longer component lifecycle and
manufacture by designing for modular products to be assembled in a
predominantly automated environment, insulating against labour cost
increases and also lead to some range repositioning benefits. This
modular product platform is expected to lower the bill of materials
(BoM) cost and result in fewer components, less handling and
improved quality. This project will focus on development and
modernisation, building on the Group's existing IP and research,
yet taking opportunities to add new components or functionality as
required. In addition, implementation of modern Product Lifecycle
management techniques will enable the Group to control this process
far more effectively than it has done historically.
Summary of expected Gross Margin improvement journey
As set out in sub-paragraph 2 above, increasing the sales of
higher margin products is critical to the achievement of the
Group's gross margin improvement programme. The Group achieved
gross margin of 19 per cent. in the year ended 31 December 2019 and
approximately 20 per cent. in the year ended 31 December 2020, and
is targeting gross margin of up to 25 per cent. in 2021, up to 29
per cent. in 2022, up to 33 per cent in 2023 and up to 35 per cent
in 2024.
The transition from the Group's so called 'old world' products
and practices to the 'new world' higher margin product ranges has
begun and is well advanced. By way of example, the Directors
believe that typical purchases in the 'old world' comprise either
(i) traditional DIY retail of one to two stand alone alarms with a
typical transaction value of GBP10 to GBP20 at a low double digit
gross margin (around 10 per cent); or (ii) traditional Trade of two
to four stand alone alarms with a typical transaction value of
GBP40 to GBP50 at a higher double digit gross margin (around 35 per
cent).
The Directors believe that typical purchases in the 'new world'
comprise: (i) online retail of four connected alarms plus an app
with a typical transaction value of GBP110; (ii) inter-connected
Trade of four to seven interconnected alarms with a typical
transaction value of GBP150; and (iii) connected social housing,
including Predict(TM) , along the lines of the London Borough of
Ealing rollout referred to above, of six alarms, a gateway and a
subscription thereby generating recurring revenue for the Group,
with a typical transaction value of GBP200 to GBP300 per property.
New world revenue is expected to be more than half of total revenue
from 2022. With an average maintenance cost of GBP12 per social
housing property per year, there is a potential for recurring
revenue of GBP48 million per annum.
Continued progress against challenges
While the Directors are aware that there are ongoing challenges
facing the Company, they believe that despite the lockdowns the
Company made progress last year and is continuing to make progress.
While the Company is expecting to deploy its available cash this
financial year, the Directors believe that the Company should
generate free cash flow in the year ending 31 December 2022. As set
out in its audited final results for the year ended 31 December
2020, which are announced separately today, the Company has made an
increase to the warranty provision of GBP1.5 million to provide for
the battery impedance issue which first came to light in April
2016. The Directors consider that this issue is past its peak, with
the overall provision reduced to GBP2.7 million in 2020 (2019:
GBP3.5 million).
As is the case with many other similar companies, the Group has
in the past year or so had issues with its supply chain and the
availability of components continues to be an issue facing the
Group. The Directors believe that there remains an opportunity to
optimise the Group's supply chain which is related to its aim to
improve its value chain referred to above. In addition, while the
market for Connected Homes technology remains immature, and
therefore may develop more slowly than the Directors anticipate,
the Group is seeing an increased level of enquiries which the
Directors believe is driven following the recent re-commencement of
the Grenfell enquiry, as well as by further legislation for
building safety. While execution risk remains a challenge for the
Group, this is mitigated as significant processes have recently
been changed and key new hires have been made during 2020.
The Directors believe that the Fundraising will accelerate the
Group's growth in sales and margin and enhance shareholder
value.
3. Audited final results for the year ended 31 December 2020
The Company has announced separately today its audited final
results for the year ended 31 December 2020. The Group's revenue
was GBP39.9 million (2019: GBP45.5 million).
2020 was dominated by the impact of COVID-19 lockdown
restrictions. Despite a strong start to the year, which augured
well for full-year performance, revenue and the Group's profit
recovery programme were materially and directly impacted by UK and
international measures to control the spread of Covid-19.
Total revenue for the year decreased by 12% from GBP45.5 million
for the year ended 31 December 2019 to GBP39.9 million, resulting
in an underlying LBITDA of GBP1.2 million compared with underlying
EBITDA of GBP0.2 million for the year ended 31 December 2019. The
adjusted gross profit was GBP7.9 million (2019: GBP8.7 million),
which represented an adjusted gross margin of 19.8% (2019: 19.0%).
The underlying operating loss was GBP5.4 million compared to a loss
of GBP3.8 million in 2019. The underlying loss before tax was
GBP5.7 million (2019: GBP4.1 million).
Whilst the Board was satisfied with the revenue performance
given the challenging market backdrop, its plans to improve margin
during 2020 were undermined. The benefits from a range of planned
internal improvements came through much more slowly than
anticipated, with less impact than planned and this was further
compounded by reduced sales volumes. Many of the newer or growing
revenue streams from trade and social housing that the Company
aimed to pursue became temporarily unfeasible during lockdown as a
result of the impact of restrictions, with customers and business
partners focused on their own important priorities due to
Covid-19.
4. Current trading and outlook
As outlined above, the Company enjoyed a strong end to 2020, and
this momentum has continued into 2021. The Company returned to
growth in the first quarter of 2021, and although obvious
uncertainties have still tempered the overall performance, UK Trade
and Retail sales are up 30 per cent against comparable sales in Q1
2020.
The Group is delighted to have begun the rollout of its
Connected Homes alarms with Ealing Borough Council. The contract
includes generating safety data from alarms installed in properties
to allow analysis and risk management for the first time,
demonstrating the benefits and potential of FireAngel
PredictTM.
The recently announced contract with a major European energy
efficiency service provider is further vindication of the hard work
of the past year and more. The Board believes that this opportunity
will help the Group work towards higher value activities.
There is now a clearer path out of the Covid-19 related
restrictions, and while some uncertainty remains, the Board is
targeting improved performance and sales growth in 2021 versus 2019
(being the last full year prior to the impact of Covid-19). The
Group's compelling proposition to protect and save lives with
innovative, cutting-edge home safety technology remains intact. The
Group's strategic ambition to achieve this through margin
improvement and a focus on investing in Connected Homes technology
remains unaltered, supported further by legislative tailwinds.
5. Information on the Fundraising
The Company announces that it is proposing to undertake an Open
Offer to raise approximately GBP6.9 million on the basis of 10 Open
Offer Shares for every 33 Existing Ordinary Shares held on the
Record Date, at the Issue Price. In addition, the Company announces
that it has conditionally raised approximately:
-- GBP2.9 million (before expenses) by way of the Firm Placing
with certain existing Shareholders and new investors of 16,093,279
New Ordinary Shares at the Issue Price; and
-- GBP6.9 million (before expenses) by means of the Conditional
Placing with certain existing Shareholders and new investors of up
to 38,351,165 New Ordinary Shares at the Issue Price, subject to
clawback under the Open Offer.
The New Ordinary Shares will represent, in aggregate, up to 30.1
per cent. of the Enlarged Share Capital, at the Issue Price.
The Issue Price of 18 pence per New Ordinary Share represents a
discount of approximately 19.6 per cent. to the Closing Price of
22.4 pence on 29 April 2021, being the latest practicable date
prior to the date of this announcement.
The Fundraising is not being underwritten and is conditional,
inter alia, on Admission becoming effective by no later than 8.00
a.m. on 20 May 2021 (or such later time and/or date, being not
later than 4 June 2021, as the Company, Shore Capital &
Corporate and the Joint Brokers may agree).
Accordingly, if any of such conditions are not satisfied, or, if
applicable, waived, the Fundraising will not proceed and any Open
Offer Entitlements and Excess Open Offer Entitlements admitted to
CREST as part of the Open Offer will thereafter be disabled.
Application will be made to the London Stock Exchange for the
New Ordinary Shares to be admitted to trading on AIM. The New
Ordinary Shares will 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 in respect
of the Ordinary Shares following Admission. It is expected that
such Admission will become effective and that dealings on AIM will
commence at 8.00 a.m. on 20 May 2021.
6. Use of net proceeds
The net proceeds of the Fundraising are expected to be
approximately GBP9.0 million. It is proposed that such proceeds
will be used to:
-- fund research and development to accelerate new products;
-- implement efficiencies, improvements and cost-saving;
-- strengthen the Company's balance sheet, including optimising
the Company's working capital position in respect of stock and
payables;
-- fund part of the legacy battery warranty returns.
7. Related Party Transactions
Client funds of Downing LLP (together, "Downing LLP") have
agreed to subscribe for 10,856,666 Placing Shares. As at the date
of this anno u ncement, so far as the Company is aware, Downing LLP
holds 23,645,248 Existing Ordinary Shares representing
approximately 18.68 per cent. of the Existing Ordinary Shares. As
such, Downing LLP is a substantial shareholder of the Company and
its participation in the Placing is a related party transaction
pursuant to AIM Rule 13 of the AIM Rules. The Directors consider,
having consulted with the Company's nominated adviser, Shore
Capital & Corporate, that the terms of Downing LLP's
participation in the Placing are fair and reasonable insofar as the
Shareholders are concerned.
Discretionary clients of Canaccord Genuity Group Inc.
("Canaccord Genuity") have agreed to subscribe for 7,222,222
Placing Shares. As at the date of this anno u ncement, so far as
the Company is aware, Canaccord Genuity holds 14,700,000 Existing
Ordinary Shares representing approximately 10.3 per cent. of the
Existing Ordinary Shares. As such, Canaccord Genuity is a
substantial shareholder of the Company and its participation in the
Placing is a related party transaction pursuant to AIM Rule 13 of
the AIM Rules. The Directors consider, having consulted with the
Company's nominated adviser, Shore Capital & Corporate, that
the terms of Canaccord Genuity's participation in the Placing are
fair and reasonable insofar as the Shareholders are concerned.
BGF Investment Management Limited ("BGF") has agreed to
subscribe for 6,388,889 Placing Shares. As at the date of this anno
u ncement, so far as the Company is aware, BGF holds 14,638,098
Existing Ordinary Shares representing approximately 11.6 per cent.
of the Existing Ordinary Shares. As such, BGF is a substantial
shareholder of the Company and its participation in the Placing is
a related party transaction pursuant to AIM Rule 13 of the AIM
Rules. The Directors consider, having consulted with the Company's
nominated adviser, Shore Capital & Corporate, that the terms of
BGF's participation in the Placing are fair and reasonable insofar
as the Shareholders are concerned.
Each of Zoe Fox (Chief Financial Officer), Jon Kempster
(Non-Executive Director), Glenn Collinson (Non-Executive Director)
and Graham Whitworth (Non-Executive Director) and his wife have
each agreed to subscribe for 55,556, 55,556, 111,111 and 166,649
Placing Shares respectively in the Placing.
In addition, John Conoley and his wife intend to subscribe for
their Open Offer Entitlement being, in aggregate, 128,590 Open
Offer Shares, representing approximately 0.34 of the Open Offer
Shares.
8. Details of the Open Offer, the Conditional Placing and the Firm Placing
The Company proposes to raise up to GBP6.9 million by way of the
Open Offer to its Qualifying Shareholders. In addition, the Company
announces that it has conditionally raised:
-- approximately GBP2.9 million (before expenses) by means of
the Firm Placing with certain existing Shareholders and new
investors of 16,093,279 New Ordinary Shares at the Issue Price;
and
-- up to approximately GBP6.9 million (before expenses) by means
of the Conditional Placing with certain existing Shareholders and
new investors of 38,351,165 New Ordinary Shares at the Issue Price,
subject to clawback under the Open Offer.
The New Ordinary Shares will represent approximately 30.1 per
cent. of the Enlarged Share Capital immediately following
Admission. The Issue Price represents a discount of approximately
19.6 per cent. to the Closing Price on the Latest Practicable
Date.
Principal Terms of the Open Offer
Qualifying Shareholders (other than, subject to certain
exemptions, those Shareholders in Restricted Jurisdictions) have
the opportunity under the Open Offer to apply for Open Offer Shares
at the Issue Price, payable in full on application and free of
expenses, pro rata to their existing shareholdings, on the
following basis:
10 Open Offer Shares for every 33 Existing Ordinary Shares
held by them and registered in their names on the Record Date,
rounded down to the nearest whole number of Open Offer Shares.
Qualifying Shareholders (other than, subject to certain
exemptions, those Shareholders with a registered address in or who
are located in and/or resident or are citizens of, in each case, a
Restricted Jurisdiction) may apply for any whole number of Open
Offer Shares up to their Open Offer Entitlement.
Qualifying Shareholders are also being given the opportunity to
apply for additional Open Offer Shares at the Issue Price through
the Excess Application Facility. The total maximum number of Open
Offer Shares is fixed and will not be increased in response to
applications under the Excess Application Facility. Such
applications will therefore only be satisfied to the extent that
Qualifying Shareholders do not take up their Open Offer
Entitlements in full. All applications under the Excess Application
Facility will be subject to the Excess Application Cap, which has
been set at a level where it is possible for a Qualifying
Shareholder to maintain (but not exceed) its percentage
shareholding in the Company as at the date of the Circular in
circumstances where other Qualifying Shareholders have not
subscribed for their Open Offer Entitlements in full. If there is
an over-subscription resulting from excess applications,
allocations of Excess Shares will be determined by the Excess
Allocation Method. Further details regarding the Excess Allocation
Method will be set out in paragraph 2 of Part 3 of the Circular. No
assurance can be given that applications by Qualifying Shareholders
under the Excess Application Facility will be met in full, in part
or at all.
The Open Offer is not a rights issue.
Qualifying CREST Shareholders should note that although the Open
Offer Entitlements and Excess Open Offer Entitlements will be
admitted to CREST and be enabled for settlement, they will not be
tradable and applications in respect of the Open Offer Entitlements
and Excess Open Offer Entitlements may only be made by the
Qualifying Shareholder originally entitled or by a person entitled
by virtue of a bona fide market claim raised by Euroclear's Claims
Processing Unit. Qualifying Non-CREST Shareholders should note that
the Application Form is not a negotiable document and cannot be
traded. Qualifying Shareholders who do not apply to take up their
Open Offer Entitlements or Excess Open Offer Entitlements will have
no rights under the Open Offer or receive any proceeds from it. New
Ordinary Shares not taken up by Qualifying Shareholders under the
Open Offer will be allocated to Qualifying Shareholders who apply
under the Excess Application Facility (in accordance with the
Excess Allocation Method) with the proceeds ultimately accruing for
the benefit of the Company. Qualifying Shareholders should be aware
that under 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.
The Excess Application Facility will enable Qualifying
Shareholders, provided that they take up their Open Offer
Entitlement in full, to apply for an Excess Open Offer Entitlement.
Qualifying Non-CREST Shareholders who wish to apply to acquire more
than their Open Offer Entitlement should complete the relevant
sections on the Application Form. Qualifying CREST Shareholders
will have Excess Open Offer Entitlements credited to their stock
account in CREST and should refer to paragraph 2 of Part 3 of the
Circular for information on how to apply for Excess Open Offer
Entitlement pursuant to the Excess Application Facility.
Applications for Excess Open Offer Entitlements will be
satisfied only and to the extent that corresponding applications by
other Qualifying Shareholders are not made or are made for less
than their Open Offer Entitlements. Once subscriptions by
Qualifying Shareholders under their respective Open Offer
Entitlements have been satisfied, allocations of Excess Shares will
be determined by the Excess Allocation Method. Further details
regarding the Excess Allocation Method will be set out in paragraph
2 of Part 3 of the Circular. All applications under the Excess
Application Facility will be subject to the Excess Application Cap,
which has been set at a level where it is possible for a Qualifying
Shareholder to maintain (but not exceed) its percentage
shareholding in the Company as at the date of the Circular in
circumstances where other Qualifying Shareholders have not
subscribed for their Open Offer Entitlements in full. No assurance
can be given that applications by Qualifying Shareholders under the
Excess Application Facility will be met in full, in part or at
all.
Application will be made for the Open Offer Entitlements and
Excess Open Offer Entitlements in respect of Qualifying CREST
Shareholders to be admitted to CREST. It is expected that such Open
Offer Entitlements and Excess Open Offer Entitlements will be
admitted to CREST on 4 May 2021. Applications through the means of
the CREST system may only be made by the Qualifying Shareholder
originally entitled or by a person entitled by virtue of a bona
fide market claim.
Qualifying Non-CREST Shareholders will receive an Application
Form with the Circular which will set out their entitlement to Open
Offer Shares as shown by the number of Open Offer Entitlements
allocated to them.
Qualifying CREST Shareholders will receive a credit to their
appropriate stock accounts in CREST in respect of their Open Offer
Entitlements and Excess Open Offer Entitlements by 4 May 2021.
Qualifying CREST Shareholders should note that although the Open
Offer Entitlements and Excess Open Offer Entitlements will be
admitted to CREST and be enabled for settlement, applications in
respect of entitlements under the Open Offer may only be made by
the Qualifying Shareholder originally entitled or by a person
entitled by virtue of a bona fide market claim. If applications are
made for less than all of the Open Offer Shares available, then the
lower number of Open Offer Shares will be issued and any
outstanding Open Offer Entitlements will immediately lapse.
Further details of the Open Offer and the terms and conditions
on which it is being made, including the procedure for application
and payment, will be contained in Part 3 of the Circular and, for
Non-CREST Qualifying Shareholders, on the accompanying Application
Form. To be valid, Application Forms or CREST instructions (duly
completed) and payment in full for the Open Offer Shares applied
for must be received by the Receiving Agent by the date to be
specified in the Circular (expected to be by no later than 11.00
a.m. on 19 May 20210. Application Forms should be returned to
Neville Registrars Limited, Neville House, Steelpark Road,
Halesowen B62 8HD by such time.
If Admission does not occur on or before 8.00 a.m. on 20 May
2021 (or such later time and date as the Company, Shore Capital
& Corporate and the Joint Brokers may agree, being not later
than 4 June 2021), the Open Offer will not become unconditional and
application monies will be returned to applicants, without
interest, as soon as practicable thereafter.
Principal Terms of the Conditional Placing
The Company is proposing to issue up to 38,351,165 Placing
Shares pursuant to the Placing Agreement. In accordance with the
terms of the Placing Agreement, the Joint Brokers have, as agents
for the Company, placed with certain existing and new institutional
investors the Placing Shares at the Issue Price which are subject
to clawback under the terms of the Open Offer.
Principal Terms of the Firm Placing
The Company is proposing to issue 16,093,279 Firm Placing Shares
pursuant to the Placing Agreement. In accordance with the terms of
the Placing Agreement, the Joint Brokers have, as agents for the
Company, placed with certain existing and new institutional
investors the Firm Placing Shares at the Issue Price. The Firm
Placing Shares are not subject to clawback and are not part of the
Open Offer or the Conditional Placing.
The Company and Shore Capital Stockbrokers have agreed to
subscribe for ordinary shares in JerseyCo, a company incorporated
in Jersey. Monies received from institutional investors subscribing
for the Firm Placing Cashbox Shares under the Placing Agreement
will be paid to an account with the JerseyCo Subscriber. The
JerseyCo Subscriber (acting as principal) will apply the monies in
such account to subscribe for redeemable preference shares in
JerseyCo.
The Company will allot and issue the Firm Placing Cashbox Shares
to those persons entitled thereto in consideration for the JerseyCo
Subscriber transferring its holdings of ordinary shares and
redeemable preference shares in JerseyCo to the Company.
Accordingly, instead of receiving cash consideration for the issue
of the Firm Placing Cashbox Shares, following completion of the
Placing, the Company will own the entire issued share capital of
JerseyCo, whose only asset will be the cash reserves representing
an amount approximately equal to the net proceeds of the issue of
the Firm Placing Cashbox Shares receivable under the Placing
Agreement. The Company should be able to access those funds by
redeeming the redeemable preference shares it holds in JerseyCo,
or, alternatively, during any interim period prior to redemption,
by procuring that JerseyCo lends the amount to the Company. The
ability to realise distributable reserves in the Company will
facilitate any potential distribution to Shareholders made by the
Company in the future.
9. Overseas Shareholders
The attention of Qualifying Shareholders who have a registered
address outside the United Kingdom, or who are located and/or
resident in or are citizens of, in each case, a country other than
the United Kingdom, or who are holding Existing Ordinary Shares for
the benefit of such persons (including, without limitation,
custodians, nominees, trustees and agents) or who have a
contractual or other legal obligation to forward this announcement,
the Circular or the Application Form to such persons, is drawn to
the information which will be set out in paragraphs 6 and/or 7 of
Part 3 of the Circular.
Persons who have a registered address in or who are located
and/or resident in or are citizens of, in each case, a country
other than the United Kingdom should consult their professional
advisers as to whether they require any governmental or other
consents or need to observe any other formalities to enable them to
acquire or subscribe for any New Ordinary Shares. The notice in the
London Gazette which will be referred to in paragraph 7 of Part 3
of the Circular will state where an Application Form may be
inspected or obtained. Any person with a registered address in or
who are located in and/or resident in or are citizens of, in each
case, a Restricted Jurisdiction who obtains a copy of the Circular
or an Application Form is required to disregard them, except with
the consent of the Company.
The Circular and any accompanying documents will not be made
available to Overseas Shareholders with registered addresses in any
Restricted Jurisdiction (subject to limited exceptions) and,
subject to certain exceptions, may not be treated as an invitation
to subscribe for any New Ordinary Shares by any person located in
and/or resident in or are citizens of, in each case, a Restricted
Jurisdiction.
The New Ordinary Shares, Open Offer Entitlements and Excess Open
Offer Entitlements have not been, and will not be, registered under
the applicable securities laws of any Restricted Jurisdiction.
Accordingly, subject to certain exceptions, the New Ordinary
Shares, Open Offer Entitlements and Excess Open Offer Entitlements
may not be offered, sold, delivered or transferred, directly or
indirectly, in or into any Restricted Jurisdiction to or for the
account or benefit of any national, resident or citizen of any
Restricted Jurisdiction.
10. Dilution resulting from the Fundraising
Following the issue of New Ordinary Shares, Shareholders who
take up their Open Offer Entitlements (but do not take up any
Excess Open Offer Entitlements) in full will suffer a dilution of
approximately 8.9 per cent. to their interests in the Company as a
result of the Fundraising. The Board has sought to balance this
dilution by making available the Excess Application Facility.
Shareholders who do not take up any of their Open Offer
Entitlements will suffer a dilution of up to 30.1 per cent. to
their interests in the Company as a result of the Fundraising.
11. The City Code
The City Code applies to quoted public companies which have
their registered office in the UK, the Channel Islands or the Isle
of Man and, in addition, unquoted public companies which have their
registered office in the UK, the Channel Islands, or the Isle of
Man and whose central management and control remain in the UK, the
Channel Islands or the Isle of Man. Accordingly, the City Code
applies to the Company. Under the City Code, if an acquisition of
Ordinary Shares or interests therein were to increase the aggregate
holding of the acquirer and its concert parties to interests in
shares carrying 30 per cent. or more of the voting rights in the
Company, the acquirer and, depending on circumstances, its concert
parties would be required (except with the consent of the Panel) to
make a cash offer for the outstanding shares in the Company at a
price not less than the highest price paid for interests in shares
by the acquirer or its concert parties during the previous 12
months.
This requirement would also be triggered by any acquisition of
New Ordinary Shares and/or interest therein by a person holding
(together with its concert parties) Ordinary Shares carrying
between 30 and 50 per cent. of the voting rights in the Company if
the effect of such acquisition was to increase that person's
percentage of the total voting rights of the Company.
12. Placing Agreement
Under a placing agreement entered into between the Company,
Shore Capital & Corporate and the Joint Brokers, each of the
Joint Brokers have conditionally agreed to act as placing agent to
the Company and to use reasonable endeavours to procure Placees to
subscribe for the Firm Placing Shares and the Conditional Placing
Shares at the Issue Price. The Conditional Placing Shares have been
placed with Placees subject to clawback under the Open Offer. The
Placing Agreement sets out the conditions relating to the
Placing.
The Firm Placing and the Conditional Placing are conditional
upon (amongst other things) the satisfaction of the following
conditions:
(a) Admission taking place no later than 8.00 a.m. on 20 May
2021 (or such later time and/or date as the Company and the Joint
Brokers may agree being no later than 4 June 2021);
(b) there being no breach of warranty in the Placing Agreement prior to Admission; and
(c) the performance by the Company of its obligations under the
Placing Agreement and/or other terms of or conditions to the Firm
Placing and the Conditional Placing prior to Admission.
The Placing Agreement contains certain customary warranties from
the Company in favour of Shore Capital & Corporate and the
Joint Brokers in relation to, inter alia, the accuracy of the
information contained in this announcement and certain other
matters relating to the Group and its business. In addition, the
Company has given certain undertakings to Shore Capital &
Corporate and the Joint Brokers and has agreed to indemnify Shore
Capital & Corporate and the Joint Brokers in relation to
certain customary liabilities they may incur in respect of the
Fundraising. Shore Capital & Corporate and the Joint Brokers
have the right to terminate the Placing Agreement in certain
circumstances prior to Admission including, inter alia: (i) for
certain force majeure events or other events involving certain
material adverse changes or prospective material adverse changes
relating to the Group; or (ii) in the event of a breach of the
warranties or other obligations of the Company set out in the
Placing Agreement.
Under the Placing Agreement the Company has agreed to pay
certain fees and commissions to Shore Capital & Corporate and
the Joint Brokers and certain other costs and expenses in
connection with the Fundraising and Admission.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS (1), (2)
2021
Record Date for entitlements under the Open 6.00 p.m. on 29
Offer April
Publication of this announcement 30 April
Ex-entitlement date for the Open Offer 8.00 a.m. on 30
April
Posting of the Circular and, to Qualifying 30 April
Non-CREST Shareholders only, the Application
Form (3)
Publication of Notice of the Open Offer in 4 May
the London Gazette
Open Offer Entitlements credited to stock 4 May
accounts of Qualifying CREST Shareholders
(3)
Recommended latest time for requesting withdrawal 4.30 p.m. on 13
of Open Offer Entitlements from CREST (3) May
Latest time and date for depositing Open Offer 3.00 p.m. on 14
Entitlements into CREST (3) May
Latest time and date for splitting of Application 3.00 p.m. on 17
Forms (to satisfy bona fide market claims May
only)
Latest time and date for receipt of completed 11.00 a.m. on
Application Forms from Qualifying Non-CREST 19 May
Shareholders and payment in full under the
Open Offer and settlement of relevant CREST
instructions (as appropriate) (3), (4)
Announcement of the result of the Open Offer 19 May
Admission and commencement of dealings in 8.00 a.m. on 20
the New Ordinary Shares May
CREST Members' accounts expected to be credited 20 May
in respect of New Ordinary Shares in uncertificated
form (3)
Expected despatch of definitive share certificates by 4 June
for New Ordinary Shares in certificated form
(3)
Notes:
1. Each of the times and dates below are indicative only and are
subject to change. If any of the above times and/or dates change,
the revised times and/or dates will be notified by the Company to
Shareholders by announcement through a RIS.
2. All of the times below refer to London time unless otherwise stated.
3. Subject to certain restrictions relating to Qualifying
Shareholders with registered addresses in, or who are located
and/or resident in or are citizens of, in each case, countries
outside the UK (details of which will be set out in Part 3 of the
Circular).
4. In order to subscribe for Open Offer Shares, Qualifying
Shareholders will need to follow the procedure which will be set
out in Part 3 of the Circular and, where relevant, complete the
Application Form. If Qualifying Shareholders have any queries on
the procedure for acceptance and payment, or wish to request
another Application Form, they should contact Neville Registrars on
0121 585 1131 or if calling from outside the UK on +44 121 585
1131. Calls to the Neville Registrars' help lines are charged at
your provider's standard rates for national or, as the case may be,
international calls. Different charges may apply to calls made from
mobile telephones and calls may be recorded and monitored randomly
for security and training purposes. Neville Registrars cannot
provide advice on the merits of the Open Offer nor give any
financial, legal or tax advice.
ISSUE STATISTICS
Closing Price per Ordinary Share(1) 22.4 pence
Issue Price per New Ordinary Share 18 pence
Basis of Open Offer 10 Open Offer Shares for every 33 Existing Ordinary
Shares(2)
Discount to Closing Price per Ordinary Share(1) 19.6 per cent.
Number of Ordinary Shares in issue(3) 126,558,845
Number of Firm Placing Shares to be issued by the
Company 16,093,279
Gross proceeds of the Firm Placing GBP9.8 million
Maximum number of New Ordinary Shares to be issued by
the Company pursuant to the Open Offer
and Conditional Placing 38,351,165
Gross proceeds of the Fundraising GBP9.8 million
Maximum number of Ordinary Shares in issue immediately
following Admission(3) 181,003,289
Percentage of Enlarged Share Capital represented by the 8.9 per cent.
Firm Placing Shares
Percentage of Enlarged Share Capital represented by the 21.2 per cent.
Open Offer Shares and Conditional
Placing Shares
Percentage of the Enlarged Share Capital represented by 30.1 per cent.
the New Ordinary Shares
Estimated net proceeds of the Fundraising(4) GBP9.0 million
Ordinary Shares ISIN GB0030508757
GB00BNKF7268
Open Offer Entitlements ISIN
Excess Open Offer Entitlements ISIN GB00BNKF7375
SEDOL 3050875
SEDOL Open Offer Entitlements BNKF726
SEDOL Excess Entitlements BNKF737
Notes:
1. Closing Price on the Latest Practicable Date.
2. Fractions of Open Offer Shares will not be allotted to
Shareholders in the Open Offer and fractional entitlements under
the Open Offer will be rounded down to the nearest whole number of
Open Offer Shares.
3. As at the Latest Practicable Date.
4. Based on the estimated expenses of the Fundraising and
assuming successful applications are received for all available
Open Offer Shares and no further new Ordinary Shares are issued as
a result of the exercise of any options or awards vesting under any
share schemes of the Company.
DEFINITIONS
The following definitions apply throughout this announcement
unless the context requires otherwise:
"Admission" the admission of the New Ordinary Shares to
trading on AIM becoming effective in accordance
with the AIM Rules
"AIM" AIM, a market 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)
"AIM Rules for the AIM Rules for Nominated Advisers published
Nominated Advisers" by the London Stock Exchange (as amended from
time to time)
"Application Form" the personalised application form accompanying
the Circular on which Qualifying Non-CREST
Shareholders may apply for Open Offer Shares
under the Open Offer
"Board" or "Directors" the directors of the Company
"Business Day" any day on which banks are usually open in
England and Wales for the transaction of business,
other than a Saturday, Sunday or public holiday
"certificated" a share or other security not held in uncertificated
or "in certificated form (that is, not in CREST)
form"
the circular containing details of the Fundraising
"Circular" expected to be posted to Shareholders later
today
"City Code" the City Code on Takeovers and Mergers
"Closing Price" the closing middle market quotation of an Ordinary
Share as derived from the Daily Official List
of the London Stock Exchange
"Companies Act" Companies Act 2006 (as amended)
or the "Act"
"Company" or "FireAngel" FireAngel Safety Technology Group Plc, a public
limited company incorporated in England and
Wales with company number 03991353
"Conditional Placing" the conditional placing of the Conditional
Placing Shares by the Company
"Conditional Placing the 38,351,165 New Ordinary Shares which are
Shares" the subject of the Conditional Placing
"CREST" the relevant system (as defined in the CREST
Regulations) in respect of which Euroclear
is the Operator (as defined in the CREST Regulations)
"CREST Member" a person who has been admitted to Euroclear
as a system-member (as defined in the CREST
Regulations)
"CREST Participant" a person who is, in relation to CREST, a system-participant
(as defined in the CREST Regulations)
"CREST Regulations" the Uncertificated Securities Regulations 2001
(SI 2001/3755) (as amended from time to time)
"Enlarged Share the total number of issued Ordinary Shares
Capital" on completion of the Fundraising following
the issue of the New Ordinary Shares, and assuming
that all of the New Ordinary Shares (but no
others) are issued
"Estimated Expenses" the estimated expenses incurred in connection
with the Fundraising, being GBP 0.8 million,
assuming all New Ordinary Shares are issued
"Euroclear" Euroclear UK & Ireland Limited, the operator
of CREST
"Excess Allocation the Excess Allocation Method to be described
Method" in paragraph 2 of Part 3 of the Circular
"Excess Application the Excess Application Cap to be defined in
Cap" paragraph 2 of Part 3 of the Circular
"Excess Application the arrangement pursuant to which Qualifying
Facility" Shareholders may apply for Open Offer Shares
in excess of their Open Offer Entitlement
"Excess CREST Open in respect of each Qualifying CREST Shareholder,
Offer Entitlements" the entitlement to apply for Open Offer Shares
in addition to such holder's Open Offer Entitlement
credited to their stock account in CREST, pursuant
to the Excess Application Facility, which is
conditional on them taking up their Open Offer
Entitlement in full and which may be subject
to scaling back in accordance with the Excess
Allocation Method and the provisions of the
Circular
"Excess Open Offer an entitlement for each Qualifying Shareholder
Entitlements" to apply to subscribe for Open Offer Shares
in addition to their Open Offer Entitlement
pursuant to the Excess Application Facility
which is conditional on them taking up their
Open Offer Entitlement in full and which may
be subject to scaling back in accordance with
the provisions of the Circular
"Excess Share Applicant" each Qualifying Shareholder who has (i) taken
up its Open Offer Entitlement in full and (ii)
applied for Excess Shares under the Excess
Application Facility
"Excess Shares" Open Offer Shares in addition to the Open Offer
Entitlement for which Qualifying Shareholders
may apply under the Excess Application Facility
"Existing Ordinary the issued share capital of the Company as
Shares" at the date of this announcement , being 126,558,845
Ordinary Shares
"FCA" the United Kingdom Financial Conduct Authority
in its capacity as the competent authority
for the purposes of Part VI of FSMA
"Firm Placing" the placing of the Firm Placing Shares with
certain existing Shareholders and new investors
pursuant to the terms of the Placing Agreement
"Firm Placing Shares" 16,093,279 New Ordinary Shares to be allotted
and issued by the Company pursuant to the Placing
Agreement, including the Firm Placing Cashbox
Shares
"Firm Placing Cashbox means 9,765,337 New Ordinary Shares to be issued
Shares" in connection with the Firm Placing to those
persons entitled thereto in consideration for
the JerseyCo Subscriber transferring its ordinary
shares and redeemable preference shares in
JerseyCo to the Company
"FSMA" the Financial Services and Markets Act 2000
(as amended)
"Fundraising" the Firm Placing, Open Offer and Conditional
Placing
"Gross Proceeds" the proceeds from the issue of the New Ordinary
Shares prior to the deduction of the Estimated
Expenses, being GBP9.8 million, assuming all
New Ordinary Shares are issued
"Group" the Company and its subsidiaries from time
to time
"Issue Price" 18 pence per New Ordinary Share
"JerseyCo" means Project Hurricane Limited
"JerseyCo Subscriber" means Shore Capital Stockbrokers
"Joint Brokers" means, together, Shore Capital Stockbrokers
and N+1 Singer
"Latest Practicable means 29 April 2021
Date"
"London Stock Exchange" London Stock Exchange plc
"N+1 Singer" Nplus1 Singer Capital Markets Limited (together
with its affiliated entities), acting as the
Company's joint broker, which is incorporated
as a private limited company in England and
Wales with company number 05792780
"Net Proceeds" the estimated net proceeds from the issue of
the New Ordinary Shares after the deduction
of the Estimated Expenses from the Gross Proceeds
"New Ordinary Shares" the Ordinary Shares to be issued in connection
with the Fundraising, being up to 54,444,444
new Ordinary Shares
"Open Offer" the conditional invitation to Qualifying Shareholders
to subscribe for the Open Offer Shares at the
Issue Price on the terms and subject to the
conditions which will be set out in the Circular
and, in the case of Qualifying Non-CREST Shareholders
only, the Application Form
"Open Offer Entitlement(s)" the pro rata entitlement of Qualifying Shareholders
to subscribe for 10 Open Offer Shares for every
33 Existing Ordinary Shares registered in their
name as at the Record Date, on and subject
to the terms of the Open Offer
"Open Offer Shares" the up to 38,351,165 New Ordinary Shares for
which Qualifying Shareholders are being invited
to apply, to be issued pursuant to the terms
of the Open Offer
"Ordinary Shares" the ordinary shares of two pence each in the
capital of the Company and "Ordinary Share"
shall be construed accordingly
"Overseas Shareholders" Shareholders with a registered address in or
who are located and/or resident in or are a
citizen of, in each case, a Restricted Jurisdiction
"Panel" the Panel on Takeovers and Mergers
"Participant ID" the identification code or membership number
used in CREST to identify a particular CREST
Member or other CREST Participant
"Placee" any person that has agreed to subscribe for
Firm Placing Shares or conditionally agreed
to subscribe for Placing Shares
"Placing" the Conditional Placing of the Conditional
Placing Shares and the Firm Placing of the
Firm Placing Shares by the Company
"Placing Shares" the Firm Placing Shares and the Conditional
Placing Shares, together
"Qualifying CREST Qualifying Shareholders holding Ordinary Shares
Shareholders" in uncertificated form in CREST at the Record
Date
"Qualifying Non-CREST Qualifying Shareholders holding Ordinary Shares
Shareholders" in certificated form at the Record Date
"Qualifying Shareholders" holders of Existing Ordinary Shares on the
register of members of the Company at the Record
Date
"Record Date" 6.00 p.m. on 29 April 2021
"Registrars" or Neville Registrars Limited, Neville House,
"Receiving Agent" Steelpark Road, Halesowen B62 8HD
"Restricted Jurisdiction" each and any of the United States, Australia,
Canada, Japan, the Republic of South Africa
and New Zealand
"RIS" or "Regulatory a Regulatory Information Service within the
Information Service" meaning given in the AIM Rules
"Shareholders" holders of Ordinary Shares
"Shore Capital" Shore Capital & Corporate and/or Shore Capital
Stockbrokers, as appropriate
"Shore Capital Shore Capital and Corporate Limited and, where
& Corporate" the context allows, its affiliates, the Company's
nominated adviser, which is incorporated as
a private limited company in England and Wales
with company number 02083043
"Shore Capital Shore Capital Stockbrokers Limited and, where
Stockbrokers" the context allows, its affiliates, acting
as the Company's joint broker, which is incorporated
as a private limited company in England and
Wales with company number 01850105
"uncertificated" a shareholding which is recorded on the register
or "in uncertificated of members of the Company as being held in
form" uncertificated form in CREST and title to which,
by virtue of the CREST Regulations, may be
transferred by means of CREST
"United Kingdom" the United Kingdom of Great Britain and Northern
or "UK" Ireland
"United States" the United States of America
or "US"
"USE" an unmatched stock event
"GBP", "Pounds the lawful currency of the United Kingdom
Sterling", "sterling",
"Pence" or "pence"
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END
IOEWPUPUCUPGGPU
(END) Dow Jones Newswires
April 30, 2021 08:05 ET (12:05 GMT)
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