This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
30 June 2020
ST. JAMES HOUSE PLC
(“SJH”, the “Group” or the “Company”)
Trading & Financing Update
The Board of Directors of the Company (the “Board“) is pleased to provide the following trading statement and update on recent developments.
The payments division continues to improve especially in non-card payments, EURO IBAN account openings, which have increased a further 16% in the period 3 April 2020 to 17 June 2020, growth of GBP accounts was 20%, in the same period; again the Board will be able to present more meaningful data as growth patterns emerge in the coming months.
In card payment services, in the period from 3 April to 17 June we have deployed several upgrades to improve customer experience. Prepaid Card Products have seen an uplift of 10% on card orders and active customers have increased by 8%, further supported by a 35% growth in spend volume across active users.
The merchant services team have continued the merchant approval process with a broad range and list of suitable candidates having applied for services from a range of medium to high-risk industries.
We are continually monitoring performance and the impact of COVID-19, which to date has had some impact when arranging meetings with potential merchants however we expect client visits to return to normal as the restrictions on movement and social distancing are relaxed over the coming weeks.
Overall, Prize Provision Services Ltd (“PPS“) has been largely unaffected by the COVID-19 pandemic. While there has been a small decrease in the number of entries into the lotteries which PPS administers, overall lotteries have been shown to be an extremely robust form of fundraising in comparison to other popular fundraising methods.
The robust nature of lottery fundraising has led to numerous current and new clients contacting PPS to place greater focus on lottery fundraising and the company expects to see an overall increase in entries during the second half of 2020.
The overall number of lines played during June 2020 is on a par with June 2019.
For the year to 31 January, the Group had revenues of £952k (unaudited). This compared to £938k (audited) for the previous year. For the 3 months to 30 April 2020, Group revenues were £329k (unaudited). As of 31 May 2020, cash balances available to the Group (excluding client balances held by the Payments Divisions and segregated funds held by PPS) were £120k (unaudited). Total Group cash balances on 31 May 2020 were £1.06m (unaudited).
Astro Kings, the joint venture 5-a-side football centre located in Nottingham, was temporarily closed on 20 March 2020 in line with Government requirements. The venue partially reopened on 1 June 2020 as restrictions were eased and the facility will reopen fully as and when the relaxation of social distancing restrictions allow and the management are confident that they can operate in a safe and responsible manner. The closure is not expected to have a material impact on the Group.
Entry into a Convertible Loan Agreement
The company is to enter into an unsecured convertible loan note agreement, for a total amount of £415,000 with a small number of investors, some of whom are existing shareholders, which have the following key terms (the “Convertible Loan Notes“):
· Issued in multiples of £1.00;
· A maturity date of 6 July 2023;
· Convertible into the ordinary shares of 1 pence each in the capital of SJH (“Ordinary Shares“) at a price of 10 pence per Ordinary Share at any date up to 6 July 2023;
· Pay a coupon of 5 per cent per annum, which shall accrue until conversion or redemption, and on conversion, may be converted into Ordinary Shares on the same terms as set out above;
· Are unsecured; and
· Are not transferrable except in limited circumstances.
The subscribers for the Convertible Loan Notes have to make full settlement of the amounts due by 6 July 2020, and any amounts received in advance will accrue the coupon set out above from the date of receipt of cleared funds.
The Company has issued legal proceedings against Michael Peters under his personal financial commitment to the Company in respect of the continued failure of Auxilum Investere SJ Limited to provide the contracted funds under the subscription of £500,000 at 30 pence per Ordinary Share announced on 31 January 2020 (the “Subscription“), as well as actively pursuing recovery of the monies due, and will update the market on any progress as appropriate.
Capitalisation of Liabilities
Further to the announcement of 6 February 2020, the Company will issue the 791,667 Ordinary Shares (described as the 366,667 Capitalisation Shares and 425,000 Fee Shares in the General Meeting Circular of the same date) in settlement of certain liabilities totalling £237,500, based on an issue price of 30 pence per Ordinary Share (the “Capitalisation“) on 6 July 2020. The Capitalisation was intended to be undertaken alongside the Subscription, both issues of Ordinary Shares being approved at the General Meeting held on 28 February 2020 (the “GM“).
Although the Subscription remains outstanding, The Board have concluded that the other elements of the resolutions approved at the GM should now be implemented (on the original terms) alongside the issue of the Convertible Loan Notes. A copy of the General Meeting Circular can be viewed on the Company’s website at https://sjhplc.com/regulatory-news/aim-26-rule/ to review full details. Concurrent with the Capitalisation, the Company will also issue 300,000 Ordinary Shares at 10 pence per share in settlement of certain other liabilities (the “Further Capitalisation“).
Related Party Transactions & PDMR Dealings
Included with in the subscriptions for the Convertible Loan notes are the following:
· £75,000 by First Hartford Trust, a family trust of Mr John Botros, a subsidiary director, where his wife is a beneficiary;
· £20,000 by Daniel Pym, a subsidiary director;
· £20,000 by James Rose, a subsidiary director;
· £5,000 by Roger Matthews, the Chairman;
· £5,000 by Arno Rudolf, a Non-Executive Director; and
· £5,000 by Tim Razzall, who was Chairman until 31 July 2019.
These subscriptions therefore constitute related party transactions under the AIM Rules for Companies. The Board (excluding Mr Matthews and Mr Rudolf) consider, having consulted with Allenby Capital Limited, the Company’s nominated adviser, that the terms of these subscription are fair and reasonable insofar as its shareholders are concerned.
Certain of the subscriptions for the Convertible Loan Notes and issues of Ordinary Shares under the Capitalisation are dealings by Person Discharging Managerial Responsibility (“PDMR“) or Person Closely Associated (“PCA“) under the Market Abuse Regulation. Full disclosures are made at the bottom of this announcement. £170,000 of the Convertible Loan Notes are being subscribed by persons who are not defined as Related Parties under the AIM Rules for Companies, PDMR or PCA.
Following the issue of the Convertible Loan Notes, the Capitalisation and the Further Capitalisation, the Board are satisfied that the Company has an adequate level of working capital for the year to 31 January 2021, however, it will continue to be a key area of focus during the current Covid-19 crisis.
Admission, Shareholdings & Total Voting Rights
An application will be made to admit to trading on AIM the new Ordinary Shares issued under the Capitalisation and Further Capitalisation on or around 6 July 2020 (“Admission“). Following Admission, the Shareholdings of the Board and Significant Shareholders (as defined in the AIM Rules for Companies) will be as follows, to the best of the Company’s knowledge:
Number of Ordinary Shares Held
Percentage of Ordinary Shares Held
Empire Global Management Limited
J M Malone1
Lord Tim Razzall
1. J M Malone is Mr Botros’ wife. Includes 160,000 Ordinary Shares held by Bluedale Corporate Limited, a company controlled by Ms Malone and 42,736 Ordinary Shares held in trust by Ms Malone for the adult children of her and Mr Botros. Post Change, it also includes 210,000 Ordinary Shares held by First Hartford Trust, a trust of which Ms Malone and the aforementioned adult children are all beneficiaries.
2. Includes Ordinary Shares held by Moorhen Limited, a company controlled by Mr Jackson and 33,333 Ordinary Shares, Post Changes, to be held by Tilly Beazley, Mr Jackson’s wife.
3. Includes 100,000 Ordinary Shares held by MDC Nominees Limited, a company controlled by Mr Botros. Mr Botros is a subsidiary director of the Group.
4. Includes Ordinary Shares held by Management Express Limited, a company controlled by Mr Rose. Mr Rose is a subsidiary director of the Group.
* Directors of the Company
On Admission, the Company will have 4,207,497 Ordinary Shares in issue, each with one voting right. There are no shares held in treasury. Therefore, the Company’s total number of Ordinary Shares and voting rights will be 4,207,497 and this figure may be used by shareholders from Admission as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA’s Disclosure Guidance and Transparency Rules.
Extension of deadline for publication of audited accounts to year to 31 December 2019
Due to the current COVID-19 outbreak, the Company will be unable to post its annual audited accounts to shareholders for the year to 31 January 2020 by the 31 July 2020 deadline pursuant to AIM Rule 19. Further to the guidance provided by AIM Regulation in “Inside AIM” on 26 March 2020, the Company requested an additional period of up to three months to publish its annual audited accounts for the year ended 31 January 2020. The Company has already received a three-month extension to 31 October 2020 for the filing of their accounts for the year to 31 January 2020 from Companies House. The Company will provide monthly updates on the Group trading performance prior to the publication of the audited annual report and accounts for the year to 31 January 2020.
Graeme Paton, Chief Executive, commented, “This essential injection of cash, when combined with the capitalisation of liabilities, the stability of the lottery business and the steady growth of the payments business means the outlook for the business is positive despite the challenges all businesses have and continue to face. We will continue to be prudent and focus on improving not just the day to day business performance but also delivering long term balance sheet improvements.”
For further information, contact:
St. James House PLC
020 3655 5000
Allenby Capital Limited
(Nomad, Financial Adviser & Broker)
John Depasquale / Nick Harriss
020 3328 5656
Links to PDMR and PCA Disclosures