TIDMREVB
RNS Number : 5627W
Revolution Beauty Group PLC
13 December 2023
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
For immediate release
13 December 2023
Revolution Beauty Group plc
("Revolution Beauty", the "Group" or the "Company")
Directorate Changes
Settlement of claims with Tom Allsworth and related
arrangements
Directorate Changes
Revolution Beauty Group plc (AIM: REVB), the multi-channel mass
beauty innovator, today announces that Elizabeth Lake has decided
to stand down from the Board with immediate effect. Elizabeth will,
however, remain with the business as Chief Financial Officer
("CFO") until 31 December 2023. Elizabeth will be replaced as CFO
by current non-executive director Neil Catto with effect from 1
January 2024.
During her 18 months as CFO, Elizabeth has strengthened the
Group finance function, completed the signing of historical
accounts, and successfully overseen the lifting of the suspension
and restoration in trading of the Group's shares on AIM.
Neil Catto will become CFO on 1 January 2024, having joined the
Group Board in July 2023 as a non-executive director. He is an
experienced CFO, having previously been Group CFO of boohoo Group
PLC, a position he held for 11 years. Prior to this, he held senior
finance roles at BT, Carphone Warehouse and EY.
The Company is also pleased to announce the appointment of Erin
Brookes to the Board as an independent non-executive director with
immediate effect. Erin is a Managing Director with Alvarez &
Marsal ("A&M") in London, where she leads the European Retail
and Consumer Practice, specialising in retail turnaround and
transformation. Prior to joining A&M, Erin spent five years at
The Body Shop International, a leading global cosmetics retailer,
where she held a range of senior commercial roles.
Alistair McGeorge, Chairman, commented: "Neil has been a trusted
member of the Board since joining five months ago, and I am pleased
that he is now becoming CFO. I have no doubt that his considerable
and relevant experience will prove a real asset as Revolution
Beauty embarks on its next phase of growth. We are also delighted
to welcome Erin. She brings a highly relevant skill set and I am
confident she will make a significant contribution to our future
success.
At the same time, and on behalf of the Board, I would like to
express my sincere thanks to Elizabeth. Her leadership of the
finance team over the past 18 months has proven invaluable in
returning the business to a steady state. I wish her every success
for the future."
Elizabeth Lake, outgoing CFO, stated: "My focus over the past 18
months has been on addressing the well-documented issues the
business has faced. During that time, we have significantly
strengthened the Group's financial position, improved internal
controls and implemented a full set of accounting policies that
enabled the filing of the Group's financial statements and the
resumption in trading of Revolution Beauty's shares. With the
business back to profitability and well placed for sustainable
profitable growth, it is the right time for me to explore new
opportunities. I would like to thank my colleagues for their hard
work and dedication, and I wish them all the best as they continue
to drive the business forwards."
Neil Catto, incoming CFO, added: "As a Board member since July,
I have been hugely impressed with the inherent strength of the
Revolution Beauty business, across its brands, its people and its
products. I believe we have a considerable opportunity within a
large and attractive beauty market, and I look forward to building
on the strong foundations put in place by Elizabeth as the Group
targets long-term sustainable growth."
Settlement of claims with Tom Allsworth and related
arrangements
Revolution Beauty also announces that it has come to an
agreement with Tom Allsworth, the former Executive Chairman and
co-founder of Revolution Beauty, regarding (i) the settlement of
certain claims between Revolution Beauty and Tom Allsworth, (ii)
the timing of future payments relating to the prior acquisition of
Medichem Manufacturing Limited (now called Revolution Beauty Labs
Ltd) ("Medichem") from Tom Allsworth by Revolution Beauty Holdings
Limited (the "Buyer") and (iii) Tom Allsworth's future role within
Medichem.
Settlement Agreement
On 12 December 2023, Tom Allsworth and Revolution Beauty entered
into a settlement agreement (the "Settlement Agreement"), pursuant
to which they agreed to the full and final settlement of certain
claims between them, with no admission or acceptance of liability
by either party.
Pursuant to the Settlement Agreement, Revolution Beauty has
agreed to pay Tom Allsworth an ex gratia payment of GBP270,000 net
(GBP490,000, when grossed up for taxes) in respect of certain
historical legal fees incurred by Tom Allsworth in connection with,
among other things, the investigation of matters related to the
Medichem SPA (as defined below).
Variation to terms of Medichem SPA
On 26 October 2021, Tom Allsworth and the Buyer entered into an
agreement for the sale and purchase of the entire issued share
capital of Medichem for a total consideration of up to GBP27.5
million (the "Medichem SPA"). As announced on 7 March 2023, the
Buyer and Tom Allsworth varied the Medichem SPA on 6 March 2023,
such that the outstanding consideration payable to Tom Allsworth
would be paid in annual instalments of up to GBP5.125 million
between October 2025 and October 2028, with interest accruing on
outstanding balances at a rate of 2.5% per annum. Both transactions
constituted related party transactions under the AIM Rules.
The Board is pleased to announce it has now concluded
negotiations with Tom Allsworth regarding a revised payment
schedule for the outstanding consideration under the Medichem
SPA.
On 12 December 2023, Tom Allsworth and the Buyer entered into a
deed of variation to the Medichem SPA (the "Deed of Variation"),
pursuant to which the total remaining consideration under the
Medichem SPA of GBP19.0 million (the "Remaining Consideration")
will now be repaid in instalments on a revised payment
schedule.
The Buyer now will pay, on or around 31 October of each year
beginning in 2025, an amount equal to the higher of (i) GBP600,000
in the first year of payment, increasing in subsequent years of
payment by the higher of (a) 5% and (b) "CPI 12-month rate" (as
published by the UK Office for National Statistics) for February of
the year in which the applicable payment occurs and (ii) 75% of
Medichem's EBITDA for the preceding financial year. Medichem
generated EBITDA of c.GBP1 million for the year ended 28 February
2023.
In the event of a sale or disposal of Medichem, or a takeover of
Revolution Beauty, within five years of the date of the Deed of
Variation, the payments to Tom Allsworth will be accelerated and
the Remaining Consideration then still outstanding will be payable
in five equal annual instalments beginning on the first scheduled
payment date following completion of such sale or takeover.
Tom Allsworth's future role
As part of the arrangements summarised in this announcement, Tom
Allsworth will continue in the management team of Revolution Beauty
Labs with the title "Founder & Director of Revolution Labs"
(though he will not be a statutory director), on terms which are
substantively similar to those which applied to him previously.
Related party transactions
The signing of the Settlement Agreement, the Deed of Variation
and the arrangement regarding Tom Allsworth's future role with
Medichem constitute a related party transaction under Rule 13 of
the AIM Rules for Companies (the "AIM Rules"), by virtue of Tom
Allsworth being a substantial shareholder, as defined in the AIM
Rules, of Revolution Beauty, holding approximately 15.34% of the
ordinary shares in Revolution Beauty. The directors of Revolution
Beauty consider, having consulted with Revolution Beauty's
nominated adviser, Liberum Capital Limited, that the terms of these
related party transaction are fair and reasonable insofar as
shareholders of Revolution Beauty are concerned.
Adam Minto legal proceedings
Separately, and as originally announced on 20 June 2023, the
Group is continuing to seek a settlement agreement with Adam Minto
relating to the events that led to the delay of the audit of
Revolution Beauty's FY22 results and the suspension of trading of
the Group's shares on AIM during his time as Chief Executive.
Should an agreement be reached, the settlement with Adam Minto
would likely be treated as a related party transaction under Rule
13 of the AIM Rules and an appropriate announcement made at that
time.
For further information please contact:
Investor Relations
Lauren Brindley, CEO
Investor.Relations@revolutionbeautyplc .com
Joint Corporate Brokers
Liberum (NOMAD): Edward Thomas / Dru Danford / John More
Tel: +44 (0) 203 100 2222
Zeus: Nick Cowles / Jamie Peel / Jordan Warburton
Tel: +44 (0) 161 831 1512
Media enquiries
Headland Consultancy: Matt Denham / Will Smith / Antonia
Pollock
Tel: +44 (0)20 3805 4822
Revolutionbeauty@headlandconsultancy.com
The person responsible for arranging the release of this
announcement on behalf of the Company is Lauren Brindley, the Chief
Executive Officer of the Company.
Notes
The following information regarding the appointment of Erin
Brookes, aged 44, is disclosed under Schedule Two, paragraph (g)
(i)-(viii) of the AIM Rules:
Current directorships and partnerships
Alvarez & Marsal Corporate Transformation Services LLP
Retail Trust
Retail Trust Events Limited
Retail Trust Wellbeing Services Limited
Erin currently holds no shares in the Company.
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END
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