TIDMELTA

RNS Number : 9892Q

Electra Private Equity PLC

02 November 2021

Electra Private Equity PLC

Completion of the Hostmore plc demerger

and

Update on Strategy, Board Composition, Hotter Shoes Trading and Appointment of Broker

2 November 2021

Electra Private Equity PLC ('Electra', the 'Company') is pleased to announce the successful completion of the demerger of Hostmore plc ('Hostmore') and provides an update on strategy, Board composition, Hotter Shoes trading and the appointment of a new corporate broker.

Completion of the Hostmore demerger

Following approval of the demerger of Hostmore at a General Meeting of Electra shareholders yesterday, the shares of Hostmore (LSE: MORE) are expected to be admitted at 8:00am today to the premium listing segment of the Official List and to trading on the Main Market of the London Stock Exchange.

The demerger marks a significant step towards the completion of the Electra realisation strategy. The Directors remain confident in the future success of Hostmore and wish it well as an independent listed group.

Strategy

Following the demerger of Hostmore, Electra will continue in its current form as a listed Investment Trust pending a process in which shareholder approval will be sought to move its listing from the Main Market to AIM. Subject to that approval, the Company will be renamed Unbound Group plc ("Unbound") and will cease to be an Investment Trust.

Unbound will initially be based on Hotter Shoes ('Hotter'), the main remaining investment owned by Electra. The transformation of Hotter over the past few years has led to a digital first proposition that has returned to growth, is profitable and cash generative. Hotter now sells to almost 30% of the female population of the UK over the age of 55 underpinned by a strong British heritage brand.

As a natural evolution of the Hotter business, Unbound will leverage the highly attractive customer database and the scalable digital infrastructure of Hotter to become a broader business selling other products and services, with related consumer benefits, to the same targeted demographic. This development to incorporate other products and services will be through the curated Unbound digital marketplace working with similarly focused partners enhancing and supporting the wellbeing and active lifestyles of Hotter's customer community

The transition of Electra to Unbound is targeted (subject to shareholder approval) to take place over the coming months, with the first Unbound, non-Hotter revenues targeted in Q2 2022.

Further announcements regarding Electra's transition to Unbound will follow in due course.

Board composition

In preparation for the planned transition of Electra to Unbound, the Board of Electra is pleased to announce the appointment of two new, independent Non-Executive Directors, both of whom bring relevant skills and significant experience to the Board.

Baroness Kate Rock* is Senior Independent Director of Keller Group plc and a Member of the House of Lords where she sits on the Science and Technology Select Committee, and was a director of Imagination Technologies Group PLC until November 2017. She brings significant experience in the development and application of business data, technology and skills.

Suki Thompson* is Founder and Chief Executive Officer of the wellbeing and performance consultancy Let's Reset, Chair of Xeim/Oystercatchers and a Non-Executive Director of Gateley Plc. She brings significant experience in the development and execution of marketing and digital transformation strategies across consumer sectors and has extensive experience of creating and implementing wellbeing programs.

Both new independent Non-Executive Directors will join each of the Audit & Risk, Remuneration and Nominations Board Committees.

As previously indicated, following the demerger of Hostmore, David Lis has stepped down as Senior Independent Director of Electra to fulfil the same role with Hostmore. Stephen Welker has also stepped down from the Board. Both David and Stephen continue to be supportive shareholders. The Board of Electra would like to thank David and Stephen for their significant contribution to the implementation of the Electra strategy over recent years and wish them well.

Paul Goodson will assume the roles of Senior Independent Director and Chair of the Remuneration Committee in succession to David Lis.

Neil Johnson, Chairman of Electra commented:

"The demerger of Hostmore marks a key point in the delivery of our value realisation strategy and we now turn our focus fully to preparation for the transition to Unbound and subsequently delivering continued growth. This transition is reflected in the changes to the Board that we are announcing today. I should particularly like to thank both David and Stephen, on behalf of the Board and our shareholders, for their steadfast support and advice during the evolution of the Electra strategy and its subsequent delivery. It is also a pleasure to welcome Kate and Suki to the Board. They bring outstanding and relevant experience, and we look forward to working with them."

Hotter trading update

Current Hotter trading has been strong and extremely pleasing in light of the market wide supply chain issues and other headwinds facing ecommerce businesses. In H1 FY22 (ending July '21) Hotter generated EBITDA of GBP2.5m from revenue of GBP25m. As at the end of October 2021, over the prior 12 months Hotter generated revenue of GBP50.4m with gross margins and costs consistent with those envisaged in giving medium term guidance at the Unbound Group Capital Markets Day on 15 September 2021.

Hotter is seeing a continuation of the key trends underlying the business including direct to consumer driven revenue growth, gross margin expansion and a rapidly accelerating capture of email addresses taking its database to over one million, up from 850,000 in September 2021. App downloads continue to accelerate and there is also a continuing recovery in sales within the retail channel.

Hotter is seeing a reduction in the supply chain disruption evident at the start of the Autumn / Winter season in August and September. Hotter's UK manufacturing facility has provided some resilience and the reopening of supplier factories following Covid lockdowns in India and Vietnam has allowed product availability to recover in October, with further progress expected before the key November trading period. Product demand has remained high during this period of disruption and Hotter's direct-to-consumer focused model allows some level of back-orders to be accumulated that are being satisfied as components and finished goods become available.

The impact of costs on the supply chain has been primarily in relation to incoming freight costs to accelerate raw material delivery on reopening of supplier factories. Supply disruption has resulted in increased levels, and costs, of air freight. These costs are reflected in trading results over recent months and represent a future opportunity as the supply chain reset continues and sea freight is reintroduced as a more cost effective and environmentally friendly transportation option.

Broker appointment

Electra is pleased to announce the appointment of Stifel Nicolas Europe Limited as corporate broker with immediate effect.

*there is no other information concerning Kate Rock or Suki Thompson which is required to be disclosed pursuant to paragraph 9.6.13 R of the Listing Rules.

S

ENQUIRIES

Electra Private Equity PLC

Gavin Manson, Chief Financial and Operating Officer

020 3874 8300

Vico Partners

John Sunnucks, Iain Rawlinson, Sofia Newitt

020 3957 5045

NOTES TO EDITORS

Electra Private Equity PLC

Electra is a private equity investment trust which has been listed on the London Stock Exchange since 1976. Electra's investment objective is to follow a realisation strategy, which aims to crystallise value for shareholders, through balancing the timing of returning cash to shareholders with maximisation of value. Since 1 October 2016, Electra has distributed over GBP2 billion to shareholders through ordinary dividends, special dividends and share buybacks.

Unbound Group plc

Unbound Group plc will be the parent company for a range of brands focused on the 55+ demographic. Initially focused on Hotter Shoes, Unbound Group will provide a broader range of products and services to support and enhance the active lifestyles and wellbeing of its targeted customer community. This online, digitally led platform will be based on the foundations of Hotter as a trusted brand, cloud based digital infrastructure, and strong customer personalisation through data insight. Unbound Group's expanded offering beyond Hotter footwear will feature apparel and wellness products and services, alongside third-party complementary brands.

Hotter Shoes

Hotter Shoes has been transformed from a retail to a multi-channel business with a strong and growing digital focus over the last 2 years, and is now a fast-growing, profitable and cash-generative e-commerce focused footwear brand. Hotter provides footwear with uncompromising focus on comfort and fit through the use of differentiating technology, to a targeted demographic that values its brand and products. Hotter's direct-to-consumer channels now reach 29% of the female population in the UK over the age of 55, providing them with footwear that allows them to do more of what they love. Cultural and demographic shifts now provide an opportunity to further monetise the existing Hotter customer database and grow it through the addition of similarly themed products beyond footwear.

FURTHER INFORMATION

This announcement is being made for information purposes only in connection with the demerger of Hostmore and the subsequent, proposed transfer of Electra's listing to AIM and its transformation to Unbound Group plc, and does not purport to be full or complete.

The distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and persons into whose possession this document comes should inform themselves about and observe any relevant restrictions. In particular, this document may not be published or distributed, directly or indirectly, in or into the United States of America, Canada, Australia, Japan or South Africa.

The contents of this announcement have been prepared by and are the sole responsibility of Electra.

This announcement does not constitute an offer or invitation to sell or issue, or a solicitation of an offer or invitation to purchase or subscribe for any securities in any jurisdiction nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with any contract therefor.

This announcement may not be relied upon for the purpose of entering into any transaction and should not be construed as, nor be relied on in connection with, any offer, invitation or inducement to purchase or subscribe for, or otherwise acquire, hold or dispose of any securities of Electra and/or Hostmore and shall not be regarded as a recommendation in relation to any such transaction whatsoever.

Stifel Nicolaus Europe Limited ("Stifel"), which is authorised and regulated in the UK by the FCA, is acting as nominated adviser exclusively for Electra in connection with the proposed transfer of Electra's listing to AIM (the "Listing Move") and for no one else in connection with the Listing Move or any other matters described in this announcement and will not regard any other person as a client in connection with the Listing Move or any other matters described in this announcement or be responsible to anyone other than Electra for providing the protections afforded to clients of Stifel nor for providing advice in connection with the Listing Move or any other matters referred to in this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Stifel by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, neither Stifel nor any of its affiliates, directors, officers or employees owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, consequential, whether in contract, in tort, in delict, under statute or otherwise) to any person who is not a client of Stifel for the contents of this announcement or its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, or by any other person(s) in connection with the Listing Move, this announcement, any statement contained herein, or otherwise.

Certain statements made in this announcement are forward-looking statements and by their nature, all such forward-looking statements involve risk and uncertainty. Forward-looking statements include all matters that are not historical facts and often use words such as "expects", "may", "will", "could", "should", "intends", "plans", "predicts", "envisages" or "anticipates" or other words of similar meaning. These forward-looking statements are based on current beliefs and expectations based on information that is known to Electra at the date of this announcement. Actual results of the Electra Group (being Electra and its subsidiary undertakings from time to time), and/or their respective industries may differ from those expressed or implied in the forward-looking statements as a result of any number of known and unknown risks, uncertainties and other factors, including, but not limited to, the effects of the COVID-19 pandemic and uncertainties about its impact and duration, many of which are difficult to predict and are generally beyond the control of Electra. Persons receiving this announcement should not place undue reliance on any forward-looking statements. Unless otherwise required by applicable law or regulation Electra and its advisers (including Stifel) disclaims any obligation or undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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