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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END
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