St James House PLC Disposal of Legal Services Business & Cost Savings (1346F)
13 Julio 2021 - 11:30AM
UK Regulatory
TIDMSJH
RNS Number : 1346F
St James House PLC
13 July 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT)
REGULATIONS 2019/310.
13 July 2021
ST. JAMES HOUSE PLC
("SJH", the "Group" or the "Company")
Disposal of Legal Services Business and Programme of Cost
Savings
Disposal of Legal Services Business
The Board of Directors of the Company (the "Board") is pleased
to announce that it has today entered into an agreement for the
disposal of the Company's legal services subsidiary, St. Frances
House Ltd. ("SFH") for a total cash consideration of GBP85,000 (the
"Consideration"). SFH was established in 2020 to explore an
emerging opportunity within the legal claims management sector.
However, the Board has concluded that the required levels of
ongoing investment that would be required to fully develop this
opportunity, as well as management resources, can be better
deployed within its payment services business. The transaction will
have a positive impact on the Group's cashflow during the current
financial year, with ongoing cost savings are estimated at
GBP163,000 per annum, but will result in a charge to the profit and
loss account and a reduction in net assets of approximately
GBP40,000 during the current financial year.
The purchaser of SFH, Bryncae Legal Limited ("Bryncae"), will
receive 100 per cent of the share capital of SFH. The Consideration
payable to the Company is made up of an initial payment of
GBP10,000, followed by 30 monthly payments of GBP2,500. The
Consideration is guaranteed by Saith Cantref Cyf ("Saith"), over
which SJH has been granted a debenture; Saith holds GBP57,500 of
convertible loan stock in the Company. Both Bryncae and Saith are
controlled by Jonathan Edwards, a director of SFH. The
Consideration will be applied by the Company for general working
capital purposes. Four employees of the Group, including Mr Edwards
will be retained by SFH post the disposal, in accordance with UK
TUPE continuity of employment regulations.
Related Party Transaction
As Mr Edwards is a director of a Group company and controls
Bryncae, the Transaction constitutes a related party transaction
under the AIM Rules for Companies. The Board considers, having
consulted with Allenby Capital Limited, the Company's nominated
adviser, that the terms of the transaction are fair and reasonable
insofar as the Company's shareholders are concerned.
Programme of Cost Savings
As announced on 25 March 2021, the Company entered into a
commercial agreement with Tintra Acquisitions Ltd and Tintra
Holdings Ltd, subsequent to which John Cripps and Richard Shearer
joined the Board on 20 April and 2 July 2021 respectively. As part
of this agreement, a comprehensive review of the Group is ongoing
and a business plan has been prepared; this has included a full
review of roles and responsibilities of employees and consultants
which has been carried out across the Group and has resulted in a
restructure to align salary costs with the volume of business and
needs of the Group. This leads to a reduction in our annual
remuneration costs of circa GBP250,000 (equal to around one-third
of the total remuneration costs of the reviewed roles).
During the next 2 months the Group expects to strengthen the
management team of its payment services division, and is seeking to
appoint a Business Development Director, Head of Operations and an
Internal Operations Manager all in line with the growth strategy
detailed in the business plan.
Historically the business has recruited consultants to execute
key roles, however, going forward all personnel will be salaried
and supported by independent non-executive directors further in
line with the revised strategy of the Group and in line with best
practice.
The combined cost reductions outlined above that total around
GBP415,000 will "right size" the business for its current
operation, and will allow the business to operate more efficiently
as the business prepares for future growth. The Board intends to
provide further details of its growth strategy ahead of the
Company's annual general meeting to be held on 30 July 2021.
For further information, contact:
St. James House PLC
Roger Matthews
Website www.sjhplc.com 020 3655 5000
Allenby Capital Limited
(Nomad, Financial Adviser & Broker)
John Depasquale / Nick Harriss 020 3328 5656
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END
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