HOTC.L Regulatory News (HOTC)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR IN OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW OR REGULATION.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN HOTEL CHOCOLAT GROUP PLC OR ANY OTHER ENTITY IN ANY SUCH JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014.

Hotel Chocolat Group plc

("Hotel Chocolat", the "Company" or the "Group")

COVID-19 Update and Placing to raise £20 million

Hotel Chocolat, premium British chocolatier and multi-channel retailer, today updates the market on current trading and the impact of coronavirus (COVID-19). The Company is pleased to also announce it is undertaking a placing to raise £20 million (the "Placing") through the issue of 8,888,888 new ordinary shares of 0.1 pence each (the "New Ordinary Shares") at a price of 225 pence per share (the "Placing Price").

Trading Update & Impact of Coronavirus

Trading both in the UK and in the Company's international markets of the USA and Japan had been encouraging up to the end of February with Group revenue having increased by 6% year-on-year in February.

However, in common with the broader sector, the Company's trading in March-to-date has inevitably slowed as the outbreak of COVID-19 has impacted footfall both in the UK and internationally with Group retail revenue having decreased by 5% year-on-year in March-to-date.

With the increasing possibility that the UK Government will impose further public health measures, the Group anticipates the ongoing effect of COVID-19 and the continued reduction in high-street footfall is likely to result in some or all of the Company's stores being closed for a period, which will impact Company sales and profits. Mother's Day and Easter, two important trading periods for the Company, typically contribute c.12% of the Group's annual revenue.

The Company has many measures at its disposal to reduce the impact of COVID-19 virus on the business including, but not limited to leveraging its highly successful multi-channel model by rebalancing inventories toward online and digital wholesale. The Group maintains a strong relationship with its lending bank and cash on the balance sheet and is also undertaking proactive measures to reduce costs, optimise working capital and preserve cash. The Company is refining its plans regularly as the situation develops. In addition, the recent Government announcements regarding business rates and HMRC time to pay will provide a material working capital benefit to the Group over the next 12 months.

Further to these measures, the Company is today also undertaking a Placing to raise £20 million through an accelerated bookbuild, further details of which are outlined below. Notwithstanding the challenges currently being faced due to COVID-19, the Group remains committed to the Company's long-term growth plans which should deliver meaningful Shareholder value over the next five years. This fundraise of £20 million should not only provide the growth capital required but also provide additional flexibility if it so becomes needed.

The Hotel Chocolat brand is strong and the Company's longer-term growth plans and opportunities in the UK, the USA and Japan remain unchanged. During these uncertain times the Company continues to remain focused on protecting its staff and customers.

Details of the Placing

The Company is pleased to also announce it is undertaking a placing to raise £20 million (the "Placing") through the issue of 8,888,888 new ordinary shares of 0.1 pence each (the "New Ordinary Shares") at a price of 225 pence per share (the "Placing Price").

The Placing is being conducted through an accelerated bookbuild process (the "Bookbuild"), which will be launched immediately following this Announcement.

Liberum Capital Limited ("Liberum") is acting as sole broker in relation to the Placing. A placing agreement has been entered into between the Company and Liberum in connection with the Placing.

Placing Highlights

Reasons for Placing

Since IPO the Company has continued to deliver impressive growth both to sales and profitability whilst maintaining a disciplined approach to growth and capital investment. In common with the broader sector, the Company's trading in March to date has inevitably slowed as the outbreak of the COVID-19 virus has impacted footfall both in the UK and internationally.

However, with the increasing possibility that the UK Government will impose further public health measures and as the UK approaches Mother's Day and Easter, two important trading periods for the Company, the Group anticipates that the ongoing effect of the COVID-19 virus and the continued reduction in high-street footfall is likely to result in some or all of the Company's stores being closed for a period, which will impact Company sales and profits.

The Group remains committed to the Company's long-term growth plans which should deliver meaningful Shareholder value over the next five years. To accommodate this, and considering the challenges being faced due to COVID-19, the Group is undertaking a Placing to raise £20 million which should not only provide the growth capital required but also provide additional flexibility if it so becomes needed over the next few months. The Group remains confident of the Company's longer-term growth plans and opportunities in the UK, the USA and Japan.

The Company therefore proposes raising £20 million by way of a Placing, with the net proceeds utilised to fund growth capital investment in the following (as well as providing additional headroom):

The Company intends to phase the capital spend over the next 12 months allowing for additional financial flexibility if it is required. The Company currently has a general authority to issue 5,641,000 New Ordinary Shares on a non pre-emptive basis as well as an additional authority to issue a further 5,641,000 New Ordinary Shares on a non pre-emptive basis in connection with capital investment of a kind contemplated by the Statement of Principles on Disapplying Pre-Emption Rights published by the PreEmption Group. Whilst the Company intends to use all of the net proceeds of the Placing to fund the capital investments as set out above, if circumstances change, it may use half of the net proceeds, being £10 million, (representing the proceeds of the issue of New Ordinary Shares under the general authority) for working capital requirements.

Expected Timetable for the Placing

Each of the times and dates above refer to London time and are subject to change. Any such change will be notified to Shareholders by an announcement on a Regulatory Information Service.

Additional information on the Placing is included below. Attention is also drawn to the section headed 'Important Information' and to the Appendix to this Announcement containing, inter alia, the terms and conditions of the Placing (representing important information for placees only). The number of New Ordinary Shares to be placed in connection with the Placing will be agreed by the Company and Liberum at the close of the Bookbuild process, and the results of the Placing will be announced as soon as practicable thereafter. The timing of the closing of the book, pricing and allocations is at the absolute discretion of Company and Liberum.

Terms used but not defined elsewhere in this Announcement shall have the meanings given to such terms in the Definitions section of the Appendix to this Announcement.

This announcement is released by Hotel Chocolat Group plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Matt Pritchard, Chief Financial Officer.

For further information:

Notes to Editors:

Hotel Chocolat is a premium British chocolatier with a strong and distinctive brand. The business was founded in 1993 by Angus Thirlwell and Peter Harris and has traded under the Hotel Chocolat brand since 2003. The Group sells its products online and through a network of locations in the UK and abroad. The Group has a cacao plantation and eco-hotel in Saint Lucia, offering complete cacao immersion through tree-to-bar experiences and wellness treatments. The Group also has a flagship restaurant and cacao roastery in London's Borough Market: Rabot 1745. The Group was admitted to trading on AIM in 2016.  

ADDITIONAL INFORMATION

Details of the Placing

The Company is proposing to raise £20 million (before expenses) pursuant to the Placing. The Placing Price represents a discount of 3.0 per cent. to the Closing Price on 19 March 2020, the last trading day prior to this Announcement.

The Placing will be conducted by way of a non pre-emptive share issue and follows a wall crossing exercise and discussions with a number of significant Shareholders. The Directors believe that this is the most cost effective and reliable method to raise funds. The Directors consider that the potential long-term value creation benefit to Shareholders arising from the application of the net Placing proceeds outweighs the dilutive effects of the Placing. The New Ordinary Shares will be issued pursuant to the authorities granted at the 2019 annual general meeting including the additional authority to issue shares on a non pre-emptive basis in connection with capital investment of a kind contemplated by the Statement of Principles on Disapplying Pre-Emption Rights published by the PreEmption Group.

The Placing, which is being arranged on behalf of the Company by Liberum, is conditional, inter alia, upon Admission and subject to the terms of the Placing Agreement.

The Placing Agreement contains customary warranties and indemnities given by the Company to Liberum (and Liberum alone) with respect to its business and the Group and to certain matters connected with the Placing. The Placing may be terminated by Liberum in the event of, inter alia, a material breach by the Company of the terms of the Placing Agreement (including the warranties) or a material adverse change in the condition of the Group. Under the terms of the Placing Agreement, the Company has agreed to pay Liberum, in consideration for its broking services in respect of the Placing, a commission representing a percentage of the gross proceeds raised in the Placing.

The Appendix to this Announcement (which forms a part of this Announcement) contains the detailed terms and conditions of the Placing.

The New Ordinary Shares are being offered by way of an accelerated bookbuilding process (the "Bookbuild"), which will be launched immediately following this Announcement in accordance with the terms and conditions set out in the Appendix to this Announcement. Liberum will be acting as sole bookrunner in connection with the Bookbuild. The Placing is not being underwritten.

The Bookbuild will determine final demand for and participation in the Placing. The timing of the closing of the Bookbuild is at the absolute discretion of the Company and Liberum, but is expected to be no later than 4.30 p.m. today, 20 March 2020. The allocations will be determined by the Company and Liberum in their absolute discretion and will be confirmed orally or by email by Liberum following the close of the Bookbuild. A further announcement of the results of the Placing will be made by the Company following the completion of the Bookbuild.

Members of the public are not entitled to participate in the Placing. The New Ordinary Shares will be issued credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after the admission of the New Ordinary Shares and will otherwise rank on admission pari passu in all respects with the Existing Ordinary Shares. Accordingly, the New Ordinary Shares will not be entitled to receive the interim dividend previously announced on 25 February 2020 to be be paid on 15 April 2020 to Shareholders on the register on 6 March 2020. The New Ordinary Shares are not being made available to the public and are not being offered or sold in any jurisdiction where it would be unlawful to do so.

Admission, Settlement and CREST

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will be effective and trading in the New Ordinary Shares will commence at 8 a.m. on 24 March 2020.

The Articles permit the Company to issue shares in uncertificated form. CREST is a computerised paperless share transfer and settlement system which allows shares and other securities to be held in electronic rather than paper form. The Existing Ordinary Shares are already admitted to CREST and therefore the New Ordinary Shares will also be eligible for settlement in CREST. The New Ordinary Shares due to uncertificated holders are expected to be delivered in CREST on 24 March 2020.

IMPORTANT INFORMATION

This Announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward- looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "forecasts", "plans", "prepares", "anticipates", "projects", "expects", "intends", "may", "will", "seeks", "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Announcement and include statements regarding the Company's and the Directors' intentions, beliefs or current expectations concerning, amongst other things, the Company's prospects, growth and strategy. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual performance, achievements and financial condition may differ materially from those expressed or implied by the forward-looking statements in this Announcement. In addition, even if the Company's results of operations, performance, achievements and financial condition are consistent with the forward-looking statements in this Announcement, those results or developments may not be indicative of results or developments in subsequent periods. Any forward-looking statements that the Company makes in this Announcement speak only as of the date of such statement and (other than in accordance with their legal or regulatory obligations) neither the Company, nor Liberum nor any of their respective associates, directors, officers or advisers undertakes any obligation to update such statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

Liberum is authorised and regulated by the Financial Conduct Authority (the "FCA") in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing or any other matters referred to in this Announcement, and Liberum will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this Announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Liberum or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The New Ordinary Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the New Ordinary Shares have been subject to a product approval process, which has determined that the New Ordinary Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, Distributors should note that: the price of the New Ordinary Shares may decline and investors could lose all or part of their investment; the New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Liberum will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to New Ordinary Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") (WHICH IS FOR INFORMATION PURPOSES ONLY) ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE "EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(E) OF REGULATION 2017/1129, AS AMENDED FROM TIME TO TIME (THE "PROSPECTUS REGULATION") ("QUALIFIED INVESTORS"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS); (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC) OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

The New Ordinary Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act") or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from the registration requirements of the US Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States. The New Ordinary Shares are being offered and sold only (i) outside of the United States in accordance with Regulation S under the US Securities Act ("Regulation S") and otherwise in accordance with applicable laws and; (ii) in the United States to a limited number of "qualified institutional buyers" ("QIBs") as defined in Rule 144A under the US Securities Act pursuant to an exemption from the registration requirements of the US Securities Act. There will be no public offer of the securities mentioned herein in the United States.

This announcement and the information contained herein is restricted and is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into or from Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction in which such release publication or distribution would be unlawful.

Each Placee should consult with its own advisors as to legal, tax, business and related aspects of a purchase of New Ordinary Shares.

The distribution of this Announcement and/or the Placing and/or the issue of the New Ordinary Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, Liberum or any of their respective affiliates, agents directors, officers or employees that would permit an offer of the New Ordinary Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such New Ordinary Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Liberum to inform themselves about and to observe any such restrictions.

This Announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for any securities in the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction in which the same would be unlawful. No public offering of the New Ordinary Shares is being made in any such jurisdiction.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the New Ordinary Shares and the New Ordinary Shares have not been, nor will they be registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, the New Ordinary Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the EEA.

Persons (including without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notice" section of this Announcement.

By participating in the Bookbuild and the Placing, each Placee will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring New Ordinary Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix.

In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things) that:

No prospectus

The New Ordinary Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require any prospectus or other offering document to be published. No prospectus or other offering document has been or will be submitted to be approved by the FCA in relation to the Placing or the New Ordinary Shares and Placees' commitments will be made solely on the basis of their own assessment of the Company, the New Ordinary Shares and the Placing based on the information contained in this Announcement, the announcement of the number of shares to be issued under the Placing (the "Placing Results Announcement") (together, the "Placing Documents") and any other information publicly announced through a regulatory information service ("RIS") by or on behalf of the Company on or prior to the date of this Announcement (the "Publicly Available Information") and subject to any further terms set forth in the trade confirmation sent to individual Placees.

Each Placee, by participating in the Placing, agrees that the content of the Placing Documents is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any information (other than the Publicly Available Information), representation, warranty or statement made by or on behalf of Liberum or the Company or any other person and none of Liberum, the Company nor any other person acting on such person's behalf nor any of their respective affiliates has or shall have any responsibility or liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. No Placee should consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own attorney, tax advisor, and business advisor for legal, tax and business advice regarding an investment in the New Ordinary Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Placing Agreement and the New Ordinary Shares

Liberum has today entered into the Placing Agreement with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, Liberum, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure placees for the New Ordinary Shares.

The final number of New Ordinary Shares will be set out in a share placing supplement agreed between Liberum and the Company following the Bookbuild (the "Placing Supplement").

The Placing is not underwritten by Liberum.

The New Ordinary Shares will, when issued, be credited as fully paid up and will be issued subject to the Company's articles of association and rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the New Ordinary Shares, and will on issue be free of all claims, liens, charges, encumbrances and equities. Accordingly, the New Ordinary Shares will not be entitled to receive the interim dividend previously announced on 25 February 2020 to be be paid on 15 April 2020 to Shareholders on the register on 6 March 2020. Accordingly, the New Ordinary Shares will not be entitled to receive the interim dividend previously announced on 25 February 2020 to be be paid on 15 April 2020 to Shareholders on the register on 6 March 2020.

Application for admission to trading

Application will be made to the London Stock Exchange plc (the "London Stock Exchange") for the admission of the New Ordinary Shares to trading on AIM ("Admission").

It is expected that Admission of the New Ordinary Shares will occur at or before 8.00 a.m. (London time) on 24 March 2020 (or such later time and/or date as Liberum may agree with the Company) and that dealings in the New Ordinary Shares will commence at that time.

Bookbuild

Liberum will today commence the accelerated bookbuilding process to determine demand for participation in the Placing by Placees (the "Bookbuild"). This Announcement gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any New Ordinary Shares.

Liberum shall be entitled to effect the Placing by such alternative method to the Bookbuild as it may, in its absolute discretion following consultation with the Company, determine.

Participation in, and principal terms of, the Placing

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. Liberum's obligations under the Placing Agreement are conditional on customary conditions including (amongst others) (the "Conditions"):

Liberum may, at its discretion and upon such terms as it thinks fit, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to certain Conditions or, by agreement between the Company and Liberum, extend the time or date provided for fulfilment of any Conditions in respect of all or any part of the performance thereof. The condition in the Placing Agreement relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

If: (i) any of the Conditions becomes incapable of being fulfilled (and is not waived) or if all the Conditions are not fulfilled or (where permitted) waived by Liberum by the relevant time or date specified (or such later time or date as the Company and Liberum may agree); or (ii) the Placing Agreement is terminated in the circumstances specified below under "Right to terminate under the Placing Agreement", the Placing will not proceed and the Placees' rights and obligations hereunder in relation to the New Ordinary Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by it or on its behalf (or any person on whose behalf the Placee is acting) in respect thereof.

Neither Liberum, nor the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any Condition to the Placing, nor for any decision they may make as to the satisfaction of any Condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Liberum.

Right to terminate under the Placing Agreement

Liberum is entitled, at any time before Admission, to terminate the Placing Agreement in accordance with its terms in certain circumstances, including (amongst other things):

Upon termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement, subject to certain exceptions.

By participating in the Placing, each Placee agrees that (i) the exercise by Liberum of any right of termination or of any other discretion under the Placing Agreement shall be within the absolute discretion of Liberum and that it need not make any reference to, or consult with, Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise or failure to so exercise and (ii) its rights and obligations terminate only in the circumstances described above under "Right to terminate under the Placing Agreement" and "Conditions of the Placing", and its participation will not be capable of rescission or termination by it after oral confirmation by Liberum of the allocation and commitments following the close of the Bookbuild.

Lock-up Arrangements

The Company has undertaken to Liberum that, between the date of the Placing Agreement and three months after the Closing Date, it will not, without the prior written consent of Liberum (such consent not to be unreasonably withheld or delayed) or as otherwise contemplated by the Placing Agreement or in accordance with any share incentive arrangement adopted by the Company prior to the date of the Placing Agreement, offer, issue, sell or contract to sell, issue options in respect of or otherwise dispose of any securities of the Company (or any interest therein or in respect thereof) or any other securities exchangeable for or convertible into, or substantially similar to, Ordinary Shares or enter into any transaction with substantially the same effect as, or agree to do, any of the foregoing.

By participating in the Placing, Placees agree that the exercise by Liberum of any power to grant consent to the undertaking by the Company of a transaction which would otherwise be subject to the lock-up provisions under the Placing Agreement shall be within the discretion of Liberum (subject to the requirement that such consent shall not be unreasonably withheld or delayed) and that it need not make any reference to, or consult with, Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise of the power to grant consent.

Registration and Settlement

Settlement of transactions in the New Ordinary Shares (ISIN: GB00BYZC3B04) following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. Liberum reserves the right to require settlement for, and delivery of, the New Ordinary Shares (or any part thereof) to Placees by such other means that they may deem necessary if delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Following the close of the Bookbuild, each Placee to be allocated New Ordinary Shares in the Placing will be sent a trade confirmation in accordance with the standing arrangements in place with Liberum stating the number of New Ordinary Shares allocated to them at the Placing Price, the aggregate amount owed by such Placee to Liberum and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions in respect of the New Ordinary Shares that it has in place with Liberum.

The Company will deliver the New Ordinary Shares to a CREST account operated by Liberum as agent for the Company and Liberum will enter its delivery instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant New Ordinary Shares to that Placee against payment.

It is expected that settlement in respect of the New Ordinary Shares will take place on 24 March 2020 on a delivery versus payment basis.

Subject to the conditions set out above, payment in respect of the Placees' allocation is due as set out below. Each Placee should provide its settlement details in order to enable instructions to be successfully matched in CREST. The relevant settlement details for the Placing Shares are as follows:

Deadline for Placee to input instructions into CREST: 12.00 p.m. on 23 March 2020

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by Liberum.

Each Placee is deemed to agree that, if it does not comply with these obligations, Liberum may sell any or all of the New Ordinary Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Liberum's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and will be required to bear any stamp duty or stamp duty reserve tax or other taxes or duties (together with any interest or penalties) imposed in any jurisdiction which may arise upon the sale of such New Ordinary Shares on such Placee's behalf.

If New Ordinary Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as New Ordinary Shares are issued in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such New Ordinary Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. If there are any circumstances in which any stamp duty or stamp duty reserve tax or other similar taxes or duties (including any interest and penalties relating thereto) is payable in respect of the allocation, allotment, issue, sale, transfer or delivery of the New Ordinary Shares (or, for the avoidance of doubt, if any stamp duty or stamp duty reserve tax is payable in connection with any subsequent transfer of or agreement to transfer New Ordinary Shares), neither Liberum nor the Company shall be responsible for payment thereof.

Representations, warranties, undertakings and acknowledgements

By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with Liberum (in its capacity as bookrunner and placing agent of the Company in respect of the Placing) and the Company, in each case as a fundamental term of their application for New Ordinary Shares, the following:

General

No distribution of Announcement

No prospectus

Purchases by Liberum for its own account

No fiduciary duty or client of Liberum

No responsibility of Liberum for information

Reliance on information regarding the Placing

15.

provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

Conducted own investigation and due diligence

Capacity and authority

Excluded territories

Compliance with US securities laws

Compliance with EEA selling restrictions and the Prospectus Regulation

Compliance with FSMA, the UK financial promotion regime and MAR

Compliance with laws

Depositary receipts and clearance services

Undertaking to make payment

Money held on account

Allocation

No recommendation

Inside information

Rights and remedies

Governing law and jurisdiction

The foregoing representations, warranties, confirmations, acknowledgements, agreements and undertakings are given for the benefit of the Company as well as Liberum and are irrevocable. Liberum, the Company and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, confirmations, acknowledgements, agreements and undertakings. Each prospective Placee, and any person acting on behalf of such Placee, irrevocably authorises the Company and Liberum to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein.

Indemnity

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify on an after tax basis and hold the Company, Liberum and their respective affiliates, agents, directors, officers and employees harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee (and any person acting on such Placee's behalf) in this Announcement or incurred by Liberum, the Company or each of their respective affiliates, agents, directors, officers or employees arising from the performance of the Placees' obligations as set out in this Announcement, and further agrees that the provisions of this Announcement shall survive after completion of the Placing.

Taxation

The agreement to allot and issue New Ordinary Shares to Placees (and/or to persons for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the New Ordinary Shares in question. Such agreement also assumes that the New Ordinary Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the New Ordinary Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other dealing in the New Ordinary Shares, stamp duty or stamp duty reserve tax or other similar taxes or duties may be payable, for which neither the Company nor Liberum will be responsible and the Placees shall indemnify the Company and Liberum on an after-tax basis for any stamp duty or stamp duty reserve tax or other similar taxes or duties (together with interest, fines and penalties) in any jurisdiction paid by the Company or Liberum in respect of any such arrangements or dealings. If this is the case, each Placee should seek its own advice and notify Liberum accordingly. Placees are advised to consult with their own advisers regarding the tax aspects of the subscription for New Ordinary Shares.

The Company and Liberum are not liable to bear any taxes that arise on a sale of New Ordinary Shares subsequent to their acquisition by Placees, including any taxes arising otherwise than under the laws of the United Kingdom. Each prospective Placee should, therefore, take its own advice as to whether any such tax liability arises and notify Liberum and the Company accordingly. Furthermore, each prospective Placee agrees to indemnify on an after-tax basis and hold Liberum and/or the Company and their respective affiliates harmless from any and all interest, fines or penalties in relation to stamp duty, stamp duty reserve tax and all other similar duties or taxes in any jurisdiction to the extent that such interest, fines or penalties arise from the unreasonable default or delay of that Placee or its agent.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable, whether inside or outside the UK, by them or any other person on the subscription, acquisition, transfer or sale by them of any New Ordinary Shares or the agreement by them to subscribe for, acquire, transfer or sell any New Ordinary Shares.

No statement in the Placing Documents is intended to be a profit forecast or estimate, and no statement in the Placing Documents should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The New Ordinary Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM, a market operated by the London Stock Exchange.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, the Placing Documents.

DEFINITIONS