Personal Group Regulatory News (PGH)

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

Personal Group Holdings Plc

("the Company" or "the Group")

Proposed Acquisition of Innecto People Consulting Limited

Proposed Board Changes

Proposed Subscription for New Ordinary Shares

and

Notice of General Meeting

Personal Group PLC, a leading provider of employee services in the UK, announces the conditional acquisition of Innecto People Consulting Limited ("Innecto"), a leading UK independent pay and reward consultancy, for a cash consideration of £3 million (subject to adjustment) (the "Acquisition"). Furthermore, the Company announces the proposed appointment of Deborah Frost, Non-Executive Director, as Chief Executive Officer of the Group with effect from completion of the Acquisition.

A circular providing, amongst other things, details of the Acquisition is today being posted to Shareholders (the "Circular"), together with a notice of General Meeting and Form of Proxy. These documents will be made available on the Company's website at www.personalgroup.com.

Highlights

· Deborah Frost to be appointed Chief Executive Officer of Group

· Acquisition of Innecto for a cash consideration of £3 million (subject to adjustment)

· Acquisition expected to be immediately earnings accretive

· Vendors of Innecto, Deborah Frost and Justine Woolf, to subscribe for new ordinary shares in the Company

· General Meeting to be held on 27 February 2019 to approve the Acquisition as a "substantial property transaction" for the purposes of section 190 of the Companies Act 2006

Mark Winlow, Chairman, commented:

"We are delighted to welcome Deborah as Personal Group's new Chief Executive. Her wealth of experience in the reward and performance sector, as well as her contribution to the Board since 2015, mean she is well-placed to lead the Company through the next stage of its development. I would like to thank Mark Scanlon for his immense contribution and leadership of the Company over the last six years. We wish him all the best for the future."

Deborah Frost, proposed Chief Executive, commented:

"I am honoured and excited at the prospect of becoming Chief Executive of Personal Group. Having served on the Board as Non-Executive Director since 2015, I have seen first-hand the business's talented team and management, brilliant culture, and strong growth potential. I look forward to building on Mark's achievements and continuing the Board's strategy to establish Personal Group as a leading provider of employee insurance, benefits and reward."

Introduction

The Company announces that it has entered into a sale and purchase agreement in respect of the entire issued and to be issued share capital of Innecto, a leading UK independent pay and reward consultancy, for £3 million payable in cash on Completion (subject to adjustment). The Acquisition is conditional, amongst other things, on the passing of the Resolution at the General Meeting. The Resolution seeks the approval by Shareholders of the Acquisition. The Approval is required as one of the Directors, Deborah Frost, is the majority shareholder in Innecto and consequently the Acquisition constitutes a "substantial property transaction" for the purposes of section 190 of the 2006 Act.

In addition, it is proposed that Deborah Frost, currently a Non-Executive Director of the Company, will become the Chief Executive Officer, replacing Mark Scanlon who it was previously announced would step down from that role. Deborah Frost has agreed to subscribe for approximately £1,041,348 of Ordinary Shares.

The Circular, which is today being posted to Shareholders, explains the background to, and reasons for, the Acquisition, the proposed Board changes and the Subscriptions, and sets out why the Independent Directors consider the Acquisition to be in the best interests of Shareholders, as a whole.

Background to, and reasons for, the Acquisition

The Board believes that Innecto presents an attractive acquisition opportunity as a well-established, complementary business in the employee benefits sector. The Acquisition will strengthen the Group's position as one of the leading comprehensive providers of Employee Services in the UK.

Following completion of the Acquisition, the enlarged Group will benefit from an expanded customer base, including blue-chip clients, allowing for cross-selling opportunities. The Board has identified sales and marketing expertise as a key strength of Innecto's business. Following the Acquisition, the Group expects to leverage this expertise to expand its product offering to new clients, as well as securing higher retention rates with existing customers.

The Acquisition is expected to be immediately earnings accretive to the Group following Completion.

Proposed Board changes

On 18 September 2018, the Company announced that Mark Scanlon, Chief Executive Officer, had notified his intention to step down from the Board on or before 17 September 2019. It is proposed that Deborah Frost, currently a Non-Executive Director, will be appointed as the Company's Chief Executive Officer with effect from 28 February 2019 and, at the same time, Mark Scanlon will step down from the Board.

Deborah is a reward and performance expert and has led multiple global projects in pay structure, variable pay design, total reward, performance management and reward strategy. She is a Chartered Fellow of the CIPD.

Deborah has a diverse background in industry and consultancy, working for both Marks and Spencer plc and Nationwide Building Society before joining Towers Perrin in 2000. Deborah co-founded Innecto in 2002. As well as being a Director of Innecto, Deborah was previously a Director of Artemis Partners Limited and Shipstar Limited. She is currently Non-Executive Director of Personal Group.

The Board welcomes Deborah's appointment as Chief Executive Officer and looks forward to the benefit of her wealth of sector expertise. Having served on the Board since 2015 and been a Director of Innecto since 2002, she is well-placed to lead the enlarged Group and execute on its growth strategy.

The Acquisition

Innecto was established in 2002 and is a leading UK independent pay and reward consultancy helping clients attract, retain and motivate their employees. It services over 100 clients ranging from large multinationals to fast growing SMEs. Innecto specialises in offering practical solutions to pay structures, bonus schemes, gender pay reporting and benchmarking. Its business is predominantly consultancy-based and it is supported by growing digital and SaaS offerings, currently through its Evaluate and PayLab products.

Deborah Frost, currently a Non-Executive Director of the Company, is a Co-Founder and Director of Innecto.

For the year ended 31 March 2018, Innecto generated sales and profit before tax of approximately £1.6 million (unaudited) and £0.4 million (unaudited), respectively. As at 31 March 2018, Innecto had gross assets of approximately £0.8 million (unaudited).

The Company entered into the Acquisition Agreement with the Sellers on 6 February 2019. Pursuant to the terms of the Acquisition Agreement, and conditional on the passing of the Resolution, the Company has agreed to acquire the entire issued and to be issued share capital of Innecto for aggregate cash consideration of £3 million, such consideration to be allocated between the Sellers in accordance with the terms of the Acquisition Agreement. The cash consideration for the Acquisition will be subject to a net cash and normalised working capital adjustment in accordance with the terms of the Acquisition Agreement. The Acquisition is scheduled to complete on 28 February 2019, assuming that the Resolution is passed at the General Meeting by the requisite majority.

The Subscriptions

Deborah Frost and Justine Woolf have, in accordance with the terms of their respective Subscription Agreements, agreed to subscribe for the Subscription Shares. The Subscription Shares will be subject to lock-in undertakings in customary terms (and subject to customary exemptions (including if their employment with the Group is terminated by the Company or any other member of the Group for any reason)) for a period of three years from the date of Admission.

Pursuant to the terms of their respective Subscription Agreements, Deborah Frost has agreed to subscribe for £1,041,348 of Subscription Shares and Justine Woolf has agreed to subscribe for £109,451 of Subscription Shares, in each case, at a subscription price equivalent to the average Closing Price of the Ordinary Shares for the period commencing on the date which is five Business Days prior to (but excluding) the date of the General Meeting (the "Subscription Price").

The Subscription Agreements are conditional upon, amongst other things, Admission occurring.

Current Trading

On 10 January 2019, the Company issued a trading update following its financial year ended 31 December 2018 which included the following statement:

"Though the Company has broadly traded in line with expectations in 2018, the challenges experienced by each if its divisions, combined with the wider economic uncertainty related to the UK's withdrawal from the EU, have led the board to adopt a more conservative outlook in regard to the Let's Connect and Insurance Business in 2019. As a consequence, profitability is unlikely to grow materially from 2018. Personal Group remains in a robust position as it enters 2019, with a market leading offer and a proven team to support it. The market for employee benefits also remains strong, with continued pressure on businesses to improve productivity and staff retention in a tight labour market."

Current trading for the Group continues in line with the statements made in the trading update on 10 January 2019.

Irrevocable Undertaking and Letter of Intent to vote in favour of the Resolution

The Company has received an irrevocable undertaking from Christopher Johnston, its largest shareholder, to vote, or procure the vote, in favour of the Resolution in respect of the Ordinary Shares in which he has a beneficial interest, amounting to, in aggregate, 11,524,722 Ordinary Shares, representing approximately 37.3 per cent. of the issued ordinary share capital of the Company as at 5 February 2019, being the latest practicable date prior to the publication of this announcement.

In addition, the Company has received a letter of intent from Miton Asset Management Limited, its second largest shareholder, indicating its intention to vote, or procure the vote, in favour of the Resolution in respect of the Ordinary Shares controlled by it, amounting to, in aggregate, 3,835,503 Ordinary Shares, representing approximately 12.4 per cent. of the issued ordinary share capital of the Company as at 5 February 2019, being the latest practicable date prior to the publication of this announcement.

In total, therefore, the Company has received an irrevocable undertaking and letter of intent to vote, or procure the vote, in favour of the Resolution in respect of 15,360,225 Ordinary Shares, in aggregate, representing approximately 49.7 per cent. of the issued ordinary share capital of the Company as at 5 February 2019, being the latest practicable date prior to the publication of this announcement.

Substantial Property Transaction

The Acquisition is a substantial property transaction involving a Director of the Company for the purpose of section 190 of the 2006 Act. Accordingly, the Acquisition is subject to and conditional upon the approval of Shareholders under section 190 of the 2006 Act. The Resolution is being proposed at the General Meeting in order to seek this Approval. Deborah Frost has not taken part in the Board's consideration of the Acquisition.

General Meeting

The Circular contains a notice convening the General Meeting to be held at the offices of the Company at John Ormond House, 899 Silbury Boulevard, Milton Keynes MK9 3XL at 1.00 p.m. on 27 February 2019.

The Resolution to be proposed at the General Meeting is an ordinary resolution to approve the Acquisition. The Approval is required as one of the Directors, Deborah Frost, is the majority shareholder in Innecto and consequently the Acquisition constitutes a "substantial property transaction" for the purposes of section 190 of the 2006 Act.

Definitions

- ENDS -

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This announcement does not constitute an offer to buy, acquire or subscribe for (or the solicitation of an offer to buy, acquire or subscribe for), Ordinary Shares or an offer to buy, acquire or subscribe for (or the solicitation of an offer to buy, acquire or subscribe for), the Subscription Shares.

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", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward looking statements include matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the Directors' current intentions, beliefs or expectations concerning, among other things, the Group's results of operations, financial condition, liquidity, prospects, growth, strategies and the Group's markets.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results and developments could differ materially from those expressed or implied by the forward-looking statements.

Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement are based on certain factors and assumptions, including the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations, results of operations, growth strategy and liquidity. Whilst the Directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect. Save as required by law or by the AIM Rules, the Company undertakes no obligation to publicly release the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this announcement.

Notes to Editors:

Personal Group Holdings Plc (AIM: PGH) is a technology enabled employee services business, working with employers to drive productivity though better employee engagement and a more motivated workforce. With over 30 years' experience, the Company provides employee benefits and services to over 2 million employees across the UK.

Personal Group's offer comprises 8,000 in-house and third party products and services, from c.60 supply lines. In-house services include employee insurance products (hospital, convalescence plans and death benefit) and the provision of home technology via salary sacrifice (iPads, computers, laptops, smart phones and smart TVs). Third party services include retail discounts, e-payslips, employee assistance programmes, wellbeing programmes and salary sacrifice cars and bikes.

The offer is provided via the Company's proprietary technology platform, Hapi. The platform is intuitive, designed primarily for app deployment and also accessible via web and tablet, driving better engagement, communication and value recognition. Hapi is flexible and can quickly integrate additional services, such as existing employee services and partner platforms. Hapi is a SaaS product.

Through technology and select acquisitions, the Company has grown its addressable market from 6m to over 27m UK employees; including 15.6m SME employees targeted via its partnership with Sage, the UK's largest software company.

Personal Group's innovative approach to using technology to deliver its programmes, combined with its face-to-face method of communicating with employees, makes its offer compelling to blue chip clients across the UK as a way of attracting, retaining and motivating employees.

Personal Group has a strong client base across a range of sectors including passenger transport, healthcare, logistics and food manufacturing. Clients include: Stagecoach, Four Seasons Health Care, Priory Group, Spire Healthcare, Bibby, 2 Sisters Food Group and Young's Seafood.

For further information, please see www.personalgroup.com