SJH.L Regulatory News (SJH)

30 July 2021

ST JAMES HOUSE PLC

 ("SJH", the "Group" or the "Company")

AGM Statement & Strategy Update

At the Company's annual general meeting ("AGM") to be held today, Richard Shearer, the Company's recently appointed CEO, will make the following AGM Statement and provide a Group Strategy Update, as indicated in the announcement of the Company's annual results on 27 July 2021.

AGM Statement

The Last Three Months

"I would like to introduce myself to shareholders and set some out the stall for our plans going forward.

I have been conscious that I want to report on matters once they are completed or at the very least contracted, so as to move away from the forward-looking statements that formed a large part of the Company's reporting methodology of the past. I hope this will go some way to building a relationship with shareholders based on defined and executable goals that engender trust in the process. 

The overarching philosophy is to build a corporate culture and business model that allows for a well-run, tightly controlled business that is able to be nimble and scalable at speed.

We have moved quickly over the past three months during which the company has been undergoing a rigorous internal reorganisation. I have been working hard with teams both internally and externally to "right size" the Group, cut costs and to create a vision for the future that builds on the foundations of both SJH and Tintra's experiences in a way that creates shareholder value and builds a model for the future.

To that end we produced an internal Positioning Document that outlined a 90-day Change Management Process. This document included a number of items, again internal and external that we have, for the most part, completed. The result is that we now have a team that is streamlined and a cost base that is rationalised, as announced on 13 July 2021.

As you may have seen from earlier announcements, our starting point was to undertake a deep dive of the business and see where there was value and more importantly where there was not. This was done with the goal of building a strong, efficient, cost-effective foundation from which to grow. Any business is only as strong as its weakest point, and as such we wanted to ensure that was where we started.

We had no preconceptions at the start of that process; however, it quickly became evident what needed to be done. To that end we were able to cut the staffing overhead for a material saving. This cost cutting took further form in the disposal of the legal claims business. This business needed substantial new investment and even with such investment its ability to scale was capped and we took the view that it was a better private business than as part of our public one. 

We continue our analysis of the lottery business, which we expect to finish during August 2021, at which time we will submit options to the Board and announcements will be made that outline the plans for that business unit.

We have done a lot of work to rationalise the business and prepare it for growth. The process is not entirely complete, but it is materially so, and the team will complete it within the next 4-6 weeks at which time further announcements will be made. I will now outline of the future strategy of the Group, as announced earlier today."

Strategy Update

The Future

"As we head into the AGM and we rebrand the Group, our minds are strongly focused on the horizon and what shape the future may take. The Company historically has perhaps lacked a clear, well-defined vision.

I take the view that for success a company needs to identify a need, articulate a mission, define success and have a strategy to execute on these components. That is what we have done and will continue to do.

Tintra Holdings has for many years been focused on servicing emerging market UHNW families and corporates with their cross-border investment needs, it is something that we have a deep understanding of and over the past few months, we have been working hard to fold that knowledge into SJH.

We have identified a gap in the market that in our view nobody is filling sufficiently well, and we believe that we in turn are well placed to win that space.

Over the past decade, trade and investment between emerging markets and advanced economies have become largely borderless and frictionless - the ability to make payments for that trade has not.

We are developing a plan to build an emerging market focused banking technology and infrastructure to enable financial institutions, multinationals and large corporates in the emerging world to access global banking infrastructure without bias or prejudice in an environment where we control the compliance exposure from end to end.

Competitors such as Revolut have filled this space domestically, Wise PLC have achieved great things solving the problem from the 'west' to frontier markets. Nobody is solving the problem the other way around in a meaningful way. We intend to fill in this gap.

An uneven playing field has grown where emerging market businesses cannot get clear banking routes due to the lack of understanding of their markets. Legacy banks' KYC/AML framework has not kept pace with the emergence of new territories onto the global financial scene.

A misguided methodology has developed in the space whereby compliance teams don't understand what a 'good' compliance pack looks like versus a 'bad' compliance pack. As a result, they label entire jurisdictions as 'bad' - something that is clearly not correct.

Over the past few years E-money & challenger banks have grown to try to fill this void, but for the most part have become very siloed and inward facing with limited jurisdictional reach.

At Tintra we have been passionate about fighting this prejudice, that derives simply from a lack of jurisdictional understanding, for a long time and the aim with the payments business is to grow this unit in a way that neutralizes these prejudices in a fashion that nobody else is attempting and in doing so to achieve a scalable business that has revenue streams from merchant services, payments, foreign exchange and technology licensing.

We plan to do this by building our own banking infrastructure that moves away from the concept of 'payments' and into building an international banking infrastructure where we control the entire end to end process.

E-money challengers are only as strong in a new vertical as their banking partner; our strategy is to build deep infrastructure that has best in class technology which includes e-money along with banking licenses.

We have identified that there are many players in the market that solve parts of the current needs and problems, but nowhere is a holistic solution available. We have been watching this for a couple of years and feel that now is the right time.

Tintra PLC will build regulation-first technology banking that provides cross border banking services to large corporates and multinationals in emerging market jurisdictions who have need to access developed markets, either because that is the location of their main HQ or that they have meaningful trade with the territory in a way that they either cannot or find difficult in the current status quo.

How we plan to do it

Our view is that the only way to solve this problem is to build banking infrastructure that is compliance led, using a hub and spoke system that will be able to provide frictionless banking for major organisations in developing markets.

This is a big vision and one that will require funding, dedication and a lot of hard work over the coming months and years. We strongly believe we are building the right team to be able to execute this.

A number of steps have been taken to assist us in the first part of achieving that goal. We have engaged DLA Piper to act for the Company as advisor, in the first instance, on the change management process completion and to build a framework from which to scale quickly and effectively.

We have further engaged Bruce Wallace, a chartered company secretary focused on Public Companies, to act with building the business best governance framework and to provide Company Secretarial support going forward.

We have also engaged with OTC Markets to commence the process of a reciprocal trading facility on the OTCQXB Venture Market in the United States. This market is designed to allow developing international companies to be publicly traded in the United States. This is a cost-effective way for our Company to be able to provide access to our stock to US investors.

Our strategy is to build a licence framework in key jurisdictions. In the first instance it is our plan to obtain a FCA Electronic Money Institution licence, either by application or acquisition and have undertaken a deep dive analysis of the sector in the United Kingdom. We expect to be announcing the results of this process during September.

To begin the process of overseas growth in a strategic location we have engaged Sharq Law Firm, one of Qatar's premier operators, to begin the process of applying for a full banking licence in the Qatar Financial Centre. We have already had a number of discussions with the Qatar Financial Centre and have received interim approvals. Our formal submission will be submitted in the next two weeks. This process is expected take 10-12 months to complete.

We have also begun conversations in two other territories and these will be announced to the market once we have matured those discussions to a material point.

Tintra has committed funds to the business to date and will continue to do so in the short term, but of course the above plans require funding. To that end we are already speaking to a number of partners around the world to articulate our plans and to budget a potential fund raise over H2 2021.

We have been conscious to ensure that we are validating our strategy as we move through this process and over the past two months have been developing relationships with two major partners. Should these reach a contractual stage, we will make a further announcement, which will provide flows across all of the verticals mentioned above and form the backbone of the growth strategy in the early stages.

Our vision is strong, and our execution strategy is well defined, but this is a big plan and is unlikely to be a straight line of achievement. But the gap exists, and it is something we have been market researching for a number of years, so we believe we are the best placed team to execute on it. More announcements will be forthcoming in the coming weeks."

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