Smart Metering Systems Regulatory News (SMS)

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX 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 THE UNITED STATES OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

13 September 2021

Smart Metering Systems plc

Proposed equity raise to part-fund significant growth opportunities

Smart Metering Systems plc (AIM: SMS.L) ("SMS" or the "Group"), the fully integrated energy infrastructure company owning and managing meter assets, energy data, grid-scale batteries and other carbon reduction ("CaRe") assets, today announces that it proposes to raise approximately £175 million (before expenses) pursuant to a conditional placing of new Ordinary Shares (the "Placing Shares") to institutional investors (the "Placing" and, together with the Subscription (as defined below), the "Fundraising").

Highlights

· SMS has successfully grown its long-term, index linked annualised recurring revenues ("ILARR") and EBITDA significantly since IPO and the Board believes it appropriate to continue to target continuing strong future growth.

· Following recent wins, SMS now has a contracted smart meter order pipeline of c.2.75 million meters and a pipeline of 470MW of grid-scale battery projects, with a combined £690 million capital expenditure requirement over the next five years.

· The Board proposes to fund this pipeline through a combination of the Group's internally generated cash, the recently increased £420m debt facility and the proposed Fundraising, maintaining leverage at prudent levels and SMS's financial strength to pursue further growth opportunities.

· This capital expenditure is expected to add an estimated £75 million to the Group's annual EBITDA (year ended 31 December 2020: £49.9 million) when fully operational.

· SMS has established itself as a leader in delivering and funding smart energy infrastructure and the technologies required to decarbonise the economy and is developing asset and delivery solutions to meet the substantial challenges and market opportunities presented by the energy transition, decarbonisation and the decentralisation of power generation.

· The Group's energy infrastructure assets have long lifespans, generating long-term and secure, revenues and cashflows.

· The Board has identified further growth opportunities both within the Group's established CaRe products (smart meters, energy data and grid-scale batteries) and developing carbon reduction ("CaRe") products ('behind-the-meter' solar and storage, ADMTM Australia, EV charging and Heat solutions), all of which are underpinned by SMS' fully integrated and established METIS technology platform.

· Placing to be undertaken by way of an accelerated bookbuild exercise (the "Bookbuild") which will be launched immediately following release of this announcement and managed by Cenkos Securities plc ("Cenkos"), Investec Bank plc ("Investec") and RBC Capital Markets ("RBC") (the "Joint Bookrunners").

Miriam Greenwood, Non-Executive Chairman, commented:

"Our contracted smart meter order pipeline and pipeline of grid-scale battery projects represent significant growth opportunities for SMS, as the Group continues to enable the UK's transition to a low carbon energy economy. This next stage of SMS' growth is expected to deliver attractive returns to our shareholders.

"Our recently increased £420m debt facility demonstrates the significant support for our business model, and together with internally generated cash and this proposed fundraising, will enable SMS to invest in the substantial identified growth opportunities ahead and drive long term shareholder value."

For further information:

1. Background to and reasons for the Fundraising

A. Capital Structure

The Net Zero 2050 legislation underpins the significant energy transition occurring in the UK, and the Board believes that SMS is well positioned to participate in, and benefit from, a rapidly developing market which is increasingly underpinned by regulatory and commercial drivers.

SMS has established itself as a leader in delivering and funding smart energy infrastructure and the technologies required to decarbonise the economy. The Group is now developing asset and delivery solutions to meet the substantial challenges and market opportunities presented by the energy transition, decarbonisation and the decentralisation of power generation.

This strategy requires the deployment of significant capital in the short to medium term to enable SMS to capitalise on the opportunity in these asset classes and to achieve the attractive, long-term returns available to those market participants who are both strategically positioned and capitalised. The nature of the energy market is also such that balance sheet strength is a key consideration for the Group's counterparties.

Once operational, the Group's energy infrastructure assets are anticipated to be highly-cash generative, with a targeted EBITDA yield of c.11 per cent. across both smart meters and grid-scale batteries, which the Directors believe will provide long-term, recurring cashflows.

The secure, long-term and predictable nature of the cashflows from the Group's assets, together with SMS' strong track-record as a developer, operator and manager of those assets, underpins the attractiveness of the Group's business model to lenders. The Group is pleased to announce that it has secured a revised debt facility (the "Revised Debt Facility") with six lenders for a total of £420 million, an increase of £120 million on its existing facility (the "Existing Debt Facility"). Further details regarding the Revised Debt Facility are set out in section 3B below.

The Board has carefully considered the appropriate source of capital at the current time to enable it to deliver on its strategic objectives and, in particular, to maintain a prudent level of leverage for a UK-listed group with Net Debt: EBITDA at a maximum of approximately three times. The Board remains focussed on maintaining an optimal capital structure for the Group and considers that overall shareholder value can be accelerated and maximised to the benefit of existing and new Shareholders through the net proceeds of the Fundraising.

To date, the Group has utilised a combination of operating cashflows, debt facilities, asset recycling and equity capital injection to fund its growth. It has also considered other routes, such as partnering arrangements, to allow it to leverage its expertise and match it with the capital provided by others. The Board will continue to keep all options under review for the future funding of the Group.

The Board believes that the opportunities presented by the current market dynamics represent a growth opportunity which can materially enhance returns for existing and new Shareholders and, further, that investing in and retaining ownership of the established CaRe assets currently offers the best opportunity to deliver long term value creation in line with the Group's strategic objectives.

If the Fundraising does not proceed, the Group will consider the appropriateness of its current growth plan in the context of the financial resources available to it.

B. Potential Financial Returns

SMS has delivered consistent growth since its IPO in 2011. Over the last decade, the Group's ILARR and EBITDA have grown at a compounded annual growth rate of between 36 per cent. and 37 per cent. respectively (after adjusting for the sale of a minority of the Group's meter assets in March 2020), whilst seeking to have a prudent Net Debt: EBITDA ratio. Throughout this period, the Group has taken a pro-active approach to its strategic positioning, particularly in the early stages in the development of new markets. In doing so, SMS has made a number of small, strategic acquisitions and has utilised a range of financing sources which, in each case, have been assessed by the Board to result in an appropriate capital structure for the Group whilst enabling it to establish a leading market share.

In aggregate, the Group's current meters and battery pipelines will require total capital investment of c.£690 million over the next five years which, with a targeted blended rate of EBITDA yield of c.11 per cent. across both smart meters and grid-scale batteries, is expected to deliver an estimated £75 million increase in Group annual EBITDA when fully operational.

Having invested a total of £570 million in the decade since its IPO, this represents a significant step-change in both investment profile and opportunity for the Group. Delivery of the existing pipeline within that timeframe requires the improved liquidity and financial flexibility provided by the Fundraising alongside operational cashflow and the Revised Debt Facility.

2. Overview of SMS

SMS is a fully integrated energy infrastructure company which owns and manages meters, energy data, grid-scale batteries and other carbon reduction ("CaRe") assets to facilitate a smarter, greener and more resilient future energy system.

Building on more than 25 years of expertise in the UK's energy industry, its national engineering footprint, in-house technology and data platforms and decades of strong industrial partnership, SMS has developed an excellent understanding of the UK energy market and its transition to Net Zero. The Group's existing portfolio of meter and data assets generates long-term, index linked annualised recurring revenues, providing a solid foundation for future growth.

SMS currently has a contracted order pipeline of 2.75 million domestic smart meters and a grid-scale battery storage pipeline of 470MW, all of which is expected to be delivered over the next five years and to add £75 million to the Group's annual EBITDA once fully operational.

In addition to the existing pipeline, SMS has an additional EBITDA opportunity of £1.2 billion within its established CaRe products (smart meters, energy data and grid-scale batteries). Beyond these established products, SMS is also undertaking trials within the developing CaRe products ('behind-the-meter' solar and storage, ADMTM Australia, EV charging and Heat solutions) which SMS believes also presents a significant market opportunity.

The Group's fully integrated and established METIS technology platform underpins SMS's ability to efficiently scale its existing products and services and to take advantage of a rapidly-developing energy market.

Environmental, Social and Governance ("ESG") responsibilities are an integral element of SMS' business model. SMS is committed to improving its business impact and has an unwavering commitment to its people, customers and the communities in which it operates, highlighted most recently by its organisational Net Zero 2030 target.

SMS' business is based on four strategic pillars:

1. long-term, recurring cash generation from secure energy infrastructure assets;

2. customer excellence and efficiency delivery;

3. efficient capital allocation to provide headroom for growth; and

4. sustainable and socially responsible business.

A. Established CaRe Products

Meters

Smart meters are a key enabler of the UK's energy transition and are helping accelerate the adoption of distributed renewable energy generation by facilitating load shifting and smart time use of tariffs. Smart meters empower consumers to have real-time visibility and control over their energy usage while also enabling the grid to accommodate greater intermittent renewable generation by allowing utility providers to better manage power flows.

Smart meters also reduce energy suppliers' cost to serve ending estimated billing and permitting innovative energy services as well as generating energy savings for end consumers.

The UK Government has extended the rollout period for smart meters, both domestic and non-domestic, to 31 December 2025, as a result of the global COVID-19 pandemic. Alongside this extended timetable, the UK Government has implemented a new regulatory framework for the smart meter rollout, replacing the 'all reasonable steps' obligation with annual binding, supplier-specific installation targets from 2022 onwards. This strengthened regulatory framework underpins the importance of the smart meter rollout to the future of the UK energy system and requires 85% of all meters to be converted to smart meters by the end of 2025.

With an estimated 46 per cent. of all meters in the UK now having been exchanged for smart meters, SMS estimates that there remain over 30 million traditional meters in the UK to be exchanged, 2.6 million of which are in the non-contracted core independent energy market segment and present opportunities for SMS.

As an accredited meter asset provider ("MAP"), meter operator ("MOP") and meter asset manager ("MAM"), SMS installs and maintains electricity and gas meters on behalf of its energy supplier customers. The Group owns the necessary technology platforms in-house and offers a turnkey service to its energy supplier customers encompassing all aspects of the meter life across installation, maintenance and ownership for all parts of the domestic and I&C market. This end-to-end service offering, allied to its established engineering, technology and finance functions, provides SMS with a highly competitive position.

The Group currently owns and manages c.4 million meter and data assets, including 1.5 million smart meters, generating ILARR of £84.2 million as at 30 June 2021, categorised as follows:

Long-term ILARR from its existing smart meter and data assets (i.e. adjusting for ILARR from traditional meters which it is assumed will be replaced by the end of the roll out) was £67.9 million as at 30 June 2021.

SMS also continues to make progress in expanding its contracted smart meter order pipeline with new and existing customers. The Group has a current contracted smart meter order pipeline of c.2.75 million meters which, at an assumed fully installed cost of £185 per meter, requires capital expenditure of approximately £510 million over the next five years. Delivery of this pipeline, at yields of c.11 per cent., is expected to add c.£55 million to long-term ILARR.

SMS' meter assets generate long-term, predictable and RPI linked cash flows. These assets also have the following attractive characteristics:

− Meter contracts have minimal counterparty risk supported by the OFGEM Supplier of Last Resort mechanisms (through which Ofgem will appoint a new energy supplier to the consumer meter point, should an energy supplier enter administration).

− Meter contracts are largely perpetual in nature, with SMS billing the supplier for as long as the meter is on the wall.

− In most cases SMS receives termination payments from contracted energy suppliers in the event the asset is removed prior to end of life.

− Meters have 10 years' warranty (including labour) in the event of a single meter failure and 15 years' warranty (including labour) for a batch failure.

− Meter rentals are availability based, in that SMS continues to receive a fixed rental fee (usually index linked) from the energy supplier if a smart meter is on the wall and available for use, and SMS is therefore not exposed to energy usage or power price fluctuations in the market.

Energy Data

In order to allow the industry to actively balance grid supply with actual energy usage (rather than an assumed energy profile), the Department for Business, Energy & Industrial Strategy ("BEIS") has recently confirmed its intention to mandate market-wide half hourly ("HH") settlement from 2025.

The Group's data services to UK energy suppliers, particularly focused on the I&C market, now account for £14.3 million of the Group's total ILARR, including £2.0 million data service contracts added as part of the I&C HH meter portfolio acquisition completed in April 2021.

This significant change to HH settlement is expected to increase the market for these industry accredited services from c.300,000 I&C electricity metering points (of which SMS has a c.10 per cent. market share) to 26 million meters by 2026. With estimated ILARR of £6 per meter, SMS estimates that the addressable market represents an additional c.£180 million ILARR opportunity, which is expected to translate to a c.£90 million EBITDA opportunity, with no capex deployment, as the Group is able to leverage its in-house, scalable technology platform through which it already provides these data services to the existing HH I&C market.

Grid-Scale Battery Storage

Grid-scale battery storage technology enables power system operators and utilities to collect energy from the grid and discharge later. The technology is a critical part of the changing electricity network and the infrastructure required to support the energy transition. It will become an alternative to baseload electricity generation and enable greater flexibility to connect increasing sources of intermittent renewable electricity generation by managing the supply across peaks and troughs of demand.

The proliferation of intermittent renewable energy generation sources is widely forecast to increase the volatility seen in the network and SMS believes that battery storage solutions will be a key facilitator in enabling the network to smooth this volatility.

The National Grid forecasts a requirement for over 30GW of energy storage in the UK by 2050 to enable the continued integration of intermittent renewable energy generation on the grid. SMS has identified a current addressable market opportunity for grid-scale batteries of over 10GW by 2030 and 25GW by 2050.

SMS has the end-to-end capability to originate, own and manage battery projects through its well-established energy services arm which, for the last 25 years, has been designing and delivering some large electrical infrastructure projects in the UK and helping customers to reduce their carbon footprint and achieve greater control over their energy purchasing and consumption. This embedded, in-house expertise provides SMS with a key competitive advantage and will help deliver the future strategy of the business by building on its existing infrastructure and core competencies.

The acquisition of Solo Energy in 2019 fast-tracked the development of an aggregation platform internally which enables the charging and discharging of batteries and other assets, aggregating those assets and responding to market requirements. Integrated with the SMS METIS asset management system and third-party trading systems, SMS can manage asset performance across its battery assets.

SMS has secured an initial pipeline of grid-scale battery projects of 470MW, of which 240MW is currently either under construction or in the pre-construction phase and a further 230MW under exclusivity. The Group is also in active discussions with site owners across the UK to build its footprint further in this developing asset class.

This initial pipeline of projects, at an anticipated cost of c.£380,000 per MW, requires capital expenditure of approximately £180 million over the next five years. 

The opportunities to generate revenue from grid-scale batteries are highly visible, driven by the daily requirement for balancing services on the grid in tandem with growth in intermittent renewable generation, which is substantially increasing the need for such services. Delivery of this pipeline with starting yields between 11 and 14 per cent., is expected to add a minimum c.£20 million of EBITDA using the lowest 11 per cent. yield expectation. SMS considers there to be further upside potential to these forecasts through the use of grid-scale batteries to provide additional frequency and local flexibility services to the grid and this is reflected in the revenues being generated by over the 1GW of energy storage already deployed in the UK. The counterparties are the system operators - National Grid, the DNO's and the energy market, providing strong revenue protection.

The grid-scale battery market is evolving at a rapid pace and there is an increased understanding of the life cycle of the assets and security of the revenue streams. SMS believes that this asset class has a base electrical infrastructure with an expected life in excess of 40 years (with this network infrastructure being very similar to a local regulated electricity distribution network), with battery cell replacement occurring approximately every 10 years which is aligned to the Group's warranty protections. Accordingly, SMS is confident that the economic profile of these assets provides attractive, long-term returns in a similar way to the existing meter asset class.

By successfully originating and developing this initial pipeline of projects, SMS has demonstrated its ability to apply its existing knowledge and infrastructure beyond metering and to provide the end-to-end origination, optimisation and management of these critical services to the energy system. This has firmly established grid-scale batteries as the next most mature opportunity within the range of CaRe verticals being targeted by the Group.

B. Developing CaRe Assets

The same drivers which support the continued investment in smart meters and grid-scale batteries also result in the need to control demand from the EV charging infrastructure, the electrification of heat and other demand side energy efficiency assets, all to respond to real-time signals from the energy networks.

SMS is ideally positioned to capitalise on this requirement and to take advantage of new market opportunities as they develop. Whilst these developing asset classes are at various stages of maturity, SMS has established trials and pilots in each and is currently developing commercial models, which will be integrated with the Group's Flexigrid and METIS asset management platforms.

All of these products are closely aligned to SMS's existing vertically integrated technology and engineering platform and are complementary to each other. SMS is developing asset classes and positioning the business in areas in which it already has substantial experience and capability. These markets also all share two characteristics - they reduce carbon, and each in their own right provide a substantial growth market opportunity.

C. ESG

ESG is at the core of the SMS business as it seeks to realise its purpose, "to serve our customers and protect our environment". The Group is dedicated to helping its customers reduce their carbon emissions and is actively working towards achieving net zero targets in the SMS business by 2030. SMS's CaRe products and services are critical to achieving a cleaner and resilient future energy system.

The Group has continued to make strong progress in each aspect.

Environmental

In 2020, SMS announced its ambitious plan to be net zero (Scope 1 and 2) by 2030, and carbon negative beyond. The Group also provided a roadmap to achieving those targets and published its inaugural ESG report, its flagship ESG disclosure outlining ESG plans, objectives and progress.

The Group recently provided an update on progress made in 2021:

· In the first half of 2021, the Group's Scope 1 and Scope 2 emissions fell by 31% when compared with the first half of 2019. Although during the period emissions rose 17% compared to H1 2020, SMS believes that this comparison is distorted by the impact of Covid-19.

· Carbon emissions avoided through the use of SMS' products and services increased 74% in H1 2021, compared to H1 2020, resulting in an 11x positive impact versus the Group's carbon footprint (H1 2020 & H1 2019: 8x).

· SMS's vehicle fleet represented 88% of the Group's total carbon emissions in H1 2021 with the remaining 12 per cent. originating from buildings. Significant progress has been made on the Group's vehicle fleet, with more than 90 per cent. now transitioned to plug-in hybrids and a programme to replace the van fleet to plug-in hybrid commenced. In addition, office upgrades have commenced and are focused on renewable power and energy efficiency, including air source heat pumps for water heating and solar PV for renewable electricity.

Social

SMS continues to build on its established social and community initiatives, whilst launching a series of new initiatives during H1 2021.

· SMS is now a signatory of the Business in the Community Race at Work Charter.

· The Group has become a Level 3 Disability Confident Leader, the highest level possible.

· SMS also launched several initiatives to support local communities and biodiversity efforts whilst constructing grid-scale battery projects.

The health and safety of the Group's employees, customers and partners is of utmost importance to SMS. The Group has invested in safety, health, environmental and quality measures in recent years which is making a demonstrable contribution to the business, with results including:

· YTD zero reportable injuries and the Accident Frequency Rate (AFR) per 100,000 hours worked is 0.05 which is close to the target of 0.04.

· Lost Time Injury Frequency Rate (LTIFR) per 100,000 hours worked is 0.14 which is ahead of target 0.15.

Governance

The Group has continued to place the appropriate resources, targets and monitoring to fulfil its obligations to shareholders, employees, customers and wider society. It has established a dedicated board subcommittee for Health, Safety, & Sustainability headed by Chairman, Miriam Greenwood, ensuring that ESG is embedded into every level of decision making. The Group's commitment to strong corporate governance was reflected in SMS receiving the highest scoring range from MSCI when compared with its global peers in 2020.

Ratings and certifications

SMS has been recognised with the London Stock Exchange's Green Economy Mark (the "Mark") every year since it was introduced in 2019. The Mark identifies London-listed companies and funds that generate more than 50% of total annual revenues from products and services that contribute to the global environmental objectives, such as climate change mitigation and adaptations, waste and pollution reduction, and the circular economy.

The Group also continued its engagement with the existing and new ESG rating agencies and made positive progress in overall scoring. MSCI's weighted average performance improved from 6.3 to 6.6 (on scale of 10) and Sustainalytics risks rating reduced from 27.8 to 26.6 (on scale of 0-50).

3. Current Trading and Prospects

A. Current Trading

Today, SMS announced its interim results for the six months to 30 June 2021. A summary of those results is provided below.

The Group's performance remained strong through the first half of the year, delivering growth over the prior period, with underlying profit before taxation increasing by 5% to £9.6m despite ongoing disruption from COVID-19 in the early parts of the year and the flow through effect of the 2020 I&C meter portfolio disposal. This performance further demonstrates the resilience of SMS' business, the robust nature of the metering infrastructure asset class and the largely index-linked sustainable cash flows it generates.

The monthly smart meter installation run-rate has recovered since the beginning of 2021 and is currently operating at c.20% higher than the pre-COVID-19 run rate. The Group installed an average of over 30,000 smart meters per month during the June to August period, whilst continuing to focus successfully on the safety and efficiency of its operational delivery.

In the light of recent trading, and assuming no further pandemic related restrictions, the Board expects FY2021 underlying PBT to be marginally ahead of its previous expectations.

B. Debt Refinancing

The Group has secured the Revised Debt Facility with six lenders for a total of £420 million, an increase of £120 million on the Existing Debt Facility. The new group of lenders comprises Barclays Bank, HSBC, RBS, Lloyds Banking Group, Clydesdale Bank and Bank of Ireland.

The Revised Debt Facility, which extends the maturity date of the Group's current facilities from December 2023 to December 2025, can be utilised to fund both smart meters and battery assets and has been secured on similarly attractive terms and on similar pricing to the Existing Debt Facility. This revised structure provides SMS with greater operational and financial flexibility as it delivers its significant pipelines of smart meter orders and grid-scale battery projects.

C. Dividend Policy

Following a sale of a minority of the Group's meter assets in 2020, SMS announced an enhanced dividend policy of 25 pence per Ordinary Share in respect of FY2020 (representing an increase of 3.6x over FY2019) and committed to a policy aim of an annual 10% increase for each of the financial years until the end of 2024.

Accordingly, SMS intends to pay a dividend of a 27.5p per Ordinary Share in respect of FY2021, in line with its stated policy, such amount to be paid in four equal quarterly instalments starting in October 2021.

The provisional dividend timetable for FY2021 is as follows:

Accordingly, the New Ordinary Shares will not be eligible for the October 2021 dividend payment but will be for future payments.

The Board remains comfortable that future dividend payment amounts are sufficiently covered by income from the Group's existing metering and data asset base and their long-term index-linked cash flows.

The Board expects that the deployment of the £690 million of capital expenditure required to deliver the Group's current pipeline will result in a material increase in the Group's earnings and cash generation per share over the medium-term, notwithstanding the dilutive impact of the Fundraising, and will support future long-term dividend payments.

4. Details of the Placing

The Placing is being conducted through the Bookbuild which is managed by the Joint Bookrunners.

The Bookbuild will open with immediate effect following release of this Announcement. The number of Placing Shares to be issued in the Placing, and the price at which such Placing Shares are to be issued in the Placing (the "Issue Price"), will be agreed by the Joint Bookrunners and the Group at the close of the Bookbuild. The timing of the closing of the Bookbuild, pricing and allocations are at the discretion of the Joint Bookrunners and the Group. Details of the Issue Price and the number of New Ordinary Shares to be issued will be announced as soon as practicable after the close of the Bookbuild.

The Placing is subject to the terms and conditions set out in Appendix 2 to this announcement (which forms part of this announcement, such announcement and the Appendix together, the "Announcement").

In conjunction with the Placing, certain directors of the Company intend to subscribe for new Ordinary Shares alongside the Placing (the "Subscription Shares" and, together with the Placing Shares, the "New Ordinary Shares"), contributing approximately £84,000 in aggregate (the "Subscription"). The Subscription Shares will be subscribed for on the basis agreed pursuant to subscription letters with the Company, rather than the terms and conditions of the Placing set out in Appendix 2 to this Announcement.

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 become effective and that dealings in the New Ordinary Shares will commence on AIM at 8.00am on 4 October 2021.

The New Ordinary Shares, when issued, will be issued and credited as fully paid and will rank in full for all dividends and other distributions declared, made or paid after the admission of those Ordinary Shares and will otherwise rank on Admission pari passu in all respects with each other and with the Existing Ordinary Shares.

The Group's total costs and expenses associated with the Placing are estimated to be £4.8 million.

The Placing is conditional upon, amongst other things:

· the Joint Bookrunners and the Group agreeing the Issue Price and the number of Placing Shares at the close of the Bookbuild;

· the passing of the Resolutions without amendment to be proposed at the General Meeting;

· the Placing Agreement having become unconditional (save for Admission) and not having been terminated in accordance with its terms prior to Admission;

· Admission taking place by no later than 8.00 a.m. on 4 October 2021 or such later date (being not later than 3.00 p.m. on 18 October 2021) as the Joint Bookrunners may agree in writing with the Group.

If any of the conditions are not satisfied, the New Ordinary Shares will not be issued and Admission will not take place.

Pursuant to the Placing Agreement, the Joint Bookrunners, as agents for the Company, have agreed to use their reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price. In addition, Investec and RBC have each severally (and not jointly and severally) agreed to underwrite, in equal proportions, the settlement risk in the event that any subscriber for Placing Shares procured by the Joint Bookrunners fails to take up their allocation of Placing Shares.

The Placing Agreement contains customary warranties given by the Company in favour of the Joint Bookrunners in relation to, inter alia, the accuracy of the information in this Announcement and other matters relating to the Group and its business. In addition, the Company has agreed to indemnify the Joint Bookrunners in relation to certain liabilities which the Joint Bookrunners may incur in respect of the Placing.

Under the Placing Agreement, the Company has agreed to pay to the Joint Bookrunners a commission based on the aggregate value of the Placing Shares placed at the Issue Price.

Each Joint Bookrunner has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular, in the event of a breach of any of the warranties or a material adverse change.

The Placing Agreement also provides for the Company to pay all costs, charges and expenses of, or incidental to, the Placing and Admission including all legal and other professional fees and expenses.

The Placing Shares have not been made available to the public and have not been offered or sold in any jurisdiction where it would be unlawful to do so.

This Announcement should be read in its entirety. In particular, your attention is drawn to the "Important Notices" section of this Announcement, to the risk factors described in Appendix 1 to this Announcement (which forms part of this Announcement) and to the detailed terms and conditions of the Placing and further information relating to the Bookbuild described in Appendix 2 to this Announcement (which also forms part of this Announcement).

5. Expected Timetable

For further information:

Notes to Editors

Smart Metering Systems plc (www.sms-plc.com) is the fully integrated energy infrastructure company owning and managing meter assets, energy data, grid-scale batteries and other carbon reduction (CaRe) assets. The Group manages and optimises these assets through its in-house technology and data analytical platform "METIS".

Established in 1995, SMS provides a full end-to-end service, from funding and installation to management and maintenance, with a highly skilled workforce, deep engineering expertise and well-established industrial partnerships.

SMS is leading the low carbon, smart energy revolution in the UK and is committed to reducing its own carbon emissions to net zero by 2030. In 2019, SMS was also awarded the London Stock Exchange Green Economy Mark.

SMS plc is headquartered in Glasgow with a national presence across twelve UK locations.

SMS shares are listed on AIM.

IMPORTANT NOTICES

THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION CONTAINED IN THEM, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE, FORWARDING OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (COLLECTIVELY, THE "UNITED STATES") (OTHER THAN PURSUANT TO CERTAIN EXEMPTIONS), AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION. THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO APPROVED.

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, Canada, Australia, South Africa, Japan or any other jurisdiction in which the same would be unlawful. No public offering of the Placing Shares is being made in any such jurisdiction.

No action has been taken by the Company, Cenkos Securities plc ("Cenkos"), Investec Bank plc ("Investec"), RBC Europe Limited ("RBC" and, together with Cenkos and Investec, the "Bookrunners") or any of their respective affiliates, or any person acting on its or their behalf that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and the Joint Bookrunners to inform themselves about, and to observe, such restrictions.

No prospectus, offering memorandum, offering document or admission document has been or will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with Regulation (EU) No 2017/1129 (as amended) (the "Prospectus Regulation") or the UK version of the Prospectus Regulation as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 (the "UK Prospectus Regulation")) to be published.

The Placing Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any State or other jurisdiction of the United States, and may not be offered, sold, or transferred, directly or indirectly, in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any State or any other jurisdiction of the United States. Accordingly, the Placing Shares will be offered and sold only (i) outside of the United States in "offshore transactions" (as such term is defined in Regulation S under the Securities Act ("Regulation S")) pursuant to Regulation S and otherwise in accordance with applicable laws; and (ii) in the United States to persons who are "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) ("QIBs") and who have delivered to the Company and the Joint Bookrunners a US Investor Letter substantially in the form provided to it, in each case, pursuant to an exemption from, or in a transaction not subject to, registration under the Securities Act. No public offering of the Securities will be made in the United States or elsewhere.

The Placing has not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing, or the accuracy or adequacy of this presentation. Any representation to the contrary is a criminal offence in the United States.

This Announcement has not been approved by the Financial Conduct Authority (the "FCA") or the London Stock Exchange.

In member states of the European Economic Area (the "EEA"), this Announcement is directed at and is only being distributed to "qualified investors" within the meaning of Article 2(e) of the Prospectus Regulation ("Qualified Investors"). In the United Kingdom, this Announcement is directed at and is only being distributed to "qualified investors" within the meaning of Article 2(e) of the UK Prospectus Regulation who are also (i) persons having professional experience in matters relating to investments who fall within the definition of "investment professional" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); or (ii) high net worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2)(a) to (d) of the Order; or (iii) other persons to whom it may otherwise lawfully be communicated (all such persons together being "Relevant Persons"). Any investment or investment activity to which this Announcement relates is available only to (i) in any member state of the EEA, Qualified Investors; and (ii) in the United Kingdom, Relevant Persons, and will be engaged in only with such persons. This Announcement must not be acted on or relied on (i) in any member state of the EEA, by persons who are not Qualified Investors; and (ii) in the United Kingdom, by persons who are not Relevant Persons.

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 South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offering in compliance with the securities laws of any state, province or territory of Australia, Canada, South Africa or Japan. Accordingly, the Placing 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, South Africa, or Japan or any other jurisdiction in which such activities would be unlawful.

By participating in the Bookbuild and the Placing, each person who is invited to and who chooses to participate in the Placing (each a "Placee") by making an oral or written and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained in Appendix 2 to this Announcement and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in Appendix 2 to this Announcement.

Certain statements contained in this Announcement constitute "forward-looking statements" with respect to the financial condition, results of operations and businesses and plans of the Company and its subsidiaries (the "Group"). Words such as "believes", "anticipates", "estimates", "expects", "intends", "plans", "aims", "potential", "will", "would", "could", "considered", "likely", "estimate" and variations of these words and similar future or conditional expressions, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon future circumstances that have not occurred. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. As a result, the Group's actual financial condition, results of operations and business and plans may differ materially from the plans, goals and expectations expressed or implied by these forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of, and no reliance should be placed on, such forward-looking statements. No statement in this Announcement is intended to be, nor may it be construed as, a profit forecast or be relied upon as a guide to future performance. The forward-looking statements contained in this Announcement speak only as of the date of this Announcement. The Company, its directors, the Joint Bookrunners, their respective affiliates and any person acting on its or their behalf each expressly disclaim any obligation or undertaking to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by applicable law or regulation, the FCA or the London Stock Exchange.

Cenkos Securities plc is authorised and regulated in the United Kingdom by the FCA. Each of Investec Bank plc and RBC Europe Limited are authorised by the Prudential Regulation Authority ("PRA") in the United Kingdom and regulated in the United Kingdom by the PRA and FCA. Investec Europe Limited (trading as Investec Europe) ("Investec Europe"), acting as agent on behalf of Investec Bank in certain jurisdictions in the EEA (together Investec Bank and Investec Europe hereinafter referred to as "Investec"), is regulated in Ireland by the Central Bank of Ireland. Each Bookrunner is acting exclusively for the Company and no one else in connection with the Placing, the contents of this Announcement and other matters described in this Announcement. No Bookrunner will regard any other person as its client in relation to the Placing, the content of this Announcement and other matters described in this Announcement and will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to their respective clients or for providing advice to any other person in relation to the Placing, the content of this Announcement or any other matters referred to in this Announcement.

This Announcement has been issued by and is the sole responsibility of the Company. 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 any Bookrunner or by any of its affiliates or any person acting on their behalf 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 therefore is expressly disclaimed.

This Announcement does not constitute a recommendation concerning any investor's investment decision with respect to the Placing. Any indication in this Announcement of the price at which ordinary shares have been bought or sold in the past cannot be relied upon as a guide to future performance. 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. The contents of this Announcement are not to be construed as legal, business, financial or tax advice. Each investor or prospective investor should consult his, her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

Any indication in this Announcement of the price at which the Company's shares have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this Announcement is intended to be a profit forecast or profit estimate for any period and no statement in this Announcement should be interpreted to mean that earnings, earnings per share or income, cash flow from operations or free cash flow for the Company for the current or future financial periods would necessarily match or exceed the historical published earnings, earnings per share or income, cash flow from operations or free cash flow for the Company.

All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Regulation or the UK Prospectus Regulation from the requirement to produce a prospectus. This Announcement is being distributed and communicated to persons in the UK only in circumstances to which section 21(1) of the Financial Services and Markets Act 2000, as amended does not apply.

The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange.

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

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this Announcement.

This Announcement has been prepared for the purposes of complying with applicable law and regulation in the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside the United Kingdom.

UK Product Governance Requirements

Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such Placing 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 the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all permitted distribution channels (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, "distributors" (for the purposes of the UK Product Governance Requirements) should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing 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, the Joint Bookrunners 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 Chapters 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; 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 the Placing Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

APPENDIX 1

PRINCIPAL RISK FACTORS

SMS has a robust risk management approach which continues to evolve in keeping with its growing business and the developing macroeconomic environment.

The Board has overall responsibility for risk management. In support of this, the Group operates robust risk management processes, which are embedded within everyday business activities throughout the Group.

The Group's risk management framework highlights the main responsibilities for the management and oversight of risk within the Group and is set out in the 2020 Annual Report & Accounts (available at www.sms-plc.com/corporate/investors) alongside a detailed assessment of the following principal risks and uncertainties which the Board believes could have a material impact on the Group and the mitigating actions that have been taken by the Group.

a. Potential breach of cyber security

Critical information technology systems could be subject to a major external or internal cyber-attack, causing a breach of information security regulations and/or service disruption. The potential impact includes financial penalties, financial loss, unauthorised access to systems and data alongside service disruption and loss of customer and/or supplier confidence. SMS achieved ISO 27001 accreditation in October 2020 and has several mitigating controls in place, including (but not limited to) a formal cyber security policy, mandatory security awareness training for all staff and physical controls in place including firewalls and encryption.

b. Major health and safety incident

SMS employs over 1,000 people and an incident could occur, leading to significant injury, illness or loss of life to an employee or third party. Any such incident carries both financial and reputational risk. However, SMS's number one core value is safety and the Group's commitment to health and safety underpins all business practices, ensuring that employees and customers are protected. ISO 45001 accreditation was achieved for Glasgow and Cardiff-based businesses in June 2020. The Board has overall accountability for compliance with health and safety standards and is provided with regular management reporting.

c. Speed of organisational change (near term)

There is a risk that the speed of organisational growth in the short term could happen without sufficient and appropriate growth in infrastructure. This may result in insufficient engineering capacity or resources being available, limitations on organisational back-office and support functions, metering supply and warehousing operations being unable to meet demand and IT infrastructure that does not scale up quickly enough to meet business needs. To mitigate this risk, SMS has robust forecasting processes which are closely aligned to commercial and operational management teams, well-established supplier onboarding processes, strategic and targeted recruitment activity for engineers and subcontractor call-off arrangements in place across the UK. In 2020, SMS introduced a new capacity planning system to support the Group's engineering workforce which is aligned to the IT strategy that reflects an organisational strategy for growth.

d. Business continuity and disaster recovery

Failure of core and/or critical IT systems could result in operational interruption. The temporary loss of IT infrastructure/critical business systems and processes or the loss or corruption of data is a risk for SMS as this could have a detrimental impact on customer service and a potential loss of revenue through inability to meet customer orders or issue invoices. SMS monitors industry data flows and escalates issues should they arise. There is a Group business continuity plan and disaster recovery plans are in place for critical IT systems. There is failover facility available for immediate redeployment of staff, enabling key operations to be serviced. Alternative UK sites are available to manage core business operations and most of the workforce is able to work from home to support the Group's customers.

e. Critical supplier dependency

The Group relies on a limited number of meters and grid-scale batteries component suppliers and the failure of one such counterparty could have significant operational and financial implications. SMS has business continuity arrangements in place and has diversified its supplier base.

Additionally, the Group has a centralised legal function that protects commercial interests through robust contracting process alongside enhanced stock control processes mitigating the risk of being unable to fulfil customer orders in the event of failure of a critical supplier.

f. Funding and working capital management

Suitable funding arrangements are critical to enable the continued growth of the Groups asset portfolio. Poor management of core elements of working capital, particularly during peak activity periods, could lead to an inability to meet creditor requirements and cause a negative financial impact. Defaulting on debt obligations could see credit facilities withdrawn. It may also impact the ability to meet existing customer or trade commitments, increased supply chain costs and a lack of funding may hamper emerging business opportunities. The Group has a credit control facility and robust commercial billing arrangements in place alongside regular and formal review of key management information in relation to cash and debt positions. The Group also has various funding strategies available to it, and these remain under active review.

g. Brexit

The effect of the UK's withdrawal from the European Union (EU) on 31 December 2020 is already being seen in talent shortages across a range of sectors and specialisms and in supply chain disruption for certain goods and parts. Any impact on the availability of engineering and information technology staff, in particular, may have a significant impact on the Group and result in the requirement for additional investment in training of new staff or increased labour costs. In addition, the Group would be adversely impacted by interruptions or delays to the supply chain for goods sourced from within the EU, delays to customer orders or potential increased supplier costs.

The Group continues to monitor and assess the position. It has performed a partner review with critical suppliers who source supplies from outside the UK to ensure there are robust continuity arrangements in place and has sufficient coverage in the supply chain and inventory arrangements to withstand significant delays and to honour outstanding customer commitments.

h. Loss of ESG-related and regulatory accreditations

Loss of accreditations or failure to comply with key regulatory requirements could lead to an inability to deliver core services, a loss of revenue or a reduction in available banking facilities. The potential impact is wide-ranging, including an inability to conduct business, financial penalties, reputational damage, loss of trained and qualified engineers and external investigation(s) and/or audits. As outlined above, the Board has overall accountability for compliance with safety, health and environmental standards and is provided with regular management reporting. The Group has a well-established technical assurance team in place, including an experienced compliance function with deep industry insight and expertise. There is a dedicated training academy for field service engineers and a rolling training plan in place for all engineering staff to maintain and upgrade certifications. This is combined with extensive assurance activity performed across the Group, regular external independent and routine audits performed by regulators and effective HR onboarding process for new staff.

i. Potential breach of GDPR

There could be a breach of GDPR through an internal failure to follow protocol and policy or as a result of data integrity and retention issues. The potential impact includes financial penalties under GDPR, external investigation(s) by the Information Commissioner's Office and a loss of customer and/or supplier confidence. The Group's General Counsel is an expert in data protection and is the appointed Data Protection Officer ("DPO"). The DPO monitors internal GDPR compliance and, through a series of internal and external communication platforms, informs and advises staff and third parties of our obligations and expectations under GDPR. There is annual GDPR training for all SMS staff, IT security monitoring controls, including a Security Operation Centre and Netskope monitoring of external communications.

j. COVID-19

The ongoing development of COVID-19 globally remains a potentially significant risk to the business. The Group's top priority is the health and welfare of its people, customers and the end consumer. The risks are continually changing and evolving and include business continuity issues, restrictions for non-essential travel, potential detrimental impact on the supply chain and that counterparties could default on contractual obligations.

The Group continues to actively manage and mitigate the risks. Most of the SMS workforce is able to continue to work and support the Group's customers from home. Engineer pre-visit risk assessments are carried out, Personal Protection Equipment, regular cleaning and temperature control checks across sites combined with regular communications to employees and customers have helped mitigate the risks. The recurring revenue streams on the Group's existing meter and data asset base have provided a resilient business operating model able to withstand short-term economic shock.

k. People at SMS

An inability to attract, retain and motivate the right people could have a material adverse effect on the SMS business and ultimately lead to a failure to deliver on its strategic objectives. The impact includes high levels of employee turnover, loss of employees with specialist skillsets to competitors, low employee morale, failure to take advantage of emerging business opportunities and a lack of business continuity.

In addition, the Group's senior management team is responsible for implementing the strategic objectives of the Group and the retention and success of this highly experienced team is material to the business, development and prospects of SMS. The loss of the services of one or more of such key personnel without the ability to attract new key management personnel of similar calibre may therefore have an adverse impact on the Group.

The Group has in place several strategies to mitigate these risks. The Group has robust recruitment, due diligence and onboarding processes, succession planning for key leadership and business roles, talent and performance management frameworks linked to values and behaviours and harmonised terms of employment, ensuring fairness and consistency across the Group. The Group seeks to provide competitive rewards and employee benefits packages and benchmarks roles with the external market in terms of remuneration and reward. The Group has an equal opportunities, diversity and inclusion policy and reports on the gender pay gap. In addition, supportive one-to-one meetings between people leaders and their direct reports are combined with regular employee satisfaction surveys, including review of results by management and the implementation of actions to address themes.

Strategic Risks

As outlined above, management's efforts and the Group's financial resources are being principally employed in delivering the current smart meter and grid-scale batteries pipelines.

The Group's execution of its strategy is dependent on its continued ability to successfully translate its objectives into deliverable actions to create a sustainable business model. To ensure that the Group is best placed to achieve this, SMS regularly communicates the purpose, mission and values to all employees and these are integral to employee performance management processes.

The Board has identified the following considerations to be the most material risks to the successful execution of the Group's strategy. It should be noted that this is not intended to be an exhaustive list of those factors which may impact the Group or its operational or financial performance.

a. The Group's execution of the smart meter order pipeline is dependent on a number of factors

The rollout of domestic smart meters in the UK by energy suppliers is supported by both commercial and regulatory drivers, including the introduction of annual binding, supplier-specific installation targets from 2022 onwards. However, successful execution of the Group's current pipeline of c.2.75 million meters is dependent on SMS' operational delivery and a number of external factors. These external factors include the Group's energy supplier customers: (i) converting their portfolios to smart meters, (ii) ensuring their end-customers agree to have their existing meters replaced for smart meters, and (iii) providing sufficient meter exchange opportunities to fulfil their contracted commitments within the pipeline. Finally, there is a risk that energy suppliers included in the pipeline enter administration.

b. The Group's grid-scale battery projects are in the early stages of commercialisation

Whilst the smart meter market is now well-developed and is an area in which the Group has both a market-leading position and demonstrable track-record of delivery, the successful commercialisation of the grid-scale battery pipeline is at an early stage and forecast returns will be dependent on capital expenditure costs, availability of raw materials, project timings and future revenues.

The Group has considerable experience in forecasting and managing project implementation timetables and its forecasts for the revenues attributable to, and the long-term growth in demand for, grid-scale battery projects are supported by independent industry modelling.

However, the Group may still experience unforeseen delays and expenses in connection with a particular project or initiative and, whilst its assumptions are considered to be a conservative baseline to allow for an element of cost overrun or revenue compression, any additional costs in the event of unforeseen delays, unanticipated expenses, regulatory changes, increases in the price of equipment or reduction in the revenues attributable to these assets may negatively affect the Group's business, financial condition and results of operations.

c. The Group may experience accelerated demand for its products and services

The Group expects to be able to meet the forecast £690 million capital expenditure requirements for the delivery of its pipeline of 2.75 million smart meters and 470MW of grid-scale battery projects from its internal cash resources, Revised Debt Facility and the net proceeds of the Fundraising. However, in the event that the Group wins further orders for smart meters beyond the current smart meter order book and/or secures new battery projects beyond the current pipeline, then the Group may require additional funding or to increase its leverage above the stated target of three times Net Debt: EBITDA. If the Group is unable is unable to raise the necessary financing, it could adversely affect the Group's ability to expand its business.

d. The Group may require to revisit its growth plans or secure alternative funding if the Fundraising does not proceed

In the event the Fundraising does not proceed, the Group will require to consider the appropriateness of its current growth plan and the timetable for delivery of its current pipeline of smart meter orders and grid scale battery projects in the context of the financial resources available to it. The Group may also look to source financing for its future pipeline through alternative sources, the nature of which may impact on the Group's capital structure and future earnings or its ability to maintain its current dividend policy.

e. The Group's competitors may take actions which adversely affect its revenues, profits or financial condition

The Board is cognisant that the Group operates within competitive markets and believes that it has adopted a competitive business strategy. The Directors believe that this strategy ensures the Group maintains its competitive position in the markets in which it operates. However, the Group's business, results, operations and financial condition could be materially adversely affected by the actions of its competitors (including their marketing strategies and product and services development).

There is increasing competition for "green assets". The Group's competitors could have greater financial resources or experience in particular sectors or markets where the Company intends to offer services. If the Group is not able to compete successfully against existing or future competitors, its competitive position, business, financial condition and results of operations may be adversely affected.

f. Changes in the political, legal, economic or regulatory environment

Adverse developments in the political, legal, economic and regulatory environment may materially and adversely affect the financial position and business prospects of the Group. Political and economic uncertainties include, but are not limited to expropriation, nationalisation, changes in interest rates, RPI, and changes in taxation and changes in law. Whilst the Group strives to continue to take effective measures such as prudent financial management and efficient operating procedures, there is no assurance that adverse political, economic, legal or regulatory factors will not materially and adversely affect the Group. There may be a change in the regulatory environment which may materially adversely affect the Company's ability to implement successfully the strategy set out in this Announcement. In particular, OFGEM has the power to influence competition, prices, and standards across the industry. There is the potential for further delays in UK smart meter rollout or a government shift in policy regarding smart meters that would impact the Group.

APPENDIX 2

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THE "ANNOUNCEMENT") IS RESTRICTED, AND EXCEPT AS SET FORTH BELOW IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (A) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(E) OF REGULATION (EU) 2017/1129 (THE "PROSPECTUS REGULATION") ("QUALIFIED INVESTORS"); OR (B) IF IN THE UNITED KINGDOM, PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(E) OF THE UK VERSION OF THE PROSPECTUS REGULATION AS IT FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "UK PROSPECTUS REGULATION") WHO ARE (I) PERSONS WHO FALL WITHIN THE DEFINITION OF "INVESTMENT PROFESSIONAL" IN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"), OR (II) PERSONS WHO FALL WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (C) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS REFERRED TO IN (A), (B) AND (C) ABOVE TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT 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 SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN THE PLACING SHARES.

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, ACQUIRED, RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY WITHIN, INTO OR IN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY RELEVANT STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE PLACING SHARES WILL BE OFFERED AND SOLD ONLY (I) OUTSIDE OF THE UNITED STATES IN "OFFSHORE TRANSACTIONS" (AS SUCH TERM IS DEFINED IN REGULATION S UNDER THE SECURITIES ACT ("REGULATION S")) PURSUANT TO REGULATION S AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS; AND (II) IN THE UNITED STATES TO PERSONS WHO ARE "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) ("QIBS") AND WHO HAVE DELIVERED TO THE COMPANY AND THE JOINT BOOKRUNNERS A US INVESTOR LETTER SUBSTANTIALLY IN THE FORM PROVIDED TO IT, IN EACH CASE, PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFER OF THE PLACING SHARES IN THE UNITED STATES, THE UNITED KINGDOM, ANY OTHER RESTRCITED JURISDICTION (AS DEFINED BELOW) OR ELSEWHERE.

This Announcement is for information only and does not itself constitute or form part of an offer to sell or issue or the solicitation of an offer to buy or subscribe for securities referred to herein in any jurisdiction including, without limitation, the United States or any other Restricted Jurisdiction (as defined below) or any jurisdiction where such offer or solicitation is unlawful.

This Announcement, and the information contained herein, is not for release, publication or distribution, directly or indirectly, to persons in the United States, Australia, Canada, Japan or the Republic of South Africa (each a "Restricted Jurisdiction") or any jurisdiction in which such release, publication or distribution is unlawful. The distribution of this Announcement, the Placing and/or the offer or sale of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or by Cenkos Securities plc ("Cenkos"), Investec Bank plc ("Investec") or RBC Europe Limited ("RBC", and together with Cenkos and Investec, the "Joint Bookrunners" and each a "Joint Bookrunner") or any of their respective Affiliates or any of their respective agents, directors, officers or employees (collectively "Representatives") which would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons distributing any part of this Announcement must satisfy themselves that it is lawful to do so. Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any such action. Persons into whose possession this Announcement comes are required by the Company and the Joint Bookrunners to inform themselves about, and to observe, any such restrictions.

All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Regulation and UK Prospectus Regulation from the requirement to produce a prospectus. This Announcement is being distributed and communicated to persons in the UK only in circumstances to which section 21(1) of the Financial Services and Markets Act 2000, as amended ("FSMA") does not apply.

The Placing has not been approved and will not be approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is unlawful.

Subject to certain exceptions, the securities referred to in this Announcement may not be offered or sold in any Restricted Jurisdiction or to, or for the account or benefit of, a citizen or resident, or a corporation, partnership or other entity created or organised in or under the laws of a Restricted Jurisdiction.

This Announcement has been issued by, and is the sole responsibility of, the Company. 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 any Joint Bookrunner or any of its Affiliates or Representatives 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 party or its advisers, and any liability therefore is expressly disclaimed.

Each Joint Bookrunner is acting exclusively for the Company and no-one else in connection with the Placing and is not, and will not be, responsible to anyone (including the Placees) other than the Company for providing the protections afforded to its clients nor for providing advice in relation to the Placing and/or any other matter referred to in this Announcement.

None of the Company or the Joint Bookrunners or any of its or their respective Affiliates or Representatives makes any representation or warranty, express or implied to any Placees regarding any investment in the securities referred to in this Announcement under the laws applicable to such Placees. Each Placee should consult its own advisers as to the legal, tax, business, financial and related aspects of an investment in the Placing Shares.

By participating in the Placing, Placees (including individuals, funds or otherwise) by whom or on whose behalf a commitment to subscribe for Placing Shares has been given will (i) be deemed to have read and understood this Announcement in its entirety; and (ii) be making such offer on the terms and conditions contained in this Appendix, including being deemed to be providing (and shall only be permitted to participate in the Placing on the basis that they have provided) the representations, warranties, acknowledgements and undertakings contained in this Appendix.

In particular, each such Placee represents, warrants, acknowledges and agrees that:

(a) it is a Relevant Person and undertakes that it will subscribe for, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

(b) if it is a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation or the UK Prospectus Regulation (as applicable), it understands the resale and transfer restrictions set out in this Appendix and that any Placing Shares subscribed for, by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public, other than an offer or resale in a member state of the EEA or the United Kingdom (as applicable) to "Qualified Investors" (as such term is defined in either the Prospectus Regulation or the UK Prospectus Regulation (as applicable)), or in circumstances in which the prior consent of the Joint Bookrunners has been given to each such proposed offer or resale;

(c) it acknowledges that the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold or transferred, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States;

(d) except for a limited number of "qualified institutional buyers" ("QIBs") as defined in Rule 144A under the Securities Act ("Rule 144A") who have made the representations in clause (e), (i) it and the person(s), if any, for whose account or benefit it is acquiring the Placing Shares are purchasing the Placing Shares in an "offshore transaction" as defined in Regulation S under the Securities Act; (ii) it is aware of the restrictions on the offer and sale of the Placing Shares pursuant to Regulation S; and (iii) the Placing Shares have not been offered to it by means of any "directed selling efforts" as defined in Regulation S;

(e) if such Placee is located in the United States, it or any accounts it represents is a QIB and has delivered to the Company and the Joint Bookrunners a US Investor Letter substantially in the form provided to it; and

(f) the Company and each Joint Bookrunner will rely on the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements.

No representation is made by any Joint Bookrunner or its Affiliates to any Placees regarding an investment in the Placing Shares.

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

Defined terms used in this Appendix are set out in Appendix 3.

Bookbuild

Following this Announcement, the Joint Bookrunners will commence a bookbuilding process in respect of the Placing (the "Bookbuild") to determine demand for participation in the Placing by Placees. No commissions will be paid to Placees or by Placees in respect of any Placing Shares. The book will open with immediate effect. Members of the public are not entitled to participate in the Placing. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing.

The Joint Bookrunners and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.

Details of the Placing Agreement and of the Placing Shares

The Joint Bookrunners are acting as joint bookrunners in connection with the Placing. The Joint Bookrunners have today entered into an agreement with the Company (the "Placing Agreement") under which, subject to the conditions set out therein, each Joint Bookrunner has agreed, as agent for and on behalf of the Company, to use its reasonable endeavours to procure Placees for the Placing Shares in such number and at a price to be determined following completion of the Bookbuild in accordance with the Placing Agreement. To the extent that any Placee defaults in paying the Issue Price (as defined below) in respect of any Placing Shares allocated to it, each of Investec and RBC have agreed, severally and not jointly and severally, to subscribe for 50% of such Placing Shares at the Issue Price.

The price per Ordinary Share at which the Placing Shares are to be placed (the "Issue Price") and the final number of Placing Shares will be decided at the close of the Bookbuild following the execution of the placing terms by the Company and the Joint Bookrunners recording the final details of the Placing (the "Placing Terms"). The timing of the closing of the book, pricing and allocations are at the discretion of the Company and the Joint Bookrunners. Details of the Issue Price and the number of Placing Shares will be announced as soon as practicable after the close of the Bookbuild.

The Placing Shares will be duly authorised and will, when issued, be credited as fully paid and will 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 in respect of the Ordinary Shares after the date of issue. The Placing Shares will be issued free of any encumbrances, liens or other security interests.

Application for admission to trading

Application will be made to London Stock Exchange plc (the "London Stock Exchange") for admission of the Placing Shares to trading on AIM ("Admission"). It is expected that Admission will become effective at 8.00 a.m. on 4 October 2021 or such later time and date (being not later than 3.00 p.m. on 18 October 2021) as the Company and the Joint Bookrunners may agree in writing.

Participation in, and principal terms of, the Placing

1. The Joint Bookrunners are arranging the Placing severally, and not jointly, nor jointly and severally, as agents of the Company. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Joint Bookrunners. Each Joint Bookrunner and its Affiliates are entitled to enter bids in the Bookbuild as principal.

2. The Bookbuild, if successful, will establish the Issue Price payable to the Joint Bookrunners by all Placees whose bids are successful. The Issue Price and the aggregate proceeds to be raised through the Placing will be agreed between the Joint Bookrunners and the Company following completion of the Bookbuild. The Issue Price and the number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild (the "Placing Results Announcement"). The Company reserves the right (upon the agreement of the Joint Bookrunners) to reduce or seek to increase the amount to be raised pursuant to the Placing.

3. To bid in the Bookbuild, Placees should communicate their bid by telephone or in writing to their usual sales contact at one of the Joint Bookrunners. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for either at the Issue Price which is ultimately established by the Company and the Joint Bookrunners or at prices up to a price limit specified in its bid. Bids may be scaled down by the Joint Bookrunners on the basis referred to in paragraph 7 below.

4. The Bookbuild is expected to close no later than 7.00 a.m. (London time) on 14 October 2021, but may be closed earlier or later at the discretion of the Joint Bookrunners. The Joint Bookrunners may, in agreement with the Company, accept bids that are received after the Bookbuild has closed.

5. Each prospective Placee's allocation will be agreed between the Joint Bookrunners and the Company and will be confirmed to Placees orally by the relevant Joint Bookrunner following the close of the Bookbuild. Subject to paragraph 9 below, that oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of such Joint Bookrunner and the Company, under which such Placee agrees to subscribe for the number of Placing Shares allocated to it and to pay the relevant Issue Price for each such Placing Share on the terms and conditions set out in this Appendix and in accordance with the Company's corporate documents.

6. Each Placee's allocation and commitment will be evidenced by an electronic contract note and/or electronic trade confirmation issued to such Placee by the relevant Joint Bookrunner. The terms of this Appendix will be deemed incorporated by reference therein.

7. Subject to paragraphs 3 and 4 above, the Joint Bookrunners will, in effecting the Placing, agree with the Company the identity of the Placees and the basis of allocation of the Placing Shares and may scale down any bids for this purpose on such basis as they may determine. The Joint Bookrunners may also, notwithstanding paragraphs 3 and 4 above and subject to the prior consent of the Company, (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time; and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time. The acceptance of offers shall be at the absolute discretion of the Joint Bookrunners.

8. The allocation of Placing Shares to Placees located in the United States shall be conditional on the delivery by each Placee of a US Investor Letter, substantially in the form provided to it, to the Company and the Joint Bookrunners.

9. A bid in the Bookbuild will be made on the terms and subject to the conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and, except with the consent of the relevant Joint Bookrunner, will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the relevant Joint Bookrunner, to pay it (or as it may direct) in cleared funds immediately on the settlement date an amount equal to the product of the Issue Price and the number of Placing Shares that such Placee has agreed to subscribe for and the Company has agreed to allot. Each Placee's obligations will be owed to the relevant Joint Bookrunner.

10. Except as required by law or regulation, no press release or other announcement will be made by any Joint Bookrunner or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

11. Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

12. All obligations under the Bookbuild and Placing will be subject to fulfilment or (where applicable) waiver of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing Agreement".

13. By participating in the Bookbuild, each Placee agrees that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee after confirmation (oral or otherwise) by a Joint Bookrunner.

14. To the fullest extent permissible by law, none of the Company, the Joint Bookrunners nor any of their respective Affiliates or Representatives shall have any responsibility or liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of the Company, the Joint Bookrunners nor any of their respective Affiliates or Representatives shall have any responsibility or liability (including to the extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunners' conduct of the Bookbuild or of such alternative method of effecting the Placing as the Joint Bookrunners and their respective Affiliates and the Company may agree.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. The obligations the Joint Bookrunners under the Placing Agreement are conditional on certain conditions, including, amongst other things:

(a) the Company having complied with its obligations under the Placing Agreement to be performed on or prior to Admission and not being in breach of the Placing Agreement;

(b) the Placing Terms having been executed by the Company and the Joint Bookrunners by no later than 7.00 a.m. on the business day immediately after the date of this Announcement (or such later time and/or date as may be agreed in writing between the Company and the Joint Bookrunners);

(c) the publication by the Company of the Placing Results Announcement through a Regulatory Information Service by not later than 8.00 a.m. on the business day immediately after the date of this Announcement (or such later time and/or date as may be agreed in writing between the Company and the Joint Bookrunners);

(d) the passing without amendment of the Resolutions at the General Meeting (or such later date as the Joint Bookrunners may agree) and such Resolutions remaining in full force and effect;

(e) the Company having allotted, subject only to Admission, the Placing Shares in accordance with the Placing Agreement;

(f) the Amendment and Restatement Agreement having been executed by the parties thereto and there having been no default or breach by the Company or any of the other parties thereto of any of the terms thereof by the time immediately prior to Admission, and all events and conditions contemplated in the Amendment and Restatement Agreement having occurred or been satisfied prior to Admission;

(g) none of the warranties on the part of the Company in the Placing Agreement being untrue, inaccurate or misleading at the time and date of the execution of the Placing Terms, immediately prior to the publication of the Circular, at the date of the General Meeting and immediately prior to Admission as though, in each case, they had been given and made on such date by reference to the facts and circumstances then subsisting;

(h) in the opinion of the Joint Bookrunners (acting together and in good faith), there not having occurred any Material Adverse Change (as such term is defined in the Placing Agreement) at any time prior to Admission; and

(i) Admission having become effective at or before 8.00.a.m. on 4 October 2021 or such later time and/or date (being not later than 3.00 p.m. on 18 October 2021) as the Company and the Joint Bookrunners may agree in writing.

If: (i) any of the conditions contained in the Placing Agreement, including those described above, are not fulfilled or (where applicable) waived by the Joint Bookrunners by the relevant time or date specified (or such later time or date as the Joint Bookrunners and the Company may agree); or (ii) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placing is acting) in respect thereof.

The Joint Bookrunners (acting together and in good faith) may, at their absolute discretion and upon such terms as they think fit, extend or waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement (other than those conditions described in (b), (c), (d), (e), (f), (g) and (i) above may not be waived). Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

No Joint Bookrunner nor any of its Affiliates or Representatives shall have any liability or responsibility to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision it or another person 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 it 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 the Joint Bookrunners.

By participating in the Bookbuild, each Placee agrees that its rights and obligations hereunder terminate only in the circumstances described above and under "Termination of the Placing Agreement" below, and will not be capable of rescission or termination by the Placee.

Termination of the Placing Agreement

At any time before Admission, each Joint Bookrunner is entitled to terminate the Placing Agreement in accordance with its terms in certain circumstances, including, amongst others: (i) there has been a breach by the Company of any of the warranties or undertakings contained in the Placing Agreement or any of the warranties or representations not being, or ceasing to be, true, accurate and not misleading; (ii) in the opinion of a Joint Bookrunner (acting in good faith), there has been a Material Adverse Change or a Specified Event (as such terms are defined in the Placing Agreement); (iii) a statement of a material fact contained in the Placing Documents (as such term is defined in the Placing Agreement) or Circular has, in the opinion of a Joint Bookrunner (acting in good faith), become or is discovered to be untrue, inaccurate or misleading; (iv) a matter has arisen or has been discovered which, if the Placing Documents or Circular were to be issued at that time, would, in the opinion of a Joint Bookrunner (acting in good faith), constitute an omission of a material fact therefrom; (v) if the Company's application for Admission is withdrawn or refused by the London Stock Exchange; (vi) the Company has failed to comply, in any respect which is material in the opinion of a Joint Bookrunner (acting in good faith) with any of its obligations under the Placing Agreement; or (vii) upon the occurrence of certain force majeure events.

If not all the Joint Bookrunners give notice to terminate the Placing Agreement in circumstances where they are able, the Joint Bookrunner(s) who do not give such notice may allow Admission to proceed and will assume the obligations which remain to be performed under the Placing Agreement by the Joint Bookrunner(s) who has given notice to terminate.

By participating in the Placing, Placees agree that the exercise or non-exercise by each Joint Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of such Joint Bookrunner or for agreement between the Company and the Joint Bookrunners (as the case may be) and that neither the Company nor the Joint Bookrunners need make any reference to, or consult with, Placees and that none of the Company, the Joint Bookrunners nor any of their respective Affiliates or Representatives shall have any liability to Placees whatsoever in connection with any such exercise or failure to so exercise or otherwise.

No prospectus

No offering document, prospectus, offering memorandum or admission document has been or will be prepared or submitted to be approved by the FCA (or any other authority) or submitted to the London Stock Exchange (or any other stock exchange) in relation to the Placing and Placees' commitments will be made solely on the basis of publicly available information taken together with the information contained in this Announcement and any Exchange Information (as defined below) previously published by or on behalf of the Company simultaneously with or prior to the date of this Announcement and subject to the further terms set forth in the electronic contract note and/or electronic trade confirmation to be provided to individual prospective Placees.

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement and the publicly available information released by or on behalf of the Company is exclusively the responsibility of the Company and confirms to the Company and each Joint Bookrunner that it has neither received nor relied on any other information, representation, warranty or statement made by or on behalf of the Company (other than publicly available information) or any Joint Bookrunner or its Affiliates or any other person and no Joint Bookrunner nor the Company nor any of their respective Affiliates or any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received (regardless of whether or not such information, representation, warranty or statement was given or made by or on behalf of any such persons). By participating in the Placing, 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. Nothing in this paragraph shall exclude or limit the liability of any person for fraudulent misrepresentation by that person.

Lock-up

The Company has undertaken to the Joint Bookrunners that, between the date of the Placing Agreement and the date which is 90 calendar days after (but including) Admission, it will not, without the prior written consent of the Joint Bookrunners (such consent not to be unreasonably withheld or delayed), enter into certain transactions involving or relating to the Ordinary Shares, subject to certain customary carve-outs agreed between the Joint Bookrunners and the Company.

By participating in the Placing, Placees agree that the exercise by the Joint Bookrunners of any power to grant consent to waive the aforementioned undertaking by the Company shall be within the absolute discretion of the Joint Bookrunners and that they need not make any reference to, or consult with, Placees and that they 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 Placing Shares (ISIN: GB00B4X1RC86) following Admission will take place within the relevant system administered by Euroclear ("CREST"), using the delivery versus payment mechanism, subject to certain exceptions. The Company and the Joint Bookrunners reserve the right to require settlement for, and delivery of, the Placing Shares to Placees by such other means that they deem necessary, including in certificated form, if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Following the close of the Bookbuild for the Placing, each Placee allocated Placing Shares in the Placing will be sent an electronic contract note and/or electronic trade confirmation stating the number of Placing Shares to be allocated to it at the Issue Price, the aggregate amount owed by such Placee to the relevant Joint Bookrunner and settlement instructions. It is expected that such electronic contract note and/or electronic trade confirmation will be despatched on or around 14 September 2021. 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 that it has in place with the relevant Joint Bookrunner or as otherwise as such Joint Bookrunner may direct.

The Company will deliver the Placing Shares to a CREST account operated by each Joint Bookrunner as agent for and on behalf of the Company and each Joint Bookrunner will enter its delivery (DEL) instruction into the CREST system. Each Joint Bookrunner will hold any Placing Shares delivered to this account as nominee for the Placees procured by that Joint Bookrunner. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

Subject to passing of the Resolutions, it is expected that settlement will be on 4 October 2021 on a delivery versus payment basis in accordance with the instructions given to the Joint Bookrunners.

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 the Joint Bookrunners.

Each Placee agrees that, if it does not comply with these obligations, the Joint Bookrunners may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Company'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 shall be required to bear any stamp duty, stamp duty reserve tax or other stamp, securities, transfer, registration, execution, documentary or other similar impost, duty or tax (together with any interest, fines or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. The foregoing is without prejudice to any cause of action the Joint Bookrunners may have against a defaulting Placee.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that, upon receipt, the electronic contract note and/or electronic trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered 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 Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or UK stamp duty reserve tax. If there are any circumstances in which any other stamp duty or stamp duty reserve tax (and/or any interest, fines or penalties relating thereto) is payable in respect of the allocation, allotment, issue or delivery of the Placing 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 Placing Shares), no Joint Bookrunner nor the Company shall be responsible for the payment thereof.

Representations and warranties

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 each Joint Bookrunner (in its capacity as joint bookrunner and as placing agent of the Company in respect of the Placing) and the Company, in each case as a fundamental term of its application for Placing Shares, that:

1. it has read and understood this Announcement, including this Appendix, in its entirety and that its participation in the Bookbuild and the Placing and its subscription for Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Bookbuild, the Placing, the Company, the Placing Shares or otherwise;

2. no offering document, prospectus, offering memorandum or admission document has been or will be prepared in connection with the Placing or is required under the Prospectus Regulation and UK Prospectus Regulation and it has not received and will not receive a prospectus, offering memorandum, admission document or other offering document in connection with the Bookbuild, the Placing or the Placing Shares;

3. (i) it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on this Announcement and any information publicly announced to a Regulatory Information Service by or on behalf of the Company on or prior to the date of this Announcement; and (ii) the Ordinary Shares are admitted to trading on AIM and that the Company is therefore required to publish certain business and financial information in accordance with UK MAR and rules and practices of the London Stock Exchange (including the AIM Rules) (collectively and together with the information referred to in (i) above, the "Exchange Information") which includes a description of the Company's business and the Company's financial information, including balance sheets and income statements, and similar statements for preceding financial years and that it has reviewed such Exchange Information and that it is able to obtain or access such information, or comparable information concerning any other publicly traded company, in each case without undue difficulty; and (iii) it has had access to such Exchange Information concerning the Company, the Placing and the Placing Shares as it has deemed necessary in connection with its own investment decision to acquire any of the Placing Shares and has relied on that investigation for the purposes of its decision to participate in the Placing;

4. none of the Joint Bookrunners or the Company nor any of their respective Affiliates or Representatives nor any person acting on behalf of any of them has provided, and none of them will provide, it with any material or information regarding the Placing Shares, the Bookbuild, the Placing or the Company or any other person other than this Announcement, nor has it requested any of the Joint Bookrunners, the Company, any of their respective Affiliates or Representatives or any person acting on behalf of any of them to provide it with any such material or information;

5. unless otherwise specifically agreed with the Joint Bookrunners, it and/or the person on behalf it is participating is not, and at the time the Placing Shares are subscribed for, neither it nor the beneficial owner of the Placing Shares will be, a resident of a Restricted Jurisdiction or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares;

6. the Placing Shares have not been and will not be registered or otherwise qualified, for offer and sale nor will an offering document, prospectus, offering memorandum or admission document be cleared or approved in respect of any of the Placing Shares under the securities legislation of any Restricted Jurisdiction and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into those jurisdictions or in any country or jurisdiction where any such action for that purpose is required;

7. the content of this Announcement has been prepared by and is exclusively the responsibility of the Company and that no Joint Bookrunner nor any of its Affiliates or Representatives nor any person acting on its or their behalf has or shall have any responsibility or liability for any information, representation or statement contained in this Announcement or any information previously or subsequently published by or on behalf of the Company, including, without limitation, any Exchange Information, and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company or otherwise;

8. the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this Announcement and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares, and that it has neither received nor relied on any other information given or investigations, representations, warranties or statements made by any Joint Bookrunner or the Company or any of their respective Affiliates or Representatives or any person acting on its or their behalf and no Joint Bookrunner nor the Company nor any of their respective Affiliates or Representatives will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement;

9. it has relied on its own investigation, examination and due diligence of the business, financial or other position of the Company in deciding to participate in the Placing and no Joint Bookrunner nor any of its Affiliates has made any representations to it, express or implied, with respect to the Company, the Bookbuild, the Placing and the Placing Shares or the accuracy, completeness or adequacy of the Exchange Information, and each of them expressly disclaims any liability in respect thereof. Nothing in this paragraph or otherwise in this Announcement excludes the liability of any person for fraudulent misrepresentation made by that person;

10. it has not relied on any information relating to the Company contained in any research reports prepared by any Joint Bookrunner, any of its Affiliates or Representatives or any person acting on its or their behalf and understands that (i) no Joint Bookrunner nor any of its Affiliates or Representatives nor any person acting on its or their behalf has or shall have any liability for public information or any representation; (ii) no Joint Bookrunner nor any of its Affiliates or Representatives nor any person acting on its or their behalf has or shall have any liability for any additional information that has otherwise been made available to such Placee, whether at the date of publication, the date of this Announcement or otherwise; and that (iii) no Joint Bookrunner nor any of its Affiliates or Representatives nor any person acting on its or their behalf makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such information (or whether any information has been omitted), whether at the date of publication, the date of this Announcement or otherwise;

11. (i) the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services); (ii) it is not participating in the Placing as nominee or agent for any person to whom the allocation, allotment, issue or delivery of the Placing Shares would give rise to such a liability; and (iii) the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance service;

12. that no action has been or will be taken by the Company, any Joint Bookrunner or any person acting on behalf of the Company or any Joint Bookrunner that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;

13. it (and any person acting on its behalf) is entitled to subscribe for the Placing Shares under the laws of all relevant jurisdictions which apply to it and that it has fully observed such laws and obtained all such governmental and other guarantees, permits, authorisations, approvals and consents which may be required thereunder and complied with all necessary formalities and that it has not taken any action or omitted to take any action which will or may result in any Joint Bookrunner, the Company or any of their respective Affiliates acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the Placing;

14. it (and any person acting on its behalf) has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to its participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations;

15. it has complied with its obligations under the Criminal Justice Act 1993, MAR and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Anti-Terrorism Crime and Security Act 2001, the Terrorism Act 2006, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and the Money Laundering Sourcebook of the FCA and any related or similar rules, regulations or guidelines issued, administered or enforced by any government agency having jurisdiction in respect thereof (together the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations. If within a reasonable time after a request for verification of identity, the Joint Bookrunners have not received such satisfactory evidence, the Joint Bookrunners may, in their absolute discretion, terminate the Placee's Placing participation in which event all funds delivered by the Placee to the relevant Joint Bookrunner will be returned without interest to the account of the drawee bank or CREST account from which they were originally debited;

16. it is acting as principal only in respect of the Placing or, if it is acting for any other person: (i) it is duly authorised to do so and has full power to make, and does make, the acknowledgments, representations and agreements herein on behalf of each such person; and (ii) it is and will remain liable to each Joint Bookrunner and the Company for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);

17. if in a member state of the EEA, it is a "Qualified Investor" within the meaning of Article 2(e) of the Prospectus Regulation;

18. if in the United Kingdom, it and any person acting on its behalf is a Qualified Investor within the meaning of Article 2(e) of the UK Prospectus Regulation: (i) who falls within the definition of "investment professional" in Article 19(5) of the Order; or (ii) who falls within Article 49(2)(A) to (D) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order; or (iii) to whom this Announcement may otherwise lawfully be communicated and that it will subscribe for, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;

19. it understands that 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, and further understands that this Announcement must not be acted on or relied on by persons who are not Relevant Persons;

20. the Placing Shares are being offered and sold on behalf of the Company (i) outside the United States in offshore transactions (as defined in Regulation S) pursuant to Regulation S under the Securities Act and otherwise in accordance with applicable laws, and (ii) in the United States solely to persons who are QIBs and who have delivered to the Company and the Joint Bookrunners a US Investor Letter substantially in the form provided to it, in each case pursuant to an exemption from, or transaction not subject to, the registration requirements under the Securities Act. It and the prospective beneficial owner of the Placing Shares is, and at the time the Placing Shares are subscribed for will be either: (i) outside the United States and subscribing for the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act or (ii) a QIB which has delivered to the Company and the Joint Bookrunners, a US Investor Letter substantially in the form provided to it;

21. it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentation or other materials concerning the Placing (including electronic copies thereof), in or into the United States to any person and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

22. where it is subscribing for the Placing Shares for one or more managed accounts, it is authorised in writing by each managed account to subscribe for the Placing Shares for each managed account and it has full power to make, and does make, the acknowledgements, representations and agreements herein on behalf of each such account;

23. if it is a pension fund or investment company, its subscription for Placing Shares is in full compliance with applicable laws and regulations;

24. if it is acting as a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation or the UK Prospectus Regulation (as applicable), the Placing Shares subscribed for by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be subscribed for with a view to their offer or resale to, persons in a member state of the EEA or the United Kingdom (as applicable) other than "Qualified Investors" (as such term is defined in the Prospectus Regulation of the UK Prospectus Regulation (as applicable)), or in circumstances in which the prior consent of the Joint Bookrunners has been given to the proposed offer or resale;

25. it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to Relevant Persons or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA;

26. any offer of Placing Shares may only be directed at persons in member states of the EEA who are Qualified Investors and that it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA prior to Admission except to Qualified Investors or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the EEA within the meaning of the Prospectus Regulation;

27. it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

28. it has complied and will comply with all applicable laws (including, in the United Kingdom, all relevant provisions of FSMA and the Financial Services Act 2012) with respect to anything done by it in relation to the Placing Shares;

29. if it has received any "inside information" as defined in UK MAR about the Company in advance of the Placing, it has not: (i) dealt in the securities of the Company; (ii) encouraged or required another person to deal in the securities of the Company; or (iii) disclosed such information to any person except as permitted by UK MAR, prior to the information being made publicly available;

30. (i) it (and any person acting on its behalf) has the funds available to pay for, and has the capacity and authority and is otherwise entitled to purchase, the Placing Shares under the laws of all relevant jurisdictions which apply to it; (ii) it has paid any issue, transfer or other taxes due in connection with its participation in any territory; (iii) it has not taken any action which will or may result in the Company, any Joint Bookrunner, any of their respective Affiliates or any person acting on behalf of any of them being in breach of the legal and/or regulatory requirements and/or any anti-money laundering requirements of any territory in connection with the Placing; and (iv) the subscription for the Placing Shares by it (or any person acting on its behalf) will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;

31. it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein against delivery of such Placing Shares to it, failing which the relevant Placing Shares may be placed with other persons or sold as any Joint Bookrunner may in its discretion determine and without liability to such Placee. It will, however, remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest, fines or penalties) due pursuant to the terms set out or referred to in this Announcement which may arise upon the sale of such Placee's Placing Shares on its behalf;

32. its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares to which it will be entitled, and required, to acquire, and that the Joint Bookrunners or the Company may call upon it to acquire a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

33. no Joint Bookrunner nor any of its Affiliates or Representatives nor any person acting on its or their behalf, is making any recommendations to it or advising it regarding the suitability or merits of any transactions it may enter into in connection with the Placing and participation in the Placing is on the basis that it is not and will not be a client of any Joint Bookrunner and that no Joint Bookrunner has any duties or responsibilities to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any Joint Bookrunner's rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

34. the person whom it specifies for registration as holder of the Placing Shares will be (i) itself; or (ii) its nominee, as the case may be. No Joint Bookrunner, the Company nor any of their respective Affiliates will be responsible for any liability to stamp duty or stamp duty reserve tax or other similar duties or taxes (together with any interest, fines or penalties) resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to indemnify the Company, each Joint Bookrunner and their respective Affiliates and Representatives in respect of the same on an after-tax basis on the basis that the Placing Shares will be allotted to the CREST stock account of relevant Joint Bookrunner who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

35. these terms and conditions and any agreements entered into by it pursuant to these terms and conditions (including any non-contractual obligations arising out of or in connection with such agreements) shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by any Joint Bookrunner or the Company in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

36. each of the Joint Bookrunners, the Company and their respective Affiliates and others will rely upon the truth and accuracy of the representations, warranties, agreements, undertakings and acknowledgements set forth herein and which are given to each Joint Bookrunner on its own behalf and on behalf of the Company and are irrevocable and it irrevocably authorises each Joint Bookrunner and the Company 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;

37. it will indemnify on an after-tax-basis and hold the Company, each Joint Bookrunner and their respective Affiliates and Representatives and any person acting on behalf of any of them harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of, directly or indirectly, or in connection with any breach by it of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

38. it irrevocably appoints any director of the Joint Bookrunners as its agent for the purposes of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares agreed to be taken up by it under the Placing;

39. its commitment to acquire Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or the Joint Bookrunners' conduct of the Placing;

40. in making any decision to subscribe for the Placing Shares: (i) it has sufficient knowledge, sophistication and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares; (ii) it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of participating in, and is able to sustain a complete loss in connection with, the Placing and has no need for liquidity with respect to its investment in the Placing Shares; (iii) it has relied solely on its own investigation, examination, due diligence and analysis of the Company and its Affiliates taken as a whole, including the markets in which the Group operates, and the terms of the Placing, including the merits and risks involved, and not upon any view expressed or information provided by or on behalf of any Joint Bookrunner; (iv) it has had sufficient time and access to information to consider and conduct its own investigation with respect to the offer and purchase of the Placing Shares, including the legal, regulatory, tax, business, currency and other economic and financial considerations relevant to such investment and has so conducted its own investigation to the extent it deems necessary to enable it to make an informed and intelligent decision with respect to making an investment in the Placing Shares; (v) it is aware and understands that an investment in the Placing Shares involves a considerable degree of risk; and (vi) it will not look to any Joint Bookrunner, any of its Affiliates or any person acting on its or their behalf for all or part of any such loss or losses it or they may suffer;

41. neither the Company nor any Joint Bookrunner owes any fiduciary or other duties to it or any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement or these terms and conditions;

42. it may not rely on any investigation that any Joint Bookrunner or any person acting on its behalf may or may not have conducted with respect to the Company and its Affiliates or the Placing and no Joint Bookrunner has made any representation or warranty to it, express or implied, with respect to the merits of the Placing, the subscription for or purchase of the Placing Shares, or as to the condition, financial or otherwise, of the Company and its Affiliates, or as to any other matter relating thereto, and nothing herein shall be construed as any investment or other recommendation to it to acquire the Placing Shares. It acknowledges and agrees that no information has been prepared by, or is the responsibility of, any Joint Bookrunner for the purposes of this Placing;

43. it will not hold any Joint Bookrunner or any of its Affiliates or any person acting on their behalf responsible or liable for any misstatements in or omission from any publicly available information relating to the Group or information made available (whether in written or oral form) relating to the Group (the "Information") and that no Joint Bookrunner or any person acting on its behalf makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such Information or accepts any responsibility for any of such Information;

44. in connection with the Placing, the Joint Bookrunners and any of their respective Affiliates acting as an investor for its own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Accordingly, references in this Announcement to Placing Shares being issued, offered or placed should be read as including any issue, offering or placement of such shares in the Company to a Joint Bookrunner or any of its Affiliates acting in such capacity. In addition, a Joint Bookrunner or any of its Affiliates may enter into financing arrangements and swaps with investors in connection with which such Joint Bookrunner or any of its Affiliates may from time to time acquire, hold or dispose of such securities of the Company, including the Placing Shares. No Joint Bookrunner nor any of its Affiliates intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so;

45. it is not subscribing for any Placing Shares as a result of any "directed selling efforts" (within the meaning of Regulation S); and

46. it understands, and each account it represents has been advised that, (i) the Placing Shares have not been and will not be registered under the Securities Act or under the applicable securities laws of any state or other jurisdiction of the United States; and (ii) no representation has been made as to the availability of Rule 144 or any other exemption under the Securities Act or any relevant state or other jurisdiction's securities laws for the reoffer, resale, pledge or transfer of the Placing Shares.

The foregoing acknowledgements, agreements, undertakings, representations, warranties and confirmations are given for the benefit of each of the Company and each Joint Bookrunner (for their own benefit and, where relevant, the benefit of their respective Affiliates and any person acting on their behalf) and are irrevocable.

The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as nominee or agent) free of UK stamp duty and UK 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 Placing Shares in question. Neither the Company nor any Joint Bookrunner will be responsible for any UK stamp duty or UK stamp duty reserve tax (including any interest, fines and penalties relating thereto) arising in relation to the Placing Shares in any other circumstances.

Such agreement is subject to the representations, warranties and further terms above and also assumes, and is based on a warranty from each Placee, that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. Neither the Company nor any Joint Bookrunner are liable to bear any stamp duty or stamp duty reserve tax or any other similar duties or taxes (including, without limitation, other stamp, issue, securities, transfer, registration, capital, or documentary duties or taxes) ("transfer taxes") that arise (i) if there are any such arrangements (or if any such arrangements arise subsequent to the acquisition by Placees of Placing Shares) or (ii) on a sale of Placing Shares, or (iii) otherwise than under the laws of the United Kingdom. Each Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such transfer taxes undertakes to pay such transfer taxes forthwith, and agrees to indemnify on an after-tax basis and hold each Joint Bookrunner and/or the Company and their respective Affiliates (as the case may be) harmless from any such transfer taxes, and all interest, fines or penalties in relation to such transfer taxes. Each Placee should, therefore, take its own advice as to whether any such transfer tax liability arises.

In this Announcement, "after-tax basis" means in relation to any payment made to the Company, any Joint Bookrunner or their respective Affiliates or Representatives pursuant to this Announcement where the payment (or any part thereof) is chargeable to any tax, a basis such that the amount so payable shall be increased so as to ensure that after taking into account any tax chargeable (or which would be chargeable but for the availability of any relief unrelated to the loss, damage, cost, charge, expense or liability against which the indemnity is given on such amount (including on the increased amount)) there shall remain a sum equal to the amount that would otherwise have been so payable.

Each Placee, and any person acting on behalf of each Placee, acknowledges and agrees that the Joint Bookrunners and/or any of their respective Affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares. Each Placee acknowledges and is aware that the Joint Bookrunners are receiving a fee in connection with their roles in respect of the Placing as detailed in the Placing Agreement.

When a Placee or person acting on behalf of the Placee is dealing with a Joint Bookrunner any money held in an account with such Joint Bookrunner on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the relevant Joint Bookrunners' money in accordance with the client money rules and will be used by the relevant Joint Bookrunner in the course of its own business; and the Placee will rank only as a general creditor of that Joint Bookrunner.

Time is of the essence as regards each Placee's obligations under this Appendix.

Any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to any Joint Bookrunner.

The rights and remedies of each Joint Bookrunner and the Company under the terms and conditions set out in this Appendix are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

Each Placee may be asked to disclose, in writing or orally to each Joint Bookrunner: (a) if he or she is an individual, his or her nationality; or (ii) if he or she is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

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.

All times and dates in this Announcement may be subject to amendment by the Joint Bookrunners (in their absolute discretion). The relevant Joint Bookrunner shall notify the Placees and any person acting on behalf of the Placees of any changes.

APPENDIX 3

DEFINITIONS

The following definitions apply throughout this Announcement unless the context otherwise requires:

Unless otherwise indicated in this Announcement, all references to "£", "GBP", "pounds", "pound sterling", "sterling", "p", "penny" or "pence" are to the lawful currency of the UK. All references to "US$", "$" or "dollars" are to the lawful currency of the United States of America.