TSL.L Regulatory News (TSL)

29 November 2019

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

ThinkSmart Limited

("ThinkSmart" or the "Company" which together with its subsidiaries is the "Group")

AGM Statement and Business Update

ThinkSmart Limited (AIM: TSLT.L), a leading digital payment solutions provider, will hold its Annual General Meeting at 8:30am (GMT)(4:30pm AWST) today 29 November 2019 at which the Group's Executive Chairman, Ned Montarello, will make the following statement:

"Ladies and Gentlemen, it has been a transformational year for ThinkSmart.

The sale of 90% of ThinkSmart's Clearpay business to the Australian listed Afterpay Touch Group in August 2018 was a significant positive point for the Group and its shareholders, delivering a profit on sale of £7.9 million plus a further £1.6 million gain on the sale of the one million Afterpay shares received as consideration.

In March 2019 we returned AU$8 million to shareholders and, subject to shareholder approval, we will be returning a further AU$6 million to shareholders in December which will still leave us with a healthy and growing cash balance of approximately AU$14.5 million.

ThinkSmart retains a 10% share of the UK Afterpay business, inclusive of 3.5% being made available to the Afterpay UK employee share ownership scheme, which continues to trade as Clearpay allowing leading retailers to offer a 'buy now, receive now, pay later' service that does not require customers to enter into a traditional loan or pay any upfront fees or interest to Clearpay.

We are encouraged by the early growth of the Clearpay business in the UK which Afterpay recently announced has transacted over AU$100 million of underlying sales in the 4 months to 31 October growing its active customer base to over 400,000 - numbers which are higher than the US Afterpay business at the equivalent stage of development and which has since grown to 2.6 million active customers in just over 17 months.

Following the transaction, Clearpay chose ThinkSmart to provide its outsourced UK call centre customer support service from launch.

ThinkSmart's remaining holding in Clearpay provides shareholders with future upside profit potential through the 5 year call option for Afterpay to purchase ThinkSmart's remaining holding in Clearpay any time after August 2023 at a price calculated on agreed principles based on market valuations at the time of option exercise. ThinkSmart has a reciprocal put option 6 months later to sell its remaining holding in Clearpay to Afterpay. Clearly, ongoing growth in Clearpay is beneficial for ThinkSmart shareholders.

In our core leasing business, volumes from our SmartPlan and Flexible Leasing products remain disappointing, with Flexible Leasing being significantly below the numbers targeted within the contract with Carphone Warehouse.

Our discussions with Carphone Warehouse in relation to the low volumes being generated have proved unsuccessful. As announced today, this has left ThinkSmart with no alternative but to issue formal legal proceedings for their breaches under our Upgrade Everytime and Flexible Leasing agreements. We have therefore issued a claim against The Carphone Warehouse Ltd for damages for losses estimated at £20m, while we continue to fulfil our obligations under the same. In the meantime, we have aligned our cost base with our current volumes and continue to review the ongoing strategy of our leasing business.

ThinkSmart will continue to service its existing end user customer base and the new volumes that are generated from the relationship and will continue to benefit from the cash generated from this business.

We thank our Board, management and employees for their continued hard work and commitment to delivering high quality service, and most of all our shareholders for their continued support. We have seen our share price grow by 150% in the last five months and believe the business is well positioned to increase shareholder value in the years to come."

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About ThinkSmart Limited

ThinkSmart Limited is a leading digital payments company and provider of point of sale retail finance for both consumers and businesses. ThinkSmart's solutions are underpinned by its innovative and scalable proprietary technology platform, 'SmartCheck'. Since it commenced operations in the UK in 2003, the Group has processed in excess of 350,000 customer applications.

ThinkSmart's proprietary SmartCheck technology is easily integrated and proven to deliver new innovative digital payment solutions for retailers with high volume low value transactions.