Van Elle Regulatory News (VANL)

22 November 2017

Van Elle Holdings plc

("Van Elle")

Notice of General Meeting and Posting of Circular to Shareholders

The Board's unanimous recommendation is to VOTE AGAINST all of the Ellis Resolutions

Further to the announcement dated 13 November 2017 in connection with the requisition of a general meeting of the Company by Michael Ellis (the "General Meeting"), Van Elle announces that the circular containing the notice of general meeting (the "Circular") is being posted today to Van Elle shareholders ("Shareholders"). The Circular will shortly be available on the Company's website at: www.van-elle.co.uk.

The letter from the Chairman contained within the Circular is set out in the appendix to this announcement.

The Board unanimously recommends that Shareholders VOTE AGAINST all of the Ellis Resolutions to be proposed at the General Meeting for the following reasons:

· the Company's strategy remains unchanged with the Board working to deliver this strategy;

· the Company delivered profit growth in FY2017 and the Board's expectations for FY2018 are

unchanged;

· the Board is engaged in an independent process to identify a new Chief Executive Officer; and

· the Ellis Resolutions would significantly weaken the independence of the Board and the overall level of corporate governance within the Company.

The Board believes the Ellis Resolutions reflect the failure by Mr Ellis to accept that Van Elle is no longer his private family business and that the Ellis Resolutions serve to promote the interests of Mr. Ellis and his family, not necessarily to the benefit of the Company and its other Shareholders.

Details of the General Meeting

The General Meeting will be held at the offices of Eversheds Sutherland (International) LLP, One Wood Street, London EC2V 7WS at noon on 15 December 2017.

Expected Timetable of Principal Events:

Adrian Barden, Chairman of Van Elle, commented:

"The requisition by Michael Ellis is simply an attempt by him to gain greater control over the business at the expense of other shareholders. He seems reluctant to accept that Van Elle is no longer his private family business and that it is now subject to full and proper corporate governance.

"Van Elle is a business in good health, has a strong management team and has an exciting strategy to grow the business over the medium-term.

"The Board unanimously and strongly recommends that shareholders vote against all the resolutions."

Enquiries:

Market Abuse Regulation

The information contained within this announcement is deemed by Van Elle to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this announcement via a regulatory information service, this inside information is now considered to be in the public domain.

APPENDIX

CHAIRMAN'S LETTER

(EXTRACTED FROM PAGES 5 TO 9 OF THE CIRCULAR)

"Dear Shareholder

1. INTRODUCTION

I am writing to you because we have to convene a general meeting. Before I deal with that, I thought it would be helpful to bring you up-to-date with developments at your Company. We have issued two announcements today: a trading update and news on the management team.

I am pleased to tell you that trading overall has been good in the first half of the current year and your Board has confirmed that its expectations for the full year remain unchanged. The Board considers this performance to be a direct consequence of the strategy we put in place at the time of Admission at the end of last year and we look forward to reporting on further progress as we move forward.

Sadly, I have to let you know that, unfortunately due to a serious medical matter within his close family, which has become acute in recent weeks, Jon Fenton has, regrettably, taken the difficult decision to step down as Chief Executive Officer once a successor has been appointed. The Board understands and supports Jon's decision (which it emphasises is completely separate from Mr. Ellis' actions) and I know you will join with me in sending Jon and his family our very best wishes at this difficult time.

The Board will conduct a comprehensive and objective search process to identify a new Chief Executive Officer who brings relevant commercial, operational and strategic experience to the Group and who can, together with the senior management team and the other members of the Board, continue to take the business forward. We are fortunate to have strength in depth across our management team and whilst Jon has indicated that he will remain in post until his successor is appointed, we have organised responsibilities amongst the executive management team to ensure continuity and also to allow Jon to take time away from the Company as required.

Van Elle is a business in good health, with a strong management team and a strategy to grow over the medium-term.

2. REQUISITION OF GENERAL MEETING

On 13 November 2017, your Board announced that it had received a requisition notice from Mr Michael Ellis to convene a general meeting of the Company. Mr Ellis, along with his wife, two daughters and a related family trust own, in aggregate, approximately 20% of the Shares.

At the request of Mr Ellis, there are five resolutions to be considered and voted upon at the General Meeting:

1. the appointment to the Board of Michael Ellis as a director;

2. the appointment to the Board of Thomas Lindup as a director;

3. the removal from the Board of Jon Fenton as a director;

4. the removal from the Board of Robin Williams as a director; and

5. the removal of any person appointed as a director of the Company since the Requisition Date and who is not one of the persons referred to in the resolutions numbered 1 to 4 (inclusive) above.

This letter sets out the reasons why your Board unanimously and strongly recommends that Shareholders VOTE AGAINST the Ellis Resolutions.

3. BACKGROUND

At the time of Admission on 26 October 2016, Mr Ellis was non-executive chairman of the Company. Jon Fenton, who had been appointed by Mr Ellis as Chief Executive Officer of the Group in 2010, continued in that role following Admission. As part of the IPO, the Ellis Family Shareholders sold approximately 20.5 million Shares, valued upon Admission at approximately £20.5 million, and retained an aggregate holding of approximately 20% of Shares in the Company. On 31 December 2016, a little over two months after Admission, Mr Ellis, age 73, retired from the Board.

Thomas Lindup, Mr Ellis' son-in-law, left the Company on 6 March 2017, having been a director on the Board since April 2015. At the time, your Board concluded that there was no need to directly replace Mr Lindup on the Board.

Following his departure, Mr Ellis has corresponded with your Board and sought face-to-face meetings, which your Board has accommodated, recognising both his history with the Company and his family's interest in the Company. Your Board has sought to have a constructive engagement with Mr Ellis, on the same basis as it would with large institutional shareholders, albeit recognising the fact that the Company is no longer a private family business and that it has responsibilities and obligations as an AIM quoted company.

Given this approach, your Board is disappointed by Mr Ellis' behaviour in proposing the Ellis Resolutions, which the Directors consider serve to promote the interests of himself and his family, not necessarily to the benefit of the Company and its other Shareholders.

Over the course of the Board's engagement with Mr Ellis, he has requested detailed information on the Company's strategic direction and its trading performance, above that which is publicly available. The Board believes that these requests reflect both a refusal by Mr Ellis to acknowledge that the Company is no longer a private family business in which he has majority control and a lack of understanding of the rules related to quoted companies.

The Board believes that the recent actions of Mr Ellis are driven more by his personal agenda than the interests of the Shareholders as a whole. In addition, your Board considers Mr Ellis' actions to be both disruptive and damaging to the Company, its Shareholders and its stakeholders.

Your Board believes that the Ellis Resolutions are simply an attempt by Mr Ellis to secure a greater level of control of the Company against the recommendation of the Board.

Accordingly, your Board unanimously and strongly recommendsthat you VOTE AGAINST the Ellis Resolutions, in order to allow the continued deliveryof the Company's strategy set out at the time of its Admission.

4. THE ELLIS RESOLUTIONS ARE UNWARRANTED AND SHOULD BE REJECTED

The Company's strategy remains unchanged and is being delivered by the Board

Mr Ellis was non-executive chairman at the time of Admission in October 2016, when the Company's strategy for growth was clearly set out in the Admission Document. The strategy remains unchanged and, since Admission, the Company has delivered good progress including:

• expanding its rig fleet;

• broadening its range of specialist capabilities, techniques and services;

• launching its new Scottish operation in January 2017, manufacturing pre-cast concrete products and predominantly servicing the Scottish market; and

• completing and opening our modern training centre in Kirkby, Nottinghamshire.

The Company raised approximately £7.4 million of net proceeds as part of its IPO, with the intention of undertaking selective acquisitions to complement its organic growth plans. Whilst the Company has investigated a number of potential targets, your Board remains focused on ensuring that it makes the right acquisitions at the right value and at the right time.

Given that this strategy remains unchanged from Mr Ellis' time as non-executive chairman, the Board sees no merit in Mr Ellis' concerns over the strategy.

The Company's trading performance is robust and its prospects good

In its maiden full year results as a quoted company, Van Elle reported record revenue and underlying* operating profit. For the year ended 30 April 2017, Group revenue increased by approximately 11.8% to £94.1 million, with growth across all four divisions, and underlying* operating profit increased by approximately 4.6% to £11.6 million. In line with its stated intention to reward Shareholders and to deliver value to them, the Company paid a total dividend for the financial year end 30 April 2017 of 2.6 pence per Share.

As announced today, this encouraging trading performance has continued into the current financial period. For the six months ended 31 October 2017, the Board anticipates reporting revenues of approximately £53 million (H1 2016: £43.1 million), with underlying* profit before tax increasing by approximately 15%. In addition, the Board has confirmed that its expectations for the year ending 30 April 2018 remain unchanged.

* Stated before share-based payments and exceptional costs.

Whilst Mr Ellis has sought to raise questions over the Group's financial performance and prospects, the half year trading update confirms further profitable growth by Van Elle and that the Board is confident that the Group remains well positioned for continued development into the future.

Mr Ellis has also suggested that staff turnover is high and adversely impacting the business. The Board refutes this suggestion completely and considers that the Ellis Resolutions are in fact themselves damaging to staff morale. In addition, the Board believes that the uncertainty caused by the Ellis Resolutions could negatively impact the Company's ability to both retain and recruit staff in the short to medium term.

The Board considers that the proposed directors would create a less effective Board

Whilst Michael Ellis is the founder of the Company and a former non-executive chairman, Jon Fenton, who was specifically brought back into the business by Mr Ellis, has been Van Elle's Chief Executive Officer since 2010 with full-time executive responsibility for the day-to-day operations. Over this time, the Group has grown significantly in scale and complexity, with an increased workforce, capital base and number of services offered.

The Board considers that the Ellis Resolutions are unwarranted and that Mr Ellis' willingness to embark upon them, in spite of the fact that they are, in the Board's view, disruptive and damaging to the Company, forms a strong case as to why he should not be a director at this time. Further, the Board considers that such an appointment would adversely impact the effective day-to-day running of the Company and not be in the interests of Shareholders as a whole.

Mr Ellis' son-in-law, Thomas Lindup, was, prior to joining Van Elle in 2015, a lawyer. The Board considers that whilst Mr Lindup's previous legal experience was beneficial to the Group ahead of its admission to AIM, following his departure in March 2017 the Board was satisfied that his responsibilities could be absorbed by other senior colleagues on the executive management team. Consequently, the Board does not believe that Mr Lindup would bring any complementary skills or experience to the current Board at this time and the Board considers that this, together with the fact that Mr Lindup cannot be considered to be independent from Mr Ellis and his family, make his proposed appointment as a director inappropriate and not in the interests of Shareholders as a whole.

Since Admission in October 2016, the Board has been focussed on continuing to enhance its corporate governance, building a leadership framework which is both appropriate for a publicly traded company and capable of supporting the Group as it continues to grow. The Board believes that neither Mr Ellis nor Mr Lindup would bring complementary skills or objective insight to the Group at this time and further that their proposed appointment would be a backward step in Van Elle's transition away from being a private business dominated by the Ellis Family Shareholders.

Mr Ellis' actions could adversely impact the proper succession process

The Board is initiating a formal process to identify the best possible successor to Jon Fenton as Chief Executive Officer. As part of this process, the Board is undertaking a comprehensive and objective search process to identify candidates who would bring the right commercial, operational and strategic experience to the Group and Jon has kindly agreed to remain with the Company during this time to ensure a smooth transition.

The Board is focussed on ensuring that this succession process is conducted in the best interests of all stakeholders and without impacting the Group's business. The Board believes that each of the Ellis Resolutions, if passed, would be potentially damaging to this process, deter potential candidates from coming forward and risk de-stabilising the Group.

The Ellis Resolutions would weaken the corporate governance of the Company

At the time of its admission to AIM, recognising that it was no longer a private family business, the Company committed to and adopted high standards of corporate governance. These actions included the appointment of Adrian Barden and Robin Williams as independent non-executive directors. The Board remains committed to this approach and the independence of the Board has been further strengthened by the appointment of David Hurcomb on 1 November 2017.

In the Board's view, the Ellis Resolutions would significantly weaken the independence of the Board and the overall level of corporate governance within the Company:

• Mr Ellis and his son-in-law, Thomas Lindup, are not considered by the Board to be independent given that the Ellis Family Shareholders own approximately 20% of the Shares;

• the Board considers that the Ellis Resolutions would significantly reduce the level of knowledge and experience of publicly traded companies on the Board, as the proposed removal of Robin Williams would leave Adrian Barden as the only non-executive director with significant experience of acting as a director of a publicly traded company;

• the proposed election of Mr Ellis and Mr Lindup would bring collective experience of acting as a director of publicly traded companies of approximately 7 months to the Board, compared to the very experienced Robin Williams; and

• Mr Ellis' proposal to remove Robin Williams would leave the Company without an appropriately qualified independent director to chair the Audit Committee.

Accordingly, the Board believes the Ellis Resolutions demonstrate an alarming disregard by Mr Ellis of what is required by a publicly traded company. The proposals would constitute a step backwards from the properly constituted Board which he himself put in place at the IPO to run the Company effectively and represent the interests of all Shareholders.

In summary, the Board considers that the concerns of Mr Ellis regarding the Company's strategy and its financial performance are unfounded and that his proposed resolutions are both ill-thought through and inappropriate for a publicly traded company.

The Board believes the Ellis Resolutions reflect the failure by Mr Ellis to accept that Van Elle is no longer his private family business and the Board considers that the Ellis Resolutions serve to promote the interests of Mr Ellis and his family, not necessarily to the benefit of the Company, its Shareholders and its stakeholders.

5. RECOMMENDATION

Your Board has spent time and effort engaging with Mr Ellis since his retirement from the Board on 31 December 2016. As a result, we are disappointed that he has requisitioned the General Meeting which the Board considers disruptive and damaging to the Company, its Shareholders and its stakeholders.

Your Board strongly believes that the Ellis Resolutions should be rejected because:

• the Company's strategy remains unchanged, with the Board working to deliver such strategy;

• the Company delivered profit growth in FY2017 and the Board's expectations for FY2018 are unchanged;

• the Board is engaged in an independent process to identify a new Chief Executive Officer; and

• they would significantly weaken the independence of the Board and the overall level of corporate governance within the Company.

The Board considers that the Ellis Resolutions reflect the failure by Mr Ellis to accept that Van Elle is no longer his private family business.

Accordingly, the Board unanimously and strongly recommends that Shareholders VOTE AGAINST the Ellis Resolutions.

Yours faithfully,

Adrian Barden

Chairman"

DEFINITIONS

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

"Admission Document" the document dated 21 October 2016 relating to the admission of the Shares to trading on AIM

"AIM" the market of that name operated by the London Stock Exchange plc

"Board" the current board of directors of the Company

"Company" or "Van Elle" Van Elle Holdings plc, a public limited company registered in England and Wales with registered number 04720018

"Directors" the directors of the Company

"Ellis Family Shareholders" Mr Michael Ellis, Mrs Joan Ellis, Mrs Julia Duffey, Mrs Suzanne Lindup and the MFE Discretionary Trust

"Ellis Resolutions" or "Resolutions" the ordinary resolutions to be proposed at the General Meeting (and set out in the Notice contained in the Circular)

 "Form of Proxy" the Form of Proxy enclosed with the Circular, for use by Shareholders in connection with the General Meeting

"General Meeting" the general meeting of the Company to be held at noon on 15 December 2017 (and any adjournment thereof) for the purposes of considering and, if thought fit, passing the Resolutions

"Group" the Company and its subsidiaries

"IPO" or "Admission" the admission of the Shares to trading on AIM on 26 October 2016

"Notice" the notice of the General Meeting set out on pages 16 to 18 (inclusive) of the Circular

"Requisition Date" 10 November 2017

"Shareholder" a holder of Shares

"Shares" the ordinary shares of £0.02 each in the capital of the Company, having the rights set out in the articles of association of the Company

"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland

"pence", "pounds sterling",

"sterling", "£" or "p" the lawful currency of the United Kingdom

All times referred to are London time unless otherwise stated.

All references to legislation in this announcement are to the legislation of England and Wales unless the contrary is indicated. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.

Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.