Restructuring of Payment Division

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

23 March 2021

ST. JAMES HOUSE PLC

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

Restructuring of Payment Division

During 2019, the Group established a new subsidiary, St. Daniel House Limited, which is approved as an EMD Agent [1] by the Financial Conduct Authority ("SDH"). During 2020, the Group rolled out its new FX, payment, account and merchant services on the superior SDH platform, migrating most customers from its legacy platforms. During that period, the Group's card issuing, and e-wallet activities remained within its Market Access Ltd subsidiary ("MA"). However, the institution used by MA to issue cards and the associated e-wallet services has withdrawn from the European market. The Board concluded that it will be beneficial to integrate the pre-paid card issuing and e-wallet offered by its new service provider with SDH's merchant and multicurrency account services in order to service our European and international client base. MA has no ongoing trading activities.

The Board has therefore agreed to sell MA to MDC Nominees Limited ("MDC") for £1.00 (the "Disposal"). MDC has previously acquired other subsidiaries involved in payments from SJH and has an existing commercial and creditor arrangement with SJH, as announced 12 July 2018 and updated on 6 February 2020 (the "Announcements"). MA will form part of that existing contractual arrangement and MDC, which is expected to utilise the legacy platform for its "non-conforming" customers, as set out in the Announcements.

Due to the nature of the "non-conforming" business undertaken by MDC and its subsidiaries, there are often legal disputes, which was one of the key reasons for SJH exiting this type of business. However, if MDC is successful in certain current legal claims, then under the terms of the original disposal of its interest, SJH is expected to benefit from accelerated repayment of the loan note due from MDC (as set out in the Announcements). SJH is not directly or through any of its subsidiaries engaged in any litigation.

MA made a loss of £321.5k in the 12 months to 31 January 2019 (the date of the last published Group accounts) and had a negative net asset position of £98.2k as of 31 January 2019. As MA continued to make losses during the financial year to 31 January 2021, the Disposal will have a modest positive impact on both the trading performance and balance sheet of the Group.

MDC is owned by John Botros, a director of certain Group subsidiaries and, with persons closely associated (as defined under the Market Abuse Regulation), a substantial shareholder (as defined by the AIM Rules for Companies) of the Company. The Transaction therefore constitutes a related party transaction under the AIM Rules for Companies. The Board consider, having consulted with Allenby Capital Limited, the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned.

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