Update re Marwyn, current trading and funding

Unbound Group PLC

10 May 2023

 

Unbound Group plc

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

Update re Marwyn proposal, current trading and funding

On 12 April 2023, the Company announced that it was in receipt of a proposal from Marwyn Investment Management LLP ("Marwyn") to provide a £10 million investment via an equity placing at an issue price of 10.5 pence per share (the "Fundraise"). The Company and Marwyn, together with their respective advisers, have spent the subsequent period progressing preparations for the Fundraise.

As referred to in the Company's announcement of 12 April 2023, Marwyn's proposal was put forward on the basis that it was unconditional both as to diligence requirements and as to quantum of additional capital (if any) contributed by existing Unbound shareholders. After carefully considering the merits and conditionality of this proposal against others, the Board elected to expedite the Marwyn proposal.

On 9 May 2023, Marwyn informed the Company that its funding proposal had been withdrawn, citing principally concerns over current trading. As a result, the Board confirms that discussions regarding the Fundraise have been terminated with immediate effect.

Trading Update:

The Board further reports that the trading environment has remained challenging over Q1 of the Company's new financial year (FY24), with conditions worsening compared with those outlined in the FY23 trading update announced on 17 January 2023. This has resulted in Q1 revenues being lower than the Board previously anticipated, offset by the Board's previously notified cost reduction programme, which is on-track to deliver £2.3 million of annualised savings from the Group's current operating model by the third quarter of FY24. As such, as a result of these actions, the Board anticipates that profitability for Q1 is expected to be broadly in-line with its previous expectations. The Board is also well advanced in conducting a wider review of the operating structure of the Group in order to drive growth of revenue and profits over the medium term.

Whilst these actions are ongoing, a primary focus for the Board continues to be managing cash flows very tightly given the Group's continuing working capital funding constraints. The Group has maintained regular dialogue with its core banking partners who have maintained their support throughout this period, including the waiver of certain covenants under existing borrowing facilities. The Board considers it likely that the Group will require further covenant waivers in the short-term and will continue with its constructive dialogue with its banking partners.

The Board is continuing to work with the Group's advisers and banking partners with a view to raising additional funding or refinancing its existing borrowing facilities in order to provide the appropriate balance sheet structure and level of working capital headroom. In the meantime, the Board is managing the Group's working capital actively to ensure that short-term liquidity is maintained. To this aim, the Board has appointed Interpath Advisory to work alongside the Company's Nominated Adviser and Broker, Singer Capital Markets.

The Board will provide further updates to shareholders as appropriate.

Enquiries

Unbound Group plc Ian Watson, CEO Gavin Manson, CFO	c/o Alma PR
Singer Capital Markets (Financial Adviser, Nominated Adviser & Broker) Peter Steel / Tom Salvesen / Alaina Wong / James Fischer	[phone]
Alma PR Limited (Financial PR) Josh Royston / Sam Modlin / Hannah Campbell	[phone] [e-mail]

This announcement contains inside information for the purposes of the retained UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").

 

END