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Tuesday 02 November, 2021

Marks Electrical Grp

Placing and Proposed Admission to Trading on AIM

RNS Number : 0417R
Marks Electrical Group plc
02 November 2021
 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR THE REPUBLIC OF IRELAND OR TRANSMITTED, DISTRIBUTED TO, OR SENT BY, ANY NATIONAL OR RESIDENT OR CITIZEN OF ANY SUCH COUNTRIES OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION MAY CONTRAVENE LOCAL SECURITIES LAWS OR REGULATIONS.

This announcement is an advertisement and not an admission document or a prospectus and does not constitute or form part of an offer to sell or issue or a solicitation of an offer to subscribe for or buy any securities nor should it be relied upon in connection with any contract or commitment whatsoever in any jurisdiction.    Potential investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of the information in the admission document (the "Admission Document") which will be published by the Company in due course in connection with the proposed admission of its issued and to be issued ordinary shares to trading on AIM, a market operated by London Stock Exchange plc ("AIM"). Copies of the Admission Document will, following publication, be available during normal business hours on any day (except Saturdays, Sundays and public holidays) at the registered office of the Group and online at  group.markselectrical .co.uk, subject to applicable securities laws or regulations.    

2 November 2021

 

Marks Electrical Group plc

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

PLACING AND PROPOSED ADMISSION TO TRADING ON AIM

Marks Electrical, a fast growing online electrical retailer, announces its proposed admission to trading on AIM ("Admission") and its successful placing, conditional on Admission, (the "Placing") of 4,545,454 new ordinary shares (the "New Shares") and 22,727,273 existing ordinary shares (the "Sale Shares") of 1 pence each in the capital of the Company (the "Shares") both at a price of 110 pence per Share (the "Placing Price") with institutional and other investors.

The Company will publish its Admission Document in due course and has applied for Admission. The full terms and conditions of the Placing and Admission will be set out in the Admission Document.

Panmure Gordon (UK) Limited ("Panmure Gordon") is acting as Nominated Adviser, Sole Bookrunner and Broker in relation to the Admission.

Highlights

· Based on the Placing Price, the market capitalisation of the Company will be approximately £115 million on Admission.

· On Admission, the Company will have 104,949,050 Shares in issue and a free float of approximately 25.9 per cent.

· The Placing attracted strong support from high quality institutional investors and was over-subscribed.

·  The Placing of 4,545,454 New Shares is expected to raise approximately £2.6 million after deduction of commissions and expenses ("net proceeds").

· The net proceeds will provide the Company with sufficient cash reserves for potential future investments in capacity enhancement, including additional vehicle capacity to continue scaling-up, as well as the costs associated with moving to larger premises when growth has outstripped the capacity of the existing premises and any leasehold improvements that may be necessitated by such a move.

· The Placing of the Sale Shares is expected to raise gross proceeds of £25.0 million for the Selling Shareholder.

· To reward and incentivise its employees at all levels the Company has adopted the all-employee Marks Electrical Group plc Share Incentive Plan, as well as a discretionary share plan. Under the terms of the Share Incentive Plan, eligible employees will be granted shares worth up to £3,000 each upon Admission. Further details will be contained in the Admission Document.

· Admission and commencement of dealings on AIM are expected to take place at 08:00 a.m. on 5 November 2021 under the ticker "MRK".

· The Company's ISIN is GB00BM8Q5G47 and its SEDOL is BM8Q5G4.

 

Mark Smithson, Founder & Chief Executive Officer of Marks Electrical, commented:

"We have been thrilled with the strong support we have received from institutional investors during the IPO and are delighted to welcome them as shareholders. I am also very pleased that our hardworking staff also now have shares in our company, recognising their significant contribution to making the business what it is today. Becoming a publicly listed company marks the start of an exciting new chapter for Marks Electrical as we push on with our growth plans and I look forward to growing the business alongside the rest of the team in the years to come."

Except where the context requires otherwise, defined terms herein shall have the meanings given to them in the Admission Document.

Marks Electrical

via. Engine MHP

Mark Smithson, CEO

 

Josh Egan, CFO

 

Engine MHP (Financial PR)

[email protected]

Andrew  Jaques

Charlie Barker

+44 (0) 203 128 8540 /+44 (0) 203 128 8549

Rachel Mann

 

Charles Hirst

 

 

 

Panmure Gordon (UK) Limited (NOMAD and Broker)

 

Oliver Cardigan, Ailsa Macmaster (Corporate Finance)

+44 (0) 20 7886 2500

Erik Anderson (Corporate Broking)

 

 

Notes to editors:

Marks Electrical sells, delivers, installs and recycles a wide range of household electrical products. The Marks Electrical group was founded in Leicester in 1987 by its Chief Executive Officer, Mark Smithson, and has expanded into a nationwide online retailer, with a strong track record of growth and scaling the business as a result of the consumer shift to online shopping.

Primarily through its retail website - markselectrical.co.uk - the Company offers over 3,000 products from over fifty brands across its main product categories, which include Cooking, Refrigeration, Washers & Dryers, Dishwashers and Audio-Visual. These products are sourced from UK distributors of the brands, with whom the Group maintains strong and direct relationships. Delivery to customers is operated by its own skilled team of delivery drivers in its owned and branded vehicles, who are also able to offer installation and recycling services.

In the year to 31 March 2021 ("FY2021") revenue grew to £56 million, up 78% against the previous financial year, while EBITDA increased to £7.70 million, at a 13.8% EBITDA margin. The Group has made a strong start to its current financial year to 31 March 2022 ("FY2022"), with revenue growth of 78% in H1 FY2022, versus 47% growth in H1 FY2021.  

 

Important legal information

This announcement is for information purposes only and does not constitute, or form part of, any offer or invitation to sell, allot or issue, or any solicitation of any offer to purchase or subscribe for, any securities in the Company in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as an inducement to enter into, any contract or commitment therefor.

No reliance may be placed, for any purpose whatsoever, on the information or opinions contained in this announcement or on its accuracy, fairness or completeness. To the fullest extent permitted by applicable law or regulation, no undertaking, representation or warranty, express or implied, is given by or on behalf of the Company, Panmure Gordon (UK) Limited ("Panmure Gordon"), or their respective parent or subsidiary undertakings or the subsidiary undertakings of any such parent undertakings or any of their respective directors, officers, partners, employees, agents, affiliates, representatives or advisers or any other person as to the accuracy, sufficiency, completeness or fairness of the information, opinions or beliefs contained in this announcement and, save in the case of fraud, no responsibility or liability is accepted by any of them for any errors, omissions or inaccuracies in such information, opinions or beliefs or for any loss, cost or damage suffered or incurred, howsoever arising, from any use, as a result of the reliance on, or otherwise in connection with, this announcement.

Panmure Gordon, which is authorised and regulated by the Financial Conduct Authority is acting only for the Company in connection with the Placing and Admission and are not acting for or advising any other person, or treating any other person as their respective client, in relation thereto, or advice to any other person in relation to the matters contained herein. Such persons should seek their own independent legal, investment and tax advice as they see fit. Panmure Gordon's responsibilities, as the Company's nominated adviser under the AIM Rules for Nominated Advisers and AIM Rules for Companies will be owed solely to the London Stock Exchange and not to the Company, to any of its directors or to any other person in respect of a decision to subscribe for or otherwise acquire Shares in reliance on the Admission Document. No representation or warranty, express or implied, is made by Panmure Gordon or the Company or their respective affiliates as to any of its contents.

This announcement does not form the basis of or constitute any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or commitment therefor. In particular, this announcement does not constitute an offer to sell, or a solicitation of an offer to buy, Shares in the United States. Shares may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"), except pursuant to an available exemption from, or in a transaction not subject to, the registration requirements under the Securities Act. The Shares have not been, and will not be, registered under the Securities Act and will not be offered to the public in the United States. The Shares have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan, South Africa or the Republic of Ireland. Subject to certain exceptions, the Shares may not be offered or sold in Australia, Canada, Japan, South Africa or the Republic of Ireland or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, Japan, South Africa or the Republic of Ireland. There will be no public offer of the Shares in Australia, Canada, Japan, South Africa or the Republic of Ireland or elsewhere.

This announcement is only addressed to and directed at: (A) if in member states of the European Economic Area (the "EEA"), persons who are "qualified investors" within the meaning of Article 2(e) of the Prospectus Regulation (EU) 2017/1129 (as amended) ("Qualified Investors"); and (B) if in the United Kingdom, persons who are (a) both "qualified investors" within the meaning of the UK version of the EU Prospectus Regulation (2017/1129/ EU) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018 (the "UK Prospectus Regulation") and either (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) who are high net worth entities falling within Article 49(2)(a) to (d) of the Order; or (b) other persons to whom it may otherwise lawfully be communicated (all such persons under (a) and (b) together being referred to as "relevant persons"). Any investment or investment activity to which this announcement relates will be available in the United Kingdom only to relevant persons and to Qualified Investors in any member state of the EEA and will be engaged in only with such persons.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These statements reflect beliefs of the Directors (including based on their expectations arising from pursuit of the Group's strategy) as well as assumptions made by the Directors and information currently available to the Group.  Although the Directors consider that these beliefs and assumptions are reasonable, by their nature, forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the Group's actual financial condition, results of operations, cash flows, liquidity or prospects to be materially different from any future such metric expressed or implied by such statements. Past performance cannot be relied upon as a guide to future performance and should not be taken as a representation that trends or activities underlying past performance will continue in the future. Forward-looking statements speak only as of the date they are made. No representation is made or will be made that any forward-looking statements will come to pass or prove to be correct.

For the avoidance of doubt, the contents of the Group's websites are not incorporated by reference into, and do not form part of, this announcement.

Information to the distributor

Solely for the purposes of the product governance requirements contained within the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK Product Governance Rules"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Rules) may otherwise have with respect thereto, the Shares have been subject to a product approval process, which has determined that the Shares are: (i) compatible with an end target market of investors who meet the criteria of professional clients and eligible counterparties each as defined in the FCA Handbook Conduct of Business Sourcebook ("COBS"); and (ii) eligible for distribution through all distribution channels as are permitted by the UK Product Governance Rules (the "UK Target Market Assessment").

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Shares have been subject to a product approval process, which has determined that the Shares are: (i) compatible with an end target market of investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "EU Target Market Assessment").

Notwithstanding the UK Target Market Assessment and the EU Target Market Assessment, distributors should note that: the price of the Shares may decline and investors could lose all or part of their investment; the Shares offer no guaranteed income and no capital protection; and an investment in the 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. Each of the UK Target Market Assessment and the EU 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 UK Target Market Assessment and the EU Target Market Assessment, Panmure Gordon will only procure investors who meet the criteria of professional clients and eligible counterparties each as defined under COBS or MiFID II, as applicable.

For the avoidance of doubt, each of the UK Target Market Assessment and the EU Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A respectively of COBS or MiFID II, as applicable; 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 Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Shares and determining appropriate distribution channels.

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