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Thursday 05 February, 2015

Non-Standard Finance

Intention to Float

RNS Number : 0924E
Non-Standard Finance PLC
05 February 2015
 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR SOUTH AFRICA.

 

This announcement is an advertisement and not a prospectus. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information contained in any prospectus (the "Prospectus") in its final form that may be published by Non-Standard Finance plc ("NSF" or the "Company") in due course in connection with the admission of the Company's ordinary shares (the "Ordinary Shares") to the Official List of the Financial Conduct Authority (the "FCA") (Standard Listing Segment) and to trading on the Main Market for listed securities of London Stock Exchange plc (the "London Stock Exchange"). Following its publication, the Prospectus will (subject to certain access restrictions) be available online at www.nonstandardfinance.com and at the Company's registered office. This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in the United States, Australia, Canada, Japan, New Zealand, South Africa or in any other jurisdiction.

 

 

Non-Standard Finance plc

 

 

Non-standard consumer finance acquisition vehicle announces intention to list on the Main Market

 

Non-Standard Finance plc, which has been established to acquire and operate one or more non-standard consumer financial services businesses, announces its intention to proceed with an initial public offering (the "Offer" or "IPO") to raise equity capital for acquisition purposes. The Company will apply for admission of its Ordinary Shares to the Official List of the FCA (Standard Listing Segment) ("Standard Listing") and to trading on the Main Market of the London Stock Exchange ("Main Market"), and the Offer will comprise a Placing of Ordinary Shares with institutional and professional investors (the "Placing").

 

Highlights

 

§  Intention to raise approximately £100m to acquire and operate one or more companies or businesses in
  the UK non-standard consumer finance sector

§  c.£48m of cornerstone investment secured from Woodford Investment Management LLP ("Woodford"),
  Invesco Asset Management Limited ("Invesco") and Marathon Asset Management ("Marathon") (based
  on an offer size of £100m)

§  Strong, highly experienced and respected Board with a successful track record in the sector

§  Intention to generate value for shareholders through operational improvements and additional
  complementary acquisitions

§  The Directors believe the sector - and NSF - have strong potential to grow, generate cash and pay
  dividends

§  Placing price of £1.00 per share ("Placing Price")

§  Standard Listing on the Main Market

§  Closing of the order book, publication of the Prospectus and allocations expected next week

 

John van Kuffeler, NSF's Chairman, said:

"Following the financial crisis a significant part of the UK's population cannot gain access to mainstream financial services. A number of entrepreneurial start-ups began to fill the gap in the market, but many of these firms lack the capability to reach their full potential. By treating customers fairly, delivering excellent service and lending responsibly, we plan to establish a sustainably profitable group of businesses serving an important socio-demographic cluster."

 

 

Introduction

 

NSF today announces its intention to raise approximately £100m, including c.£48m of cornerstone investment already secured from Woodford, Invesco and Marathon (based on an offer size of £100m), through a placing of its Ordinary Shares. Application will be made for the Ordinary Shares to be admitted to a Standard Listing and to trading on the Main Market ("Admission").

 

Following Admission, the Company intends initially to acquire at least one (and preferably two or three) target companies or businesses in the UK non-standard consumer finance sector.

 

The Company's Board of Directors comprises John van Kuffeler, Nick Teunon, Miles Cresswell-Turner, Charles Gregson, Robin Ashton and Heather McGregor, all of whom except Heather McGregor are founder Directors with extensive experience of the UK's non-standard consumer finance sector, making acquisitions and operational improvement.

 

The value opportunity

 

Non-standard consumer finance is the provision of secured and unsecured credit to consumers otherwise than through mainstream financial institutions.  In the UK, it is estimated that there are currently approximately 12 million people who do not meet the credit criteria of mainstream financial institutions; these potential customers can be creditworthy, but need a different type of credit facility provided by specialist finance companies.

 

The Directors estimate that non-standard consumer finance accounts for c.40% of secured and c.30% of unsecured lending in the UK. As non-standard lending volumes by previous market leaders have declined following the 2007/2008 financial crisis, a significant portion of the UK population has found itself with limited credit-raising options, an issue which is now being addressed by new specialist entrants into the market.

 

The Directors believe that many of these firms in the non-standard consumer finance sector have reached a stage of development where more professional management expertise and additional investment is required.

 

NSF intends to enable its acquired companies or businesses to realise their growth potential through scaling of IT, capital, compliance and finance platforms.

 

The Directors believe that the returns to shareholders have the potential to be high in non-standard consumer finance because they expect the following:

 

§ High growth in the non-standard consumer finance sector - continuing improvement in economic conditions with changes in customer behaviour and preferences are expected by the Directors to support growth in the non-standard finance sector

§ High margin returns that can be charged - costs of more frequent and more face-to-face customer interaction, and the higher risk profile of loans made, generally involve higher margins

§ High returns on equity - the Directors aim to achieve an overall return on equity of 20-30% for the Company through the combination of high growth in the sector and the opportunity to leverage the Directors' experience and knowledge

§ Strong dividend paying capability - the Directors expect that the strong cash flow generating capabilities of the types of businesses the Company may acquire should allow for the payment of regular and growing dividends over time.

 

Business strategy and execution

 

The Company has been set up as a vehicle to acquire at least one (and preferably two or three) target companies or businesses in the UK non-standard consumer finance sector. Once the Company has made and combined these acquisitions so that it is a substantial operating entity, its intention is to expand through further acquisitions in the sector in the UK and possibly elsewhere.

 

Following completion of an acquisition, the objective of the Company will be to operate the acquired business and implement an operating strategy with a view to generating value for its shareholders through operational improvements as well as potentially through additional complementary acquisitions.

 

Out of over 100 non-standard lending businesses in the UK, the Directors have identified around 20 companies that could be of interest to the Company. The Directors are currently interested in pursuing acquisitions in the following sub-sectors: guaranteed loans, consumer loans, rent to own and home collected credit, all of which are in non-standard unsecured consumer finance.

 

The Directors intend to make the first acquisition within six months. The Company may make acquisitions of companies or businesses for either cash consideration or a mixture of cash consideration and an issue of shares in the Company.

 

Following an acquisition, if required, the Company intends to seek re-admission of the enlarged group to a listing on the Official List and trading on the Main Market or admission to another stock exchange. Subject to eligibility, the Directors may seek admission to the Premium Listing Segment of the Official List of the FCA.

 

If no acquisitions are made within two years, the Directors will recommend to shareholders either that the Company is wound up or that the Company continues to pursue an acquisition for a further year. 

 

The Directors

 

The Directors comprise a knowledgeable and experienced group. The founder Directors have extensive experience of non-standard consumer finance, making acquisitions and operational improvement, and have each worked together with the Chairman before. The Directors further believe that their track records demonstrate their ability to generate value for investors and complete operational improvements to companies.

 

§ John van Kuffeler (Chairman) - Former CEO and then Chairman of Provident Financial plc, Chairman of Marlin Financial Group Limited, former Chairman of Hyperion Insurance Group Limited

§ Nick Teunon (CFO & Company Secretary) - Former CFO of Marlin Financial Group Limited, former CFO of FTSE International, former Group Finance & Strategy Director at the Press Association, former Finance Director and Company Secretary of Water Hall Group plc

§ Miles Cresswell-Turner (Director) - Partner in Duke Street LLP, formerly a partner in Palamon Capital Partners LLP and a director of the Leveraged Finance Team at HSBC Investment Bank

§ Charles Gregson (Non-Executive Director) - Chairman of ICAP Group plc and Director of Caledonia Investments plc, former Chairman of Wagon Finance Group Limited, former Non-Executive Director of Provident Financial plc and International Personal Finance plc

§ Robin Ashton (Non-Executive Director) - Chairman of Leeds Building Society and Non-Executive Director of Shawbrook Bank Limited, former CEO of Provident Financial plc and London Scottish Bank plc, former Non-Executive Director of Albemarle & Bond Holdings PLC

§ Heather McGregor (Independent Non-Executive Director) - Managing Director of Taylor Bennett Limited

 

The Directors are committing approximately £1 million of capital to the Company in return for a combination of Ordinary Shares and founder shares which grant each holder the right to acquire Ordinary Shares in the Company subject to satisfaction of acquisition and performance criteria.

 

- Ends -



For more information

 

Non-Standard Finance plc

John van Kuffeler, Chairman

Nick Teunon, Chief Financial Officer & Company Secretary

c/o Bell Pottinger

 

+44 (0) 20 3772 2500

UBS Limited - Sole Bookrunner
Stephen Paine
Christopher Smith

 

+44 (0) 20 7567 8000

Peel Hunt LLP - Lead Manager

Adrian Haxby

Alastair Rae

Kathy Boate

 

+44 (0) 20 7418 8900

Beaumont Cornish Limited - Financial Adviser
Roland Cornish
Felicity Geidt

 

+44 (0)20 7628 3396

Bell Pottinger

Olly Scott

Will Bland

+44 (0) 20 3772 2500



Notes to editors

 

The Directors

 

John van Kuffeler, Chairman, aged 66

John was Chief Executive and then Chairman of Provident Financial plc, one of the UK's leading suppliers of personal credit products in the non-standard finance sector, for a combined total of 22 years until December 2013, during which period the company achieved a 44 fold return for shareholders. John was Chairman of Marlin Financial Group Limited, the consumer debt purchasing company, for four years until its sale in February 2014, during which period the company achieved an internal rate of return of 42 per cent for shareholders, and was also Chairman of Hyperion Insurance Group Limited for five years until December 2013, during which period the company achieved an internal rate of return of 22 per cent for shareholders. John was previously Chief Executive of Brown Shipley Holdings PLC which included Medens Trust Limited, a consumer car finance company, and was Chairman of the credit committee of Brown Shipley Holdings PLC's main banking subsidiary, Brown, Shipley & Co. Limited. John brings extensive knowledge of the non-standard finance sector and invaluable corporate governance oversight gained from his involvement with many listed and unlisted companies.

 

Nick Teunon, Finance Director, aged 48

Nick was Chief Financial Officer of Marlin Financial Group Limited from August 2013 until June 2014 where he worked with John van Kuffeler and Miles Cresswell-Turner. Prior to that, Nick spent five years as Chief Financial Officer of FTSE International, where he was part of the management team that grew the company's operations to an enterprise value of £900 million (based on the price paid by the London Stock Exchange Group to purchase the 50 per cent. interest held by the Financial Times). Nick also spent seven years as Group Finance & Strategy Director of the Press Association, where he worked with Charles Gregson. At both FTSE International and the Press Association, Nick was responsible for all mergers and acquisitions activity and related debt funding, in addition to leading the finance function. Nick has previous experience as finance director of a public company based on his time at Water Hall Group plc, where he led a rights issue and placing.

 

Miles Cresswell-Turner, Director, aged 52

Miles is a partner in Duke Street LLP who specialises in the finance sector and who led on the acquisitions by Duke Street LLP of Marlin Financial Group Limited, the consumer debt purchasing company, and UKWM Limited, the wealth manager. Before becoming a partner at Duke Street LLP, Miles was a partner at Palamon Capital Partners LLP from 1998 to 2008, where he led the investment in Towry Law plc. Prior to Palamon Capital Partners LLP, Miles spent seven years as a director in the Leveraged Finance Department of HSBC Investment Bank. During his time at Duke Street LLP and Palamon Capital Partners, Miles has achieved an internal rate of return of 39 per cent. across eight investments. Miles has considerable experience of building smaller entrepreneurial-led companies into larger, more successful businesses, a prime example being the sale by Duke Street LLP of Marlin Financial Group Limited, which provided investors with an internal rate of return of 42 per cent. Miles has extensive knowledge of the non-standard finance sector.

 

Charles Gregson, Non-Executive Director, aged 67

Charles is Chairman of ICAP Group Plc. Charles was Chairman of Wagon Finance Group Limited, a sizable motor finance group, from 1996 to 2006, Non-executive Director and Deputy Chairman of Provident Financial plc from 1998 to 2007 and Non-executive Director of International Personal Finance Plc from 2007 to 2010. Charles is a former Chairman of CPP Group Plc and of St James's Place Plc. He is also a Non-executive Director of Caledonia Investments Plc. Charles was Executive Director of United Business Media Plc (formerly MAI Plc) from 1985 to 2003 and Global CEO and Chairman of PR Newswire from 2003 to 2009. As part of his responsibilities at United Business Media Plc, Charles built Harlow Meyer Savage from a small money broking business into the international business of Garban PLC, a listed company with offices in 25 countries which later merged with ICAP Group Plc. Charles brings outstanding experience and expertise of the international financial markets and the UK non-standard consumer finance sector as well as the experience of building a small financial business into an international player.

 

Robin Ashton, Non-Executive Director, aged 57

Robin has been a Non-executive Director of Leeds Building Society since April 2011 and Chairman since March 2013. He is also a Non-executive Director of Shawbrook Bank Limited. Robin spent 24 years at Provident Financial plc, joining the Board in 1993 initially as Finance Director, then Deputy Chief Executive in 1999 and Chief Executive in 2001, leaving in early 2007 prior to the demerger of Provident's international business. During his tenure as Chief Executive he oversaw the expansion of Provident's international business into six countries and its progression from start-up loss to a substantial profitable business. He also initiated the startup, in 2003, and development of Vanquis Bank, now Provident Financial's most profitable business. Robin then spent 11 months as Chief Executive of London Scottish Bank plc liaising closely with the regulator and lending banks to restructure and attempt to recapitalise and sell the group. Following the demise of Lehman's, administrators were appointed in November 2008. He has also been Non-executive Chairman of Apple Holdco Limited, the original holding company for what is now Shawbrook Bank's secured lending business, and was a Non-executive Director of Albemarle & Bond Holdings PLC (A&B) for 13 months from October 2012 where he played a significant role trying to recapitalise the business. He resigned from A&B in November 2013 prior to the business being sold via an administration in March 2014. Robin has extensive experience of retail financial services both in the UK and internationally.

 

Heather McGregor, Independent Non-Executive Director, aged 52

Heather McGregor is the Managing Director and principal shareholder of the executive search firm Taylor Bennett, having bought the company from its founders in 2004. In her early career she worked in financial PR and investor relations before joining ABN Amro as a sellside analyst. She then spent eight years with the bank, working in London, Hong Kong, Singapore and Tokyo, before joining Taylor Bennett in 2000. She has an MBA from the London Business School and a PhD from the University of Hong Kong. Heather was the founder of the Taylor Bennett Foundation, which works to promote diversity in the communications industry. Heather is also the current chair of the charity Career Academies UK which works with 16-19 year olds to help them transition from education to employment, and is a founding member of the steering committee of the 30% Club, which is working to raise the representation of women at senior levels within the UK's publicly quoted companies. She is also an experienced writer and broadcaster in the national media.

 

Forward-looking statements

 

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms "targets", "believes", "estimates", "anticipates", "expects", "intends", "may", "will", "should" or, in each case, their negative or other variations or comparable terminology. They appear in a number of places throughout the announcement and include statements regarding the intentions, beliefs or current expectations of the Company and the Board of Directors concerning, among other things: (i) the Company's acquisition and financing strategies, target return, results of operations, financial condition, capital resources, prospects, capital appreciation and dividends; and (ii) future deal flow and implementation of active management strategies, including with regard to acquisitions.

 

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual performance, results of operations, financial condition, key performance indicators, distributions to shareholders, corporate profile and capital structure may differ materially from the forward-looking statements contained in this announcement. Factors that may give rise to these differences include, but are not limited to, the Company's ability to identify suitable acquisition opportunities, its success in completing one or more acquisitions, its ability to realise the benefits from its completed acquisitions; its ability to properly evaluate the merits and risks of the operations of acquired companies or businesses; its ability to deploy the net proceeds of the potential offering on a timely basis; the availability and cost of equity or debt capital for acquisitions; changes in the economic environment; and legislative and/or regulatory developments.

 

This announcement, and the information contained therein, is not for release, distribution or publication, directly or indirectly, to U.S. Persons or in or into the United States, Canada, Australia, Japan, New Zealand, South Africa or any other jurisdiction where applicable laws prohibit its release, distribution or publication. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this document comes must inform themselves about, and observe, any such restrictions. Any failure to comply with the restrictions may constitute a violation of the applicable securities laws.

 

The Ordinary Shares have not been and will not be registered under applicable securities laws of Australia, Canada, Japan, New Zealand or South Africa. Subject to certain exceptions, the Ordinary Shares may not be offered, sold, resold, transferred or distributed directly or indirectly, within, into or in Australia, Canada, Japan, New Zealand, South Africa or any other jurisdiction where such offer or sale would violate the relevant securities laws of such jurisdiction.

 

The Ordinary Shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"). The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act"). The Ordinary Shares cannot be offered, sold, pledged or otherwise transferred, directly or indirectly, in or into the United States or to, or for the account or benefit of, any U.S. Person (as defined in Regulation S of the U.S. Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act, and except to persons who are both "qualified institutional buyers" (as defined in Rule 144A under the U.S. Securities Act) and "qualified purchasers" (as defined in Section 2(a)(51) of the Investment Company Act). There will be no public offering of Ordinary Shares in the United States.

 

Each of the Company, UBS Limited, Peel Hunt LLP ("Peel Hunt"), Beaumont Cornish Limited ("Beaumont Cornish"), Bell Pottinger and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

 

No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change.

 

Each of UBS Limited, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, Peel Hunt, which is authorised and regulated by the Financial Conduct Authority, and Beaumont Cornish, which is authorised and regulated by the Financial Conduct Authority in the conduct of investment business, are acting exclusively for the Company and for no-one else in connection with the Placing and Admission and will not be responsible to anyone other than the Company for providing the protections afforded to customers of UBS Limited, Peel Hunt and Beaumont Cornish respectively or for providing advice in relation to the contents of this announcement, the Placing and Admission or any transaction, arrangement, or other matter referred to in this Document or any matter referred to in it.

 

None of UBS Limited, Peel Hunt and Beaumont Cornish makes any representation, express or implied, as to the contents of this announcement, for which the Company and the Directors are solely responsible.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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