This announcement contains certain inside information for the
purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of
MAR.
WH Ireland Group
Plc
("WH Ireland" or the
"Company"
and with its subsidiaries the
"Group")
Conditional Sale of the
Capital Markets Division
Trading
Update
Further to the Company's
announcement of 20 May 2024, WH Ireland (AIM: WHI) is pleased to
confirm that its wholly owned subsidiary, WH Ireland Limited, has
conditionally agreed to sell the business and certain assets of its
Capital Markets Division to Zeus Capital Limited ("Zeus"), for a total consideration of up
to £5 million (the "Transaction"). Subject to the
satisfaction of certain conditions, as detailed below, it is
anticipated that completion of the Transaction will occur by
mid-July 2024 at the latest.
Highlights
· Sale of the Capital Markets
Division, in line with the Company's strategic
objectives
· Total consideration of up to
£5 million
· Continuing Wealth Management
Division well positioned to take advantage of a recovery in
markets
Background to and reasons for the
Transaction
As set out in the Company's interim
results announcement on 27 December 2023, the Board of WH Ireland
has been focused on returning the business to sustainable
profitability, with an emphasis on restoring growth in revenue in
both the Capital Markets Division and its Wealth Management
Division, alongside continued cost discipline. The Directors
had also committed to assess all strategic opportunities for WH
Ireland, as they arose. The Directors believe that the sale of the
Capital Markets Division will help to satisfy these objectives by
immediately reducing the liabilities, as well as the working and
regulatory capital requirements of the Group, while also increasing
potential cash inflows if and when the deferred consideration is
paid, shortly following the first anniversary of completion of the
Transaction.
The Directors are encouraged by the
opportunities that the Transaction will provide to the existing
employees and clients of the Capital Markets Division. Following
completion of the Transaction, the combined business of Zeus
Capital Limited and the WH Ireland Capital Markets Division (which
will be known as Zeus Capital Limited), is anticipated to have over
125 retained corporate clients, a significantly enlarged trading
platform, making markets in up to 200 stocks with broad
institutional reach and approximately 90 employees. This is
expected to make it the second largest Nominated Adviser and Broker
for AIM companies with offices in London, Manchester, Leeds,
Bristol and Edinburgh.
Trading Update
As set out in the Company's interim
results announcement of 27 December 2023, market conditions have
continued to be challenging, especially for brokers specialising in
AIM companies, although the Directors remain focused on operational
efficiencies to ensure that the Group is well positioned for a
recovery in the markets. The Directors believe that the combination
of improving market conditions, the benefits of the cost reduction
programme and the sale of the Capital Markets Division announced
today will, should the recent market improvements continue, enhance
the prospects for the WH Ireland Wealth Management Division.
The Directors will also continue to assess strategic opportunities
for the Group if, and when, they arise.
Assets under management in the
Wealth Management Division at the 31 March 2024 was £1.2 billion
(30 September 2023: £1.2 billion; 31 March 2023:
£1.4 billion).
Cash at the end of April 2024 was
£5.8 million. (30 September 2023: £6.9 million; 31
March 2023: £4.2 million).
Details of the Transaction
As set out above, WH Ireland has
conditionally agreed to the sale of its Capital Markets Division to
Zeus Capital Limited for a total consideration of up to £5 million.
The key assets being acquired include the corporate client
contracts of the Capital Markets Division, the employees, the key
supplier contracts, the Leeds and Bristol leasehold premises, and
the transfer of High Net Worth clients together with their
Execution Only Custody Accounts valued at approximately
£600m.
Completion of the Transaction is
conditional on certain limited conditions precedent that are
typical of a transaction of this nature, including the novation of
certain key supplier agreements and obtaining certain landlord
consents. It is currently anticipated that Completion will occur by
mid-July 2024 at the latest ("Completion").
The consideration comprises an
initial cash payment of £1 payable on Completion; and up to
£4,999,999 of deferred consideration. The deferred consideration is
to be paid in cash within 30 days of the first anniversary of
Completion and is to be calculated by reference to the retainer and
transaction revenue generated by the Capital Markets Division
within the 12 months after Completion.
Information for Clients of WH Ireland Capital
Markets
Clients of WH Ireland Capital
Markets can be reassured that there should be no change to the
client service teams or the existing terms and conditions
(including fees) following the transfer to Zeus. Corporate clients
who have appointed WH Ireland as its Nominated Adviser should also
note that as WH Ireland's Capital Markets Division is being
integrated into Zeus, the transfer process for those clients
appointing Zeus is expected to be simple and straightforward for
all clients. A representative from WH Ireland will be in contact to
explain the transfer process shortly.
Information for Employees and Clients of WH Ireland Wealth
Management Division
There will be no change to the
ongoing operations of the Wealth Management Division, which the
Directors believe will be well positioned to take advantage of
improving market conditions, as a result of the Group's cost
reduction programme and the sale of the Capital Markets Division
announced today.
Additional Disclosures
As at 30 September 2023, the Capital
Markets Division had gross assets of £4.96 million (unaudited); and
for the year ended 31 March 2023 the Capital Markets Division
generated revenues of £12.25 million and a loss before tax of £2.48
million (audited).
It is intended that the proceeds
from the forthcoming sale of the Capital Markets Division will be
applied to general working capital for the Group.
Phillip Wale, Chief Executive of WH Ireland commenting on the
transaction, said:
"We are delighted to have agreed this transaction, which
secures a good outcome for the Group and the Capital Markets
Division, and is in line with our strategy to review strategic
opportunities as they arise. We believe the combined business of
Zeus Capital Limited and the WHI Capital Markets Division will
represent a significantly enhanced platform for clients and
employees, enabling them to manage the current market challenges
and take advantage of a recovery in corporate activity from a
position of strength as a leading independent investment bank in
the UK."
For further information please
contact: