Vector Capital PLC
21 December 2020
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ANNOUNCEMENT.
This announcement is an advertisement and not an admission
document or a prospectus. This announcement is not and does not
constitute or form part of, and should not be construed as, an
offer of securities for subscription or sale in any jurisdiction
nor a solicitation of any offer to buy or subscribe for, any
securities 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, any contract or commitment whatsoever. This
announcement does not constitute a recommendation regarding any
securities. Prospective investors should not subscribe for or
purchase any securities referred to in this announcement except in
compliance with applicable securities laws and regulation and on
the basis of the information in the final admission document
("Admission Document") intended to be published by Vector Capital
plc ("Vector Capital" or the "Company"), and any supplement
thereto, in connection with the placing of ordinary shares of 0.5
penny each ("Ordinary Shares") and the proposed admission of the
entire issued and to be issued ordinary share capital of the
Company to trading on AIM, a market operated by the London Stock
Exchange plc .
Vector Capital plc
("Vector Capital", the "Company" or the "Group")
Intention to Float on AIM
GBP 3.1m Placing and proposed Admission to trading on AIM
Vector Capital plc, a commercial lending group that offers
secured loans primarily to businesses located in the United
Kingdom, announces its intention to seek admission of the entire
issued and to be issued ordinary share capital of the Company to
the AIM market of the London Stock Exchange plc ("Admission"), and
a conditional placing of 8,052,895 new Ordinary Shares, at a price
of 38 pence per share (the "Placing Price"), to raise gross
proceeds of GBP3.1 million (the "Placing").
Admission and commencement of dealings on AIM are expected to
take place at 8:00 a.m. on 29 December 2020, under the ticker VCAP.
Based on the Placing Price, the market capitalisation of the
Company will be GBP16.0 million on Admission. On Admission, the
Company will have 42,052,895 Ordinary Shares in issue.
The proceeds of the Placing will be used by the Company to
further grow its loan book and for general working capital
purposes.
Allenby Capital is acting as Nominated Adviser and Broker to the
Company.
Overview of Vector Capital
Vector Capital provides secured, business-to-business loans to
SMEs based in England and Wales. Loans are typically secured by a
first legal charge against real estate. The Company's customers
typically borrow for general working capital purposes, bridging
ahead of refinancing , land development and property acquisition .
The loans provided by the Company are generally for a 12-month term
with fixed interest rates of between 11 and 14 per cent.
The Company's loans to its borrowers are financed primarily from
a combination of its own resources and debt facilities. The debt
facilities are primarily provided by Shawbrook Bank totalling
GBP15.0 million and Aldermore Bank totalling GBP10.0 million . As
at 30 September 2020, the Company has a loan book of GBP34.7
million, with 61 live loans, an average loan size of approximately
GBP0.57 million and average loan to value ("LTV") of 49.9 per
cent.
Key Strengths
-- Experienced management team with extensive sector experience
The current management team has built up Vector Capital
organically and has been operating in the secured commercial
lending market for more than 20 years
-- Established industry network
The Company has an established industry network of wholesale
banks, commercial finance brokers, surveyors and advisers. It has
relationships with brokers who introduce Vector Capital to
potential borrowers that match the Group's lending criteria
-- Bespoke IT infrastructure
Vector Capital has a custom designed, cloud-based software
platform that provides audit trails, loan documentation,
relationship management and accounts interface
-- Speed of loan approvals
Vector Capital has the ability to make decisions in principle
and outline terms on a "same day" basis once brokers submit
proposals via the Company's online portal
-- Bespoke solutions
The Company has flexibility and ability to provide bespoke
solutions on a case-by-case basis
-- Strong risk management
It has effective credit and risk management controls,
demonstrated by the fact that Vector Capital has not written off a
principal debt
-- A track record of profit and cash generation
In the year ended 31 December 2019, Vector Capital generated
sales of GBP3.59 million and a profit before tax of GBP1.97
million. In the six months to 30 June 2020 the unaudited results
recorded sales of GBP2.13 million and a profit before tax of
GBP1.26 million
-- Current trading supported by market demand
Bridging loan books in the UK grew to GBP4.5 billion in 2019, an
increase of 19.7 per cent. compared to 2018(1) . Demand for Vector
Capital's new loans remains strong and, as at 30 September 2020, it
had loan pipelines totalling GBP3.4 million in aggregate
(1) The Association of Short Term Lenders, March 2020 (
https://www.theastl.org/index.php/13-news/260-bridging-loan-books-grow-by-nearly-20-in-2019)
Progressive Dividend Policy
The Company has a track record of paying dividends. The Company
paid a dividend of GBP699,000 in respect of the full year ended 31
December 2019 and in October 2020 declared and paid an interim
dividend of GBP400,000 in respect of the year ending 31 December
2020.
It is anticipated that the Company will pay a dividend
bi-annually, and that the first dividend post Admission will be the
final dividend for the current financial year ending 31 December
2020 and will be declared following publication of the annual
results.
Agam Jain, CEO of Vector Capital said:
"Our plans to bring Vector Capital to AIM are founded on a
strong track record of organic growth. We have been a trusted
lender by brokers for more than 20 years, due to our flexibility,
speed and integrity. The successful fundraising and admission to
AIM will enable us to increase our lending power and satisfy the
demand for fully secured business loans in the SME market, taking
the business to its next stage of growth. With a robust and
scalable IT infrastructure in place to facilitate an increasing
loan book, combined with our low overheads and agility, Vector
Capital is strongly placed to expand, deliver on its strategy and
provide returns to shareholders."
Further enquiries:
Vector Capital plc
Agam Jain c/o TB Cardew
Allenby Capital Limited
James Reeve (Corporate Finance) +44 (0) 20 3328 5656
Tony Quirke (Sales) www.allenbycapital.com
TB Cardew
Shan Shan Willenbrock/ + 44 (0)7775 848537
Charlotte Anderson + 44 (0)20 7930 0777
vector@tbcardew.com
Strategy
The Company's strategy is to continue working with selected
commercial finance brokers and concentrate on the provision of
short-term unregulated loans of the same nature as its existing
loan book. The Directors consider that Vector Capital is the lender
of choice for borrowers who need fast decisions and quick
turnarounds to secure loans of the nature of those provided by the
Company.
The Directors consider there to be sufficient demand for loans
from UK borrowers that fit within Vector Capital's existing lending
criteria to meet the Directors' growth expectations, without the
need for the Company to materially alter the types of loans it
offers.
To achieve its objective of consistent growth, the Company will
seek to gradually increase its lending capital through the
extension of its debt facilities from wholesale banks and take
advantage of the capital markets in order to raise further capital
as required.
Use of Proceeds and Reasons for Admission
Reasons for Admission
-- Allow Vector Capital access to equity capital in a cost
effective and timely manner in order to provide the Company with
the financial flexibility to further increase its lending capacity
and satisfy the demand for loans as provided by the Company ;
-- help the Company to attract and retain high-quality staff;
-- enhance the credentials of the Company with existing and
potential customers, introducers and lenders; and
-- help to raise the Company's profile in the UK
Use of proceeds
The net proceeds of the Placing are expected to total
approximately GBP2.6 million. The Directors intend to use these
funds as follows:
-- balance sheet lending; and
-- general working capital.
Initially, the net Placing proceeds will be used to increase the
loan book directly. Once the loans have been issued the Group has
the option to drawdown amounts from the banks against the facility
to increase the loan book further. The Directors further believe
that the stronger balance sheet as a result of the Placing will
increase the Company's prospects of increasing its banking
facilities, to further increase the Group's lending capacity.
The Board
Robin Stevens, Chairman
Robin is a Chartered Accountant and a former corporate finance
partner and Head of Capital Markets of Crowe UK LLP, having held
senior corporate finance and audit partner positions with Mazars
LLP and MRI Moores Rowland LLP. Having retired as a partner he is
now a Senior Advisor to Crowe and also provides consulting and
advisory services to emerging companies operating in the UK and
overseas. Robin has had an extensive career in corporate finance
including corporate advisory and reporting assignments, raising
capital, management buyouts, capital reconstructions, and
pre-flotation planning. He has also advised on acquisitions and
disposals by public and private companies as well as many IPOs and
secondary offerings in the UK and overseas. Robin has specialised
in working with international companies and regularly speaks on a
range of corporate finance and capital markets issues to
international business audiences.
Agam Jain, Chief Executive Officer
Founder of the Company , Agam took his previous IT company,
Jayex Healthcare, to IPO on the Australian Stock Exchange in 2015.
Agam is responsible for the strategic management of the Group. He
leads the management team of the Group with the aim of meeting the
objectives of the business in growing the loan book in accordance
with the Group's credit policy, with a view to delivering
consistent returns for investors and managing relationships with
stakeholders. In addition to his knowledge of and experience in the
loan industry generally, Agam has general management and
business-process experience and is familiar with several major
software and accounting systems, such as Oracle NetSuite, ERP, CRM
and Sage. Agam has been building the secured finance business now
operated by the Group for over twenty years. He is a graduate of
Imperial and Kings Colleges in Physics and Management Science.
Jonathan Pugsley, Finance Director
Jon is a Chartered Certified Accountant by profession, holding a
practicing certificate since 2007. Having worked in private
practice for ten years, he founded Allazo Accounting &
Consultancy in 2012, with two offices located in Hertfordshire. He
has been invited to act as finance director for a number of
clients. His focus is on helping his clients grow through
implementing better systems and structures and ensuring a greater
understanding of their finances. Jon has provided hands on
accounting support to the Group and is a director of each Group
company. He oversees the finance responsibility and interfaces with
the external auditors.
Ross Andrews, Non-Executive Director
Ross is an experienced corporate adviser with 30 years'
investment banking and stockbroking experience, advising companies
and management teams on public market transactions. He was a main
board director of Zeus Capital during which time the firm grew from
a small corporate finance advisory business in the North West of
England to an established investment banking operation based in
London, Manchester and Birmingham. He is a non-executive director
of several listed companies and brings extensive financial,
commercial and corporate governance experience to the Board. Most
recently, he established Guild Financial Advisory Limited, an
independent corporate finance boutique focused on advising fast
growing companies (both private and listed).
Important Information
This announcement 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.
Recipients of this announcement who are considering subscribing
for or acquiring Ordinary Shares following publication of the
Admission Document are reminded that any such acquisition or
subscription must be made only on the basis of the information
contained in the final Admission Document, which may be different
from the information contained in this announcement. No reliance
may be placed, for any purpose whatsoever, on the information or
opinions contained in this announcement or on its 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 or Allenby Capital, 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
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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 or opinions 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.
Allenby Capital is acting exclusively for the Company and no one
else in connection with the Placing and Admission referred to
herein. Allenby Capital will not regard any other person as its
client in relation to the Placing and Admission referred to herein,
and will not be responsible to anyone other than the Company for
providing the protections afforded to their clients or for giving
advice in relation to the Placing and Admission or any transaction
or arrangement referred to herein.
This announcement is only addressed to, and directed at, persons
in member states of the European Economic Area who are qualified
investors within the meaning of Article 2(e) of the Prospectus
Regulation (EU 2017/1129) ("Qualified Investors"). In addition, in
the United Kingdom, this announcement is addressed to and directed
only at Qualified Investors who are: (i) persons having
professional experience in matters relating to investments, i.e.,
investment professionals within the meaning of Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005 (the "FPO"); (ii) high net-worth companies, unincorporated
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The Ordinary Shares have not been and will not be registered
under the US Securities Act of 1933, as amended, and may not be
offered or sold in the United States, except pursuant to an
applicable exemption from registration. No public offering of
securities is being made in the United States. No securities
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the merits of the securities offered hereunder and any
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relation to the proposed placing of the Ordinary Shares has been,
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Finance. Accordingly, subject to certain exceptions, the Ordinary
Shares may not be, directly or indirectly, offered, sold, taken up,
delivered or transferred in or into or from a restricted
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jurisdiction.
The date of Admission may be influenced by factors such as
market conditions. There is no guarantee that the Admission
Document will be published or that the Placing and Admission will
occur, and you should not base your financial decisions on the
Company's intentions in relation to the Placing and Admission at
this stage. Acquiring investments to which this announcement
relates may expose an investor to a significant risk of losing all
of the amount invested. The value of shares can decrease as well as
increase. This announcement does not constitute a recommendation
concerning the Placing. Persons considering an investment in such
investments should consult an authorised person specialising in
advising on such investments.
This announcement contains certain statements that are, or may
be, forward looking statements with respect to the financial
condition, results of operations, business achievements and/or
investment strategy of the Company. Such forward looking statements
are based on the Company's board of directors (the "Board")
expectations of external conditions and events, current business
strategy, plans and the other objectives of management for future
operations, and estimates and projections of the Group's financial
performance. Though the Board believes these expectations to be
reasonable at the date of this announcement they may prove to be
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in which the Group operates, to be materially different from any
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December 21, 2020 02:00 ET (07:00 GMT)
