TIDMELTA
RNS Number : 8137I
Electra Private Equity PLC
17 August 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION.
Electra Private Equity PLC
Update on realisation strategy and Hotter Shoes trading
17(th) August 2021
Electra Private Equity PLC ("Electra") reaffirms that, having
explored other possibilities, the Board is confident that the value
creation opportunity arising from both the demerger of Electra's
hospitality brands through a new parent company Hostmore plc
("Hostmore") and the subsequent transition of Electra to AIM as the
parent company of Hotter Shoes ('Hotter') is the most attractive
route to create both short and longer term shareholder value. The
Board believes that its strategy of two separate listings
significantly outweigh the opportunity to realise cash now, or to
maintain the status quo.
The proposed demerger of Hostmore marks the penultimate stage of
the implementation of the Electra strategy that has delivered the
return of over GBP2bn to shareholders since 2016. On completion of
the demerger of Hostmore, Electra's sole remaining corporate
investment will be Hotter.
In completing the delivery of our strategy, Electra shareholders
will receive shares in Hostmore and will retain their shares in
Electra (renamed as outlined below) on AIM.
Preparations for the demerger of Hostmore are proceeding well
and further announcements will follow shortly.
Proposed rename of Electra to Unbound Group PLC when it
transitions to AIM as parent company for Hotter Shoes late this
calendar year
Having been transformed from a retail to a multi-channel
business with a strong and growing digital focus over the last 2
years, Hotter is now a fast growing, profitable and cash generative
e-commerce focused footwear brand. Hotter provides footwear with
uncompromising focus on comfort and fit through the use of
differentiating technology, to a targeted demographic that values
its brand and products.
Hotter's direct to consumer channels now reach 29% of the female
population in the UK over the age of 55 - providing them with
footwear that allows them to do more of what they love.
Cultural and demographic shifts now provide an opportunity to
further monetise the existing Hotter customer database and to grow
it through the addition of similarly themed products beyond
footwear.
The over 55 demographic is a materially underserved online
audience with the characteristics of:
-- Rapidly increasing digital literacy - now generating over 30%
of overall internet participation
-- Long term structural growth, significantly in excess of growth in younger demographics
-- Focus on health, wellbeing, leisure and recreation with a
more acute need for comfort over performance
-- High concentration of UK wealth in the demographic results in
focus for product selection being on value rather than price
Based on the foundations of Hotter as a trusted brand with
market-leading digital infrastructure and strong customer
personalisation through data insight, Unbound will provide a
marketplace delivering a range of products and services that
support the wellbeing and active lifestyles of our chosen customer
community. Unbound's expanded offering beyond footwear will feature
apparel and wellness brands alongside third party complementary
brands.
Subject to the Hostmore demerger completing, Electra intends to
seek shareholder approval to rename Electra as Unbound Group PLC
("Unbound") and to move its listing to AIM. Unbound will be the
parent company of Hotter and the foundation of a fast growing
e-commerce business serving and enhancing the lifestyles, health
and wellbeing of our targeted customer community. We anticipate
that Unbound will offer its first products beyond footwear from H1
2022.
A Capital Markets Day focused on Unbound will be held on 15(th)
September, further details of which will be confirmed in due
course.
As part of the transition to Unbound, Hotter has appointed Dan
Lampard as the new Chief Financial Officer, effective from 30(th)
August 2021. Dan has performed a number of different financial and
commercial roles, most recently as CFO Glanbia Performance
Nutritions. Dan's broad and relevant commercial experience will
further enhance a management team with strong capabilities and
expertise in e-commerce, product development, brand strategy and
customer experience.
Hotter Shoes trading update
In the first 6 months of its financial year to January 2022
Hotter's UK Direct to Consumer sales have grown 39% on the
comparable period in 2020.
In the same period overall sales growth has been 25%. Reflecting
real progress in realising the benefits of Hotter's strategy,
overall Gross Margin over the 6 month period was 63%, up from 53%
in the same period in 2020 and over the same period fixed costs
have reduced by 34% YOY.
Ian Watson, Chief Executive Officer of Hotter, commented:
"We are delighted with the progress we are making and welcome
Dan to our team at this important time for the business. His track
record of success in on-line, direct-to-consumer retail businesses
will help drive our transformation as we work towards our listing
on AIM and focus on delivering growth across our platform."
Neil Johnson, Chair of Electra, commented:
"It is an absolute priority for the Electra Board that, having
already successfully delivered significant value for shareholders
in our realisation strategy, the value realised for our final two
investments should also exceed expectations.
Whilst we can't determine the value that the market will ascribe
to Hostmore and Unbound, what we can say is that we are delighted
to be planning for both companies to embark on their separate
journeys as independent listed companies with the management,
strategy and financial position to deliver real value growth in
both the short and longer terms.
Both businesses have the opportunity to become leaders in their
chosen markets and we have every confidence that the management
teams that are in place can deliver their plans - and with them
significant shareholder value."
Enquiries
Gavin Manson, Chief Financial and Operating Officer, Electra Private Equity PLC 020 3874 8300
John Sunnucks, Sofia Newitt, Vico Partners Limited 020 3957
5045
Notes to Editors
Electra Private Equity PLC
Electra is a private equity investment trust which has been
listed on the London Stock Exchange since 1976. Electra's
investment objective is to follow a realisation strategy, which
aims to crystallise value for shareholders, through balancing the
timing of returning cash to shareholders with maximisation of
value. The Board has decided that the optimal outcome for
shareholders, and for further significant longer term value
creation, is likely to be to list Electra's two largest remaining
portfolio assets, Fridays and Hotter Shoes on the LSE's Main Market
and AIM, respectively (by way of a demerger of Hostmore and, in the
case of Hotter, through reclassification of Electra's listing
subsequent to the demerger of Hostmore). Since 1st October 2016,
Electra has distributed over GBP2.1 billion to shareholders through
ordinary dividends, special dividends and share buybacks.
Further Information
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This communication is not for publication or distribution,
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This communication is directed only at persons who: (i) are
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The contents of this announcement have been prepared by and are
the sole responsibility of Electra .
This announcement is being made for information purposes only in
connection with the proposed demerger by Electra of Hostmore and
the admission of the entire issued and to be issued share capital
of Hostmore to the Official List of the Financial Conduct Authority
and to trading on the main market for listed securities of the
London Stock Exchange plc ("Admission") and the reclassification of
Electra's listing subsequent to the demerger of Hostmore and does
not purport to be full or complete.
This announcement does not constitute an offer or invitation to
sell or issue, or a solicitation of an offer or invitation to
purchase 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
therefor.
This announcement may not be relied upon for the purpose of
entering into any transaction and should not be construed as, nor
be relied on in connection with, any offer, invitation or
inducement to purchase or subscribe for, or otherwise acquire, hold
or dispose of any securities of Electra and/or Hostmore and shall
not be regarded as a recommendation in relation to any such
transaction whatsoever.
HSBC Bank plc ("HSBC"), which is authorised by the Prudential
Regulation Authority (the "PRA") and regulated in the UK by the
Financial Conduct Authority (the "FCA") and the PRA, and Numis
Securities Limited ("Numis"), which is authorised and regulated in
the UK by the FCA, are acting as financial advisers exclusively for
Electra and Numis is acting exclusively as sponsor for Hostmore and
in each case for no one else in connection with the demerger,
Admission or any other matters described in this announcement and
will not regard any other person as a client in connection with the
demerger, Admission or any other matters described in this
announcement or be responsible to anyone other than Electra and
Hostmore for providing the protections afforded to clients of HSBC
or Numis (as applicable) nor for providing advice in connection
with the demerger, Admission, or any other matters referred to in
this announcement. Apart from the responsibilities and liabilities,
if any, which may be imposed on HSBC or Numis by the Financial
Services and Markets Act 2000 or the regulatory regime established
thereunder, neither HSBC or Numis nor any of their respective
affiliates, directors, officers or employees owes or accepts any
duty, liability or responsibility whatsoever (whether direct or
indirect, consequential, whether in contract, in tort, in delict,
under statute or otherwise) to any person who is not a client of
HSBC or Numis (as applicable) for the contents of this announcement
or its accuracy, completeness or verification or for any other
statement made or purported to be made by it, or on its behalf, or
by any other person(s) in connection with the demerger, Admission,
this announcement, any statement contained herein, or
otherwise.
Stifel Nicolaus Europe Limited ("Stifel") which is authorised
and regulated in the UK by the FCA, is acting as financial adviser
and nominated adviser exclusively for Electra in connection with
the proposed move of its listing to AIM following the demerger of
Hostmore (the "Listing Move") and for no one else in connection
with the Listing Move or any other matters described in this
announcement and will not regard any other person as a client in
connection with the Listing Move or any other matters described in
this announcement or be responsible to anyone other than Electra
for providing the protections afforded to clients of Stifel nor for
providing advice in connection with the Listing Move or any other
matters referred to in this announcement. Apart from the
responsibilities and liabilities, if any, which may be imposed on
Stifel by the Financial Services and Markets Act 2000 or the
regulatory regime established thereunder, neither Stifel nor any of
its affiliates, directors, officers or employees owes or accepts
any duty, liability or responsibility whatsoever (whether direct or
indirect, consequential, whether in contract, in tort, in delict,
under statute or otherwise) to any person who is not a client of
Stifle for the contents of this announcement or its accuracy,
completeness or verification or for any other statement made or
purported to be made by it, or on its behalf, or by any other
person(s) in connection with the Listing Move, this announcement,
any statement contained herein, or otherwise.
Certain statements made in this announcement are forward-looking
statements and by their nature, all such forward-looking statements
involve risk and uncertainty. Forward-looking statements include
all matters that are not historical facts and often use words such
as "expects", "may", "will", "could", "should", "intends", "plans",
"predicts", "envisages" or "anticipates" or other words of similar
meaning. These forward-looking statements are based on current
beliefs and expectations based on information that is known to
Electra at the date of this announcement. Actual results of the
Electra Group (being Electra and its subsidiary undertakings from
time to time), and/or their respective industries may differ from
those expressed or implied in the forward-looking statements as a
result of any number of known and unknown risks, uncertainties and
other factors, including, but not limited to, the effects of the
COVID-19 pandemic and uncertainties about its impact and duration,
many of which are difficult to predict and are generally beyond the
control of Electra. Persons receiving this announcement should not
place undue reliance on any forward-looking statements. Unless
otherwise required by applicable law or regulation Electra and its
advisers (including HSBC, Numis and Stifel) disclaims any
obligation or undertaking to update or revise any forward-looking
statements, whether as a result of new information, future events
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