Prior to publication, the
information contained within this announcement was deemed by the
Company to constitute inside information as stipulated under the UK
Market Abuse Regulation. With the publication of this announcement,
this information is now considered to be in the public
domain.
18
September 2024
Software Circle
plc
("Software Circle", the
"Company" or the "Group")
Board Changes and Trading
Update
Jan Mohr, the Chairman of Software
Circle plc (AIM: SFT), will advise shareholders at the Annual
General Meeting (AGM) to be held at 10.00am in Manchester today
that, immediately following the meeting, the following changes will
be made to the Group's Board:
- As previously announced, Jan Mohr will resign as
Chairman.
- Conrad Bona will step down as Non-Executive Director given his
length of service on the board.
- Matthias Riechert, presently Non-Executive Director, will
become the Company's Chairman.
- Simon Barrell, presently Non-Executive Director, will become
the Company's Senior Independent Director.
- Brad Ormsby will join the Board as an independent
Non-Executive Director.
- Marc
Maurer will join the Board as a Non-Executive Director and the
designated representative of the Company's largest shareholder,
CHAPTERS Group
AG.
Brad Ormsby is CFO of Judges
Scientific plc, an AIM listed buy and build manufacturing group
which has grown from a market cap of £80m to £700m during the nine
years Brad has been with the company. Brad has extensive M&A
experience including multiple acquisitions at Judges Scientific plc
and several international transactions at Eurovestech, a technology
venture capital fund. He also led the IPO onto AIM of Kalibrate Technologies, an
international software business. He is also a Non-Executive
Director of Octopus AIM VCT 2 plc, a FTSE quoted investment
fund.
Marc Maurer is COO of
CHAPTERS Group, the
Company's largest shareholder. Marc previously worked at
Constellation Software and Hg Capital & TA Associates backed
Revalize. Marc oversees all operational leadership of VMS companies
within CHAPTERS.
Gavin Cockerill, CEO said:
"We are immensely grateful to Jan and
Conrad for their invaluable contributions and leadership over the
years. They have both been instrumental in guiding the Company
through significant change and strategic milestones.
We will miss Jan's vision, notorious
German directness and surprising penchant for a fish and chip
supper. Maybe there'll be more menu options at future board
get-togethers as Matthias takes on the Chairman's role.
Conrad's fair minded, well rounded
approach and sartorial flair added a certain style to Board
meetings that we will find difficult to replace. Of course, we look
forward to seeing both Jan and Conrad regularly at future
shareholder meetings.
As we welcome Brad and Marc to the
Board, we are excited about the wealth of talent, experience and
fresh perspectives they bring to our newly configured NED squad.
Brad's extensive expertise in finance, M&A and the AIM market,
combined with Marc's operational leadership at CHAPTERS, will
undoubtedly strengthen our strategic direction as we continue our
aim to become a growing serial acquirer of VMS
businesses.
We're delighted also that Matthias,
who has been an integral part in helping to reshape the Group to
date, will take the Chairman's 'arm-band'."
Jan
Mohr, Chairman commented:
"I could not be prouder of what the
Software Circle team has achieved over the last few years. It was a
true honour serving as Chairman throughout this transformation.
Throughout this time, I could not ask for better NED colleagues.
With Conrad leaving at the end of his tenure, I would like to
express my gratitude for his calm, wise and considerate role in the
boardroom. For the next chapter of growth, Software Circle will
rely on Matthias, Simon, Brad and Marc as NEDs. I could not think
of a better team combining capital allocation, VMS operations and
public company expertise."
Matthias Riechert, said: "I'm
delighted to become the new Chairman of Software Circle. I've
enjoyed working with the team and am very happy about what we've
achieved so far. I'm excited to help continue our goal of creating
shareholder value with a focus on growing Operating Cash Flow Per
Share."
Conrad Bona, Non-Executive
Director commented:
"I've very much enjoyed my time with the Group and the team.
We've seen it through some key transitions over the years and
although I'm stepping away from the board, I'll be watching the
Company's growth with keen interest and excitement as a
shareholder."
Brad Ormsby, said: "After
contributing to the growth of a leading serial acquirer, I'm
looking forward to bringing that
experience to Software Circle. I'm excited about joining the
Group at this stage of its journey, and I'm eager
to see what we can accomplish together in the years
ahead."
Marc Maurer, commented:
"Looking across the various VMS platforms CHAPTERS is
invested in and based on my previous experience with other serial
acquirers of VMS companies, I'm fascinated about the Software
Circle team's level of discipline in regard to M&A and
operations. It's a great honour for me to contribute to the next
stage of Software Circle's growth."
Trading Update and Outlook
Our new financial year began in
April, since then we've added two further acquisitions to the
Group. Be The Brand Experience Limited
("Bethebrand") at the end of May and Link Maker
Systems Limited ("Link Maker") in July.
I'm pleased to report that trading
continues to align with our internal forecasts. The performance of
our newly acquired business units remains encouraging, meeting our
expectations and reinforcing the strength of our strategic
direction.
Although we expect revenue
for our Nettl Systems business to be less
compared to last year. Its new revenue
mix and focus on profitability means we expect
significant improvements on that front.
The new acquisitions we've added to
the Group, Arc Technology Limited ("Arc")
in February which will contribute for a full year, plus
Bethebrand and Link Maker, collectively bring an
expected additional annualised £4.2m of sales and £1.5m of
Operating EBITDA1. With these additions and the
organic growth we've driven so far, on a run-rate
basis, our annualised sales would be approximately £20m. A 20%
increase on last year. An Adjusted EBITDA2
above 15% of sales, is a realistic target.
We therefore remain cautiously optimistic about the upcoming
year.
Having added three acquisitions
since February 2024, we're well on the way to deploying the capital
we raised in September 2023.
Assuming a similar profile of
businesses coming into the Group, the deployment of the currently
available capital would take us to annualised sales of
approximately £25m at an Adjusted EBITDA closer to 20%.
We intend to deploy this capital.
Focussing on quality, irrespective of pace. Our strategy remains
focused on identifying and acquiring businesses that align with our
criteria. Further strengthening our portfolio and driving
sustainable growth. We are committed to maintaining our disciplined
approach to acquisitions and operational excellence, ensuring that
each addition is aligned with our culture, enhances our overall
value proposition, supports our long-term objectives and maximises
operating cash flow per share.
As announced in our final results
for the year ended 31 March 2024 on 24 July, the Group intends to restructure its balance sheet and finance
the redemption of the remaining £6.7m of bonds at par. This will
enhance the Group's ability to access additional and ongoing
institutional debt funding to provide capital for M&A
opportunities in the future. We are evaluating a number of options
and will provide an update in due course.
1 Operating EBITDA = Adjusted EBITDA before central group
administration costs
2 Adjusted EBITDA = EBITDA before impairments, exceptional costs,
acquisition related costs and the capitalisation of qualifying
development costs
For
further information:
Software Circle plc
Gavin Cockerill (CEO)
07968 510 662
Allenby Capital Limited (Nominated Adviser and
broker)
0203 328 5656
David Hart / Piers Shimwell
(Corporate Finance)
Stefano Aquilino / Joscelin
Pinnington (Sales and Corporate Broking)
Notes to editors:
Software Circle plc is a UK based
acquirer of vertical market software businesses. Our aim is to help
founders find the right exit strategy, without fuss or drama.
Continuing operations in an independent, decentralised way. Keeping
the entrepreneurial spirit and culture that exists in the
businesses we acquire. Providing a permanent home for their teams,
management talent and culture. For more information visit
www.softwarecircle.com.
