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RNS Number : 3325X

CIP Merchant Capital Ltd

04 May 2021

4 May 2021

CIP MERCHANT CAPITAL LIMITED

("CIP" or the "Company")

Investment in Vertu Motors plc and Notice of Results

CIP is pleased to announce its investment in Vertu Motors plc (AIM:VTU) ("Vertu"), the new and used car dealership operating in the UK, quoted on AIM. The Company has acquired, in aggregate, 1,549,924 ordinary shares of 10p each in Vertu, representing approximately 0.42 per cent. of Vertu's issued share capital, for a total consideration of approximately GBP625,553.

For its financial year ended 29 February 2020, Vertu achieved revenue of GBP3.1 billion, a gross profit of GBP334.1 million, an operating profit of GBP16.5 million and a net profit attributable to its equity holders of GBP3.0 million. For the six months to 31 August 2020, Vertu achieved revenue of GBP1.1 billion, a gross profit of GBP129.5 million, an operating profit of GBP9.6 million and a net profit attributable to its equity holders of GBP2.5 million, and as at 31 August 2020, Vertu had cash and cash equivalents of GBP103.0 million and net assets of GBP265.8 million. Currently, Vertu has a market capitalisation of approximately GBP169.5 million.

The CIP Board notes the rapid development of enhanced omni-channel functionality in the selling of vehicles to private customers implemented by Vertu, which is at the forefront of the sector. The CIP Board believes that this transformation of its business model puts Vertu in a strong position to benefit from the UK economy's recovery phase. For this reason, whilst it is noted that Vertu operates outside of the core target investment sectors stated within the Company's investing policy, Vertu nevertheless meets a number of the Company's other key investment criteria in line with its investing policy and in the CIP Board's view represents a strong opportunity to create shareholder value in line with its strategic objectives.

Recommended Acquisition of Proactis Holdings plc

CIP also notes the announcement released on 30 April 2021 by Pollen Street Capital Limited in relation to a recommended acquisition by Cafe Bidco Limited for the entire issued and to be issued share capital of the Proactis Holdings plc ("Proactis") at a price of 75 pence per ordinary share in Proactis ("Offered Price"). As CIP holds 2,825,000 ordinary shares in Proactis at an average cost of 32.82p per share, the Offered Price represents a potential GBP1.25m profit, or a 128% return on capital.

Notice of Results

The Company notes that it expects to publish its final results for the year to 31 December 2020 by the end of May 2021.

For further information, please contact :

 
Merchant Capital Manager Limited (Investment Manager) 
 Wikus Van Schalkwyk                                    +44 1481 749363 
Strand Hanson Limited (Nominated Adviser and Broker) 
 James Bellman / Matthew Chandler / Ritchie Balmer      +44 20 7409 3494

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018.

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May 04, 2021 02:00 ET (06:00 GMT)

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