PLC News 2012
01 February 2012
Placing and Trading Update
Westhouse Holdings PLC ("Westhouse" or the "Group") (LSE: WHL), the corporate and institutional stockbroking group, announces a placing of 6,077,900 ordinary shares of 0.005p each ("Ordinary Shares") at a price of 40p per share, to raise £2.4 million (the "Placing").
The Placing, which was oversubscribed, is being supported by a combination of existing investors and new investors as well as directors of Westhouse ("Directors") and employees.
Application has been made for the new Ordinary Shares to be admitted to trading on AIM and dealings are expected to commence on 6 February 2012.
Background to and Reasons for the Placing
In November 2011 Westhouse announced the acquisition of Arbuthnot Securities Limited ("Arbuthnot"), completing the transaction on 20 January 2012 following the receipt of FSA consent. The acquisition of Arbuthnot has provided Westhouse with the opportunity to increase the size of the business, improve its visibility and win new clients, all with a much improved ratio of cost to recurring revenues.
Following the integration of Arbuthnot, the Placing will strengthen the balance sheet and put the Group in a position to continue to take advantage of opportunities from consolidation of the corporate broking sector and provide greater flexibility in trading.
Westhouse Securities has:
- around 90 corporate clients (of which 60 are AIM Nomad relationships, putting the company in the top tier by client numbers);
- an enhanced commission stream;
- a broad research coverage of nine sectors as well as macro strategy;
- a strong sales and trading division;
- a very competitive cost base; and
- a strong executive and non-executive management team.
Related Party Transactions and Directors' Interests
Garth Milne, Jonathan Azis, Andrew Beeson and Nicholas Bull, who are all directors of Westhouse, are subscribing for Ordinary Shares in the Placing, their holdings are set out below.
Standard Bank Jersey Limited, a holder of approximately 14% of Westhouse shares prior to the Placing is subscribing for a further 1,519,123 Ordinary Shares in the Placing.
The issue of Ordinary Shares to the directors and to Standard Bank Jersey Limited are considered related party transactions pursuant to the AIM Rules.
The Directors (and in the case of the directors' subscriptions, the non-subscribing directors only), having consulted with the Company's nominated adviser, Smith & Williamson Corporate Finance Limited, consider that the subscriptions for Ordinary Shares by the related parties are fair and reasonable insofar as the shareholders of the Company are concerned.
Following completion of the Placing, the interests in the Ordinary Shares of the Directors who are participating will be:
|Shares subscribed for in the Placing||Resulting holding||% of the enlarged issued share capital|
Issued Share Capital and Total Voting Rights
Following the issue of the new Ordinary Shares, the Company's capital will consist of 19,483,835 Ordinary Shares with effect from 6 February 2012. No Ordinary Shares are held in treasury.
The total number of voting rights in the Company will be 19,483,835. The voting rights on all these shares are identical. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FSA's Disclosure and Transparency Rules.
Trading Update and Outlook
Market conditions were very challenging in the latter part of 2011 and several significant transactions failed to materialise. As a result, and despite revenues which increased by over 30% during 2011 relative to 2010, the Directors expect to announce a loss before tax for the year ended 31 December 2011 substantially greater than in the previous financial year.
The Group continues to have a good rate of enquiries, the conversion of which to revenue is often market dependent. The enlarged business is fully focused on growing its activities by supporting the existing client base and winning attractive new business mandates. Nevertheless, given market conditions the Directors are taking a cautious approach to the first half year's revenues
Garth Milne, Chairman, commented:
"The reaction of clients, intermediaries and our peers to the acquisition has been very favourable. We now have a significantly enhanced sales and trading business, a materially stronger research product and a larger and more diversified corporate client base. We are optimistic about our market position and our ability to grow our market share.
"The support for the Placing from existing and new investors is a solid endorsement of our strategy."
|Westhouse Holdings PLC|
|Christopher Getley, Chief Executive||Tel: +44 (0) 20 7601 6103|
|Smith & Williamson Corporate Finance Limited|
|Azhic Basirov / David Jones||Tel: +44 (0) 20 7131 4000|
|Tim Grey||Tel: +44 (0) 20 7520 9455|
Notes to editors
Westhouse Securities is authorised and regulated by the FSA, is a member of the London Stock Exchange, a NOMAD for AIM listed companies and a Sponsor of Official List companies.
Following the completion of the acquisition of Arbuthnot Securities Limited the business of Westhouse Securities Limited has been transferred to Arbuthnot Securities Limited. Simultaneously Arbuthnot Securities Limited is changing its name to Westhouse Securities Limited.