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6 July 2023

TClarke plc

Oversubscribed Placing to raise £10.7 million

TClarke plc ("TClarke", the "Group" or the "Company"), the Building Services Group, is pleased to announce that it has conditionally raised gross proceeds of £10.7 million by way of an oversubscribed placing of new Ordinary Shares in the Company by Cenkos Securities plc ("Cenkos") to certain institutional and other investors (the "Placing") in order to fund significant further expansion beyond 2023.

Highlights

·      Oversubscribed Placing to raise gross proceeds of £10.7 million at the Placing Price, subject to TClarke shareholder approval.

·      The issue price of 122 pence per Ordinary Share (the "Placing Price") represents a discount of approximately 14% to the closing mid-market price per existing TClarke ordinary share of 141.5 pence on 5 July 2023.

·      Board remains highly confident that the Group will successfully deliver its growth strategy such that the Group's revenues will exceed £500m for the first time in the current financial year, in doing so achieving the three year revenue growth strategy set out by the Board in March 2021.

·      With the Group's forward order book now standing at £781m (2022: £586m), the net proceeds of the Placing will further strengthen the Group's balance sheet and will provide additional resources with which to capture and deliver additional identified short to medium term attractive contract opportunities in the London business - in doing so driving further growth and margin expansion.

·      The Directors anticipate significant earnings accretion deployment of the net Placing proceeds into the delivery of anticipated near term contract wins.

·      The Company's largest shareholder, Regent Gas Holdings Ltd, has subscribed for 4,000,000 Placing Shares at the Placing Price.

·      Cenkos is acting as Sole Broker in connection with the Placing.

The Placing is conditional, inter alia, upon approval by Shareholders of the Resolutions and the placing agreement between Cenkos and the Company becoming unconditional and not being terminated. A circular, which will contain the notice of a general meeting of the Company to put the necessary Resolutions to Shareholders (the "General Meeting") is being posted to Shareholders today (the "Circular") and will also be available on the Company's website www.tclarke.co.uk. The same definitions apply throughout this announcement as are applied in the Circular.

The General Meeting will be held at 30 St. Mary Axe, London EC3A 8BF on 24 July 2023 at 9.00 a.m.

Shareholders must submit their votes by proxy no later than 9.00 a.m. on 20 July 2023.

Current Trading, Outlook and Use of Placing Proceeds

The Company announced on 10 May 2023 that trading in the early months of 2023 financial had been strong. Trading since that announcement has continued to be strong and the Board remains highly confident that the Group will successfully deliver its growth strategy such that the Group's revenues will exceed £500m for the first time in the current financial year, in doing so achieving the three year revenue growth strategy set out by the Board in March 2021. The Group is £4.5m net cash positive as at 30 June 2023.

TClarke's forward order book has been replenished and so far during 2023 it has been strengthened significantly. The forward order book now stands at £781m (2022: £586m). TClarke is well-positioned to manage additional revenues in our various market sectors, having proactively invested in resources and capacity to support the Group's growth ambitions.

Whilst maintaining the Group's strict and selective approach to tendering, the Group is experiencing increased visibility in revenues outside of London and an increasing number of attractive contract opportunities in the London region. The Board is therefore encouraged by the strength of the Group's position in the market.

The net proceeds of the Placing will further strengthen the Group's balance sheet and will provide additional resources with which to capture and deliver identified short to medium term attractive contract opportunities in the London region - in doing so driving further growth and margin expansion.

TClarke will be reporting its half year results for the six months ended 30 June 2023 on 13 July 2023.

As a result, the Board considers the Placing to be in the best interests of the Company and the Group's Shareholders as a whole.

Further details on the Placing are set out below.

Admission, Settlement, Dealings and Total Voting Rights

The Placing Shares will, when issued, be credited as fully paid and rank pari passu in all respects with each other and with the Existing Ordinary Shares, including, without limitation, the right to receive all dividends and other distributions declared, made or paid after the date of issue.

Applications have been made to the Financial Conduct Authority (the "FCA") for admission of the Placing Shares to the premium listing segment of the Official List maintained by the FCA and to London Stock Exchange plc ("LSE") for admission of the Placing Shares to trading on LSE's main market for listed securities ("Admission"). Admission and settlement of the Placing Shares is expected to take place on or around 8.00 a.m. on 25 July 2023.

Following Admission, the Company will have a total of 52,850,780 Ordinary Shares in issue. There are no Ordinary Shares held in treasury and therefore the total number of voting rights in the Company is expected to be 52,850,780. This is the figure that may be used by Shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

For further information, please contact:

Expected Timetable of Principal Events

Recommendation and voting intentions

The Directors believe the Placing and the passing of the Resolutions to be in the best interests of the Company and its Shareholders, taken as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions as all of the Directors intend so to do in respect of their beneficial shareholdings amounting to an aggregate of 1,109,104 Existing Ordinary Shares, representing approximately 2.5% of the Company's Existing Ordinary Shares.

In addition, Regent Gas Holdings Ltd has confirmed to the Company that it intends to vote in favour of all Resolutions, with the exception of Resolution 1 under which they are not entitled to vote as per the Listing Rules, in respect of its beneficial interest in 7,366,407 Existing Ordinary Shares, representing approximately 16.7% of the Company's Existing Ordinary Shares.

If either of the Resolutions are not passed at the General meeting, the Placing will not proceed.

Related Party Transactions

Regent Gas Holdings Ltd is a related party of the Company for the purposes of the Listing Rules as it is a substantial shareholder of the Company.

Pursuant to, and on the terms of, the Placing, Regent Gas Holdings Ltd has subscribed for 4,000,000 Placing Shares at the Placing Price, raising gross proceeds of approximately £4.9 million.

The above transaction is a related party transaction requiring shareholder approval under LR 11.1.7.  Relevant details will be set out in the Circular to be sent to shareholders in connection with the Placing and shareholder approval for such participation will be sought at the general meeting of the Company to be held to approve the issue of the Placing Shares. 

Details of the Placing and the Placing Agreement

Under the terms of a placing agreement entered into on 6 July 2023, between Cenkos and the Company (the "Placing Agreement"), Cenkos has conditionally agreed to use its reasonable endeavours to procure subscribers for the Placing Shares to raise £10.7 million.

Cenkos has conditionally placed the Placing Shares with certain institutional and other investors at the Placing Price. The Placing is not being underwritten by Cenkos.

The Placing has raised net proceeds of £10.1 million through the Placing of the Placing Shares at the Placing Price. The Placing Price represents a discount of approximately 14% to the closing mid-market price per existing TClarke ordinary share of 141.5 pence on 5 July 2023, being the latest practicable date prior to the date of this announcement.

The Placing Shares will represent approximately 16.6% of the Company's enlarged issued ordinary share capital on Admission.

The Placing is conditional on, inter alia:

·      the passing of the Resolutions at the General Meeting;

·      the Placing Agreement not having been terminated in accordance with its terms prior to Admission of the Placing Shares;

·      Admission becoming effective by no later than 8.00 a.m. on 25 July 2023 or such later time and/or date as the Company and Cenkos may agree (being no later than 8.00 a.m. on 7 August 2023).

The Placing Agreement contains customary warranties given by the Company to Cenkos as to matters in relation to, inter alia, the accuracy of information in this Announcement and other matters relating to the Company and its business. In addition, the Company has provided a customary indemnity to Cenkos in respect of liabilities arising out of or in connection with the Placing.

Cenkos is entitled to terminate the Placing Agreement in certain circumstances prior to Admission including where any of the warranties are found not to be true or are materially inaccurate or are misleading in any respect, the failure of the Company to comply in any material respect with any of its obligations under the Placing Agreement, the occurrence of certain force majeure events or a material adverse change in the business of the Group or in financial or trading position or prospects of the Group or the Company.

General Meeting

The Board is seeking the approval of Shareholders at the General Meeting to allot the Placing Shares. The Placing is conditional, inter alia, on the passing of the Resolutions by Shareholders at the General Meeting.

Important Notices

The distribution of this Announcement and any other documentation associated with the Placing into jurisdictions other than the United Kingdom may be restricted by law.  Persons into whose possession these documents come should inform themselves about and observe any such restrictions.  Any failure to comply with these restrictions may constitute a violation of the securities laws or regulations of any such jurisdiction.  In particular, such documents should not be distributed, forwarded to or transmitted, directly or indirectly, in whole or in part, in, into or from the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where to do so may constitute a violation of the securities laws or regulations of any such jurisdiction (each a "Restricted Jurisdiction").

This Announcement is not an offer of securities for sale into the United States.  The Placing Shares have not been and will not be registered under the US Securities Act 1933 as amended (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States and, accordingly, may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the Placing Shares in the United States. 

The Placing Shares are being offered and sold only in "offshore transactions" outside the US in reliance on, and in accordance with, Regulation S under the US Securities Act.  The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the US or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Placing Shares or the accuracy or adequacy of this Announcement.  Any representation to the contrary is a criminal offence in the US. In addition, offers, sales or transfers of the securities in or into the US for a period of time following completion of the Placing by a person (whether or not participating in the Placing) may violate the registration requirement of the Securities Act.

The Placing Shares have not been and will not be registered under the relevant laws of any state, province or territory of any Restricted Jurisdiction and may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within any Restricted Jurisdiction except pursuant to an applicable exemption from registration requirements.  There will be no public offer of Placing Shares.

This Announcement is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in any jurisdiction and should not be relied upon in connection with any decision to subscribe for or acquire any of the Placing Shares (as the case may be).  In particular, this Announcement does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States.

This Announcement has been issued by, and is the sole responsibility of, the Company.  No person has been authorised to give any information or to make any representations other than those contained in this Announcement and, if given or made, such information or representations must not be relied on as having been authorised by the Company or Cenkos.  Subject to the Listing Rules of the FCA, the issue of this Announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this Announcement or that the information contained in it is correct at any subsequent date.

Cenkos, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any matters referred to in this Announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on Cenkos by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Cenkos does not accept any responsibility whatsoever for the contents of this Announcement, and makes no representation or warranty, express or implied, for the contents of this Announcement, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the Placing Shares or the Placing, and nothing in this Announcement is or shall be relied upon as, a promise or representation in this respect whether as to the past or future.  Cenkos accordingly disclaims to the fullest extent permitted by law all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this Announcement or any such statement.

No statement in this Announcement is intended to be a profit forecast or profit estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share of the Company.

This Announcement may include statements that are, or may be deemed to be, "forward-looking statements".  These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology.  These forward-looking statements include matters that are not historical facts.  They appear in a number of places throughout this Announcement and include statements regarding the Directors' current intentions, beliefs or expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the Company's markets.  By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances.  Actual results and developments could differ materially from those expressed or implied by the forward-looking statements.  Forward-looking statements may and often do differ materially from actual results.  Any forward-looking statements in this Announcement are based on certain factors and assumptions, including the Directors' current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's operations, results of operations, growth strategy and liquidity.  Whilst the Directors consider these assumptions to be reasonable based upon information currently available, they may prove to be incorrect.  Save as required by applicable law or regulation, the Company undertakes no obligation to release publicly the results of any revisions to any forward-looking statements in this Announcement that may occur due to any change in the Directors' expectations or to reflect events or circumstances after the date of this Announcement.

Information to Distributors

UK product governance

Solely for the purposes of the product governance requirements contained within of Chapter 3 of the FCA Handbook Production Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in paragraph 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all distribution channels (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors (for the purposes of UK Product Governance Requirements) should note that: (a) the price of the Placing Shares may decline and investors could lose all or part of their investment; (b) the Placing Shares offer no guaranteed income and no capital protection; and (c) an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom.  The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing.  Furthermore, it is noted that, notwithstanding the Target Market Assessment, Cenkos will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapter 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

Neither the content of the Company's website nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this Announcement.

Certain figures contained in this Announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this Announcement may not conform exactly with the total figure given.

All references to time in this Announcement are to London time, unless otherwise stated.

The Circular and the Notice of General Meeting have been submitted to the Financial Conduct Authority and will shortly be available for inspection via the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism  and will be sent to those shareholders who have elected to receive paper communications.

The Circular and the Notice of General Meeting will also be available to view on the Company's website at www.tclarke.co.uk.

The person responsible for arranging the release of this announcement on behalf of the Company is Trevor Mitchell, Finance Director