NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, AUSTRALIA OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

This announcement is not an admission document or a prospectus and does not constitute or form part of, and should not be construed as, an offer to sell or issue, or a solicitation of any offer to buy or subscribe for, any securities in any jurisdiction. Prospective investors should not subscribe for or purchase any securities referred to in this announcement, except on the basis of the information in the final admission document to be published by the Company and any supplement thereto (the "Admission Document"), in connection with the placing (the "Placing") of its issued and to be issued ordinary shares (the "Ordinary Shares") and the proposed admission to trading on AIM ("Admission").

25 November 2021

Skillcast Group plc

("Skillcast" or the "Company")

Intention to Float on AIM

PROPOSED ADMISSION TO TRADING ON AIM AND £4.5 MILLION PLACING

Skillcast Group plc (AIM: SKL), together with its subsidiaries (the "Group"), a provider of e-learning software and content subscriptions and related professional services, announces the proposed admission of its Ordinary Shares to trading on the AIM market of the London Stock Exchange, which is expected to take place on 1 December 2021. The Company has raised £3.5 million (before expenses), conditional on admission, giving it an expected market capitalisation of £33.1 million at the placing price of 37p per Ordinary Share. In addition, a further £1.0 million, conditional on admission, of existing Ordinary Shares are being sold on behalf of selling shareholders.

Admission and commencement of dealings on AIM are expected to take place at 8:00 a.m. on 1 December 2021, under the ticker SKL.

Allenby Capital is acting as Nominated Adviser and Broker to the Company.

Overview of Skillcast

Skillcast provides software and content subscriptions and related professional services to enable companies to implement their staff compliance and training obligations. Operating from its two bases, in London and Malta, the Group helps companies across a broad spectrum of industry sectors in the UK, EU and the rest of the world, to train their staff and demonstrate compliance with various laws, regulations, and standards that are relevant for their business.

Subscriptions

The Group earns recurring revenues from client subscriptions to: (i) the Skillcast Portal - the Group's integrated compliance management application that comes with a broad range of tools, the Skillcast portal is white-labelled to create a branded one-stop staff compliance portal for the client.; and (ii) the Skillcast off-the-shelf ("OTS") course libraries, the OTS course libraries are targeted at SMEs in the UK seeking affordable e-learning courses that can be deployed straightforwardly and at short notice to train their employees.

Professional Services

The Group provides a range of services to clients on a project basis for a one-time charge, including the development of bespoke e-learning solutions, content translation and localisation, sale of perpetual licences for readymade content, customisation of OTS course content for subscription clients and other content, technology, and consultancy projects.

The Group has been operating for 20 years, and its client base includes several blue-chip companies such as Schroders, Fresnillo, GKN, British Land, Oxford University Press, Vattenfall, Allergan and a number of other constituents of the FTSE 100 Index.

The Group has a track record of delivering sustained growth and profitability and generating positive cash flows over the past five years.  A significant portion of the Group's revenue is derived from subscription contracts with a 12-month term. The Group uses annual recurring revenue ("ARR") as a metric to measure the size of the Group's subscription business. The Group's ARR increased from £4.0 million in June 2020 to £4.5 million in Dec 2020 and £5.1 million in June 2021.

Key Strengths

High-growth, resilient market

The Group serves a B2B market for training, policy and compliance technology that displays strong resilience and high levels of non-discretionary spending. The Directors believe that the industry is shifting towards cloud-based platforms for staff training and compliance, particularly in light of the increase in remote and hybrid working arising from the COVID pandemic.

Breadth and depth of product

The Group offers technology, content, and services to assist companies in fulfilling their staff compliance obligations with considerable depth in each of its product lines.

Scalable subscription model

The contribution of the content and SaaS subscriptions to the Group's revenues increased from 56 per cent. in 2020 to 63 per cent. in the first half of 2021. The Group's strategic focus seeks to continue this trend. Subscription sales are more profitable and scalable than professional services, and they provide the Group with good visibility of earnings and cumulative growth.

Market position

Skillcast is a leading brand for compliance e-learning in the UK with over 600 clients, growing at an average rate of 18 new clients a month during the period January to August 2021, of which approximately one sixth came through referrals.

Proven track record

Skillcast is an historically profitable and cash generative business which has achieved strong organic growth. Despite the impact of the COVID pandemic in 2020, the Group continued to grow revenues and remained profitable whilst accelerating investment in technology. The Group has not received any government funding or debt financing.

Customer service

Skillcast has a reputation for customer success, as demonstrated by its consistent not less than 4.9/5.0 rating by clients for customer experience on Feefo for the past four years, for which it has earned the Platinum Trusted Service Award.

Technology and content Intellectual Property ("IP")

The Group's recurring revenues are derived from the subscriptions to the content and technology IP, developed and owned by the Group. Subscription revenue accounted for approximately 63 per cent. of Group revenues during the first half of 2021.

Highly experienced team

The Group's board has significant experience with managing and growing compliance and SaaS businesses, and listed firms. The founders each have over two decades' experience in delivering e-learning and SaaS solutions and executing projects for blue chip clients.

Dividend Policy

The Group has a track record of paying dividends. The Group declared an annual dividend of approximately £0.4 million in respect of the Group's performance in the years 2018, 2019 and 2020 and is committed to continuing the payment of dividends following Admission. The Directors intend to at least maintain dividends at this level from Admission and will consider the adoption of a progressive dividend policy in the future.

Growth Strategy

·      Increasing the client acquisition rate by expanding content marketing, thought leadership, referrals from customers and targeted outreach in the financial services sector;

·      Expanding the sales of the Group's SaaS subscriptions in the EU;

·    Capitalising on up-selling opportunities, utilising the Group's attentive account management and ability to sell the Regtech add-ons to existing e-learning clients;

·   Maintaining a low client churn rate with the Group's highly responsive and knowledgeable customer service;

·      Migrate the Group's IT infrastructure from co-located physical servers to Microsoft Azure cloud computing services;

·      Develop the technology to enable client self-service;

·      Streamline the buyer journey from demonstrations, through pre-sales, to post-sales and onboarding;

·      Position and promote the Skillcast portal on cloud marketplaces in the UK and the EU;

·    Intensify the Group's effort to promote the public Skillcast website as the top destination for compliance blogs, free courses, games and other useful content; and

·   Build a video on demand channel to deepen engagement with individual compliance officers and other senior managers.

Reasons for Admission and Use of Placing Proceeds

Reasons for Admission

·      Enable the acceleration of investment in technology and marketing;

·      Provide access to further capital should the Group require;

·      Strengthen the Group's reputation and credibility as a staff compliance technology provider; and

·      Enhance the Group's ability to hire and retain talent.

Use of Proceeds

·      Further develop the Group's technology, migrate to cloud computing, implement self-service, streamline the buyer journey, and position its products on complementary cloud marketplaces; and

·      Investment in content marketing in order to seek to drive new client acquisitions.

Vivek Dodd, CEO of Skillcast said:

"We are delighted to announce our intention to seek admission to trading on AIM following years of strong performance as a private company. This marks an exciting new stage of our growth journey.

"We are transforming compliance in corporate workplaces with positive employee engagements. Our technology and content enable companies to move away from reactive compliance focused on remediation to proactive compliance focused on risk reduction. Our clients wish to go beyond meeting their minimum regulatory requirements. They see compliance as a source of resilience and competitive advantage.

"The admission to trading on AIM will enable Skillcast to invest further in technology developments for improving user experience and the onboarding process, and to broaden our efforts in spreading the message of compliance transformation, integrity and good governance."

For further information please contact:

Directors from Admission

Richard Amos, Non-Executive Chairman

Richard is a qualified Chartered Accountant who started his career at EY in 1988 and has subsequently served in several senior finance roles. Over the last 20 years, Richard has served as an executive on the boards of five companies listed on the London Stock Exchange, most recently as Chief Financial Officer of Wilmington plc, Chief Financial Officer of Plant Impact plc and Group Finance Director of Anite plc. He is currently an independent non-executive director at Thruvision plc (AIM: THRU). Richard is a member of the company's audit and remuneration committees.

Vivek Dodd, Chief Executive Officer

Vivek is a co-founder of Skillcast. He has been creating regulatory courses and compliance tools for over two decades. Before Skillcast, he worked as an investment banker at JP Morgan, and as a finance and compliance trainer. He has an Masters degree from Massachusetts Institute of Technology, and a Bachelors degree from the Indian Institute of Technology and has been a CFA Charterholder.

Catriona Razic, Chief Commercial Officer

Catriona is a co-founder of Skillcast. For over twenty years, she has advised the Group's global clients on their compliance communication strategy. She leads the sales function to offer clients of all sizes Skillcast's solutions for their compliance and learning initiatives. Catriona previously worked in learning and development at Japanese securities house Nikko Securities and at youth development charity Raleigh International. She holds a degree in Psychology and Economics.

Anthony Miller, Chief Technical Officer

Anthony is a co-founder of Skillcast. Over the last twenty years, he has led the design and development of the Group's award-winning technology products. He has worked with enterprise customers to deliver transformative training and compliance solutions tailored to their specific requirements. He is responsible for managing the Group's Application Development, IT Infrastructure and Enterprise Solutions teams. He has an Executive MBA from Cass Business School and a BSc in Economics from the London School of Economics.

Christopher Backhouse, Chief Financial Officer

Chris joined Skillcast in 2018. He qualified as a Chartered Accountant with KMPG and subsequently worked at Baker Tilly and Ernst & Young. After leaving the accountancy profession in 1993, Chris has spent the majority of his career working as a Chief Financial Officer or Finance Director at a series of listed and venture capital backed businesses. In 2007, he joined an accountancy business that provided part-time finance directors to entrepreneurial business. Subsequently, he co-founded Enterprise FD Ltd in 2018, which provides finance and accounting services, including part-time and interim finance directors to a portfolio of client companies.

Isabel Napper, Senior Independent Non-Executive Director

Isabel has more than 25 years of experience in advising clients in the technology and healthcare/life science areas, both public and private sector, leading on business development and managing regulatory issues, governance risk and strategic change. Isabel was previously a Partner at the law firm Mills & Reeve LLP, where she acted as legal adviser and company secretary to several boards. Isabel is currently a nonexecutive director at Tristel plc (AIM: TSTL), SDI Group plc (AIM: SDI) and Keystone Law Group plc (AIM: KEYS). Isabel chairs the Company's remuneration committee and is a member of the Company's audit committee.

Sally Tilleray, Independent Non-Executive Director

Sally is a qualified Chartered Institute of Management Accountants (CIMA) accountant and an experienced UK public company director. She has served as Group Chief Operating Officer and Group Chief Financial Officer at Huntsworth plc, the international public relations and healthcare communications group, from 2004 to 2014. She is an experienced marketing service agency executive and has been Non-Executive Chair at Cognito since 2016 and Non-Executive Chair of digital agency, UNRVLD since 2020. She has been Non-Executive Director of NAHL plc (AIM: NAH), the consumer legal-focused marketing and services business, since 2019 and senior independent Non-Executive Director Mind Gym plc (AIM: MIND), an international behavioural science company delivering business improvement solutions to companies across the world since 2018. Sally chairs the Company's audit committee and is a member of the Company's remuneration committee, a role she also holds at both NAHL plc and Mind Gym plc.

IMPORTANT INFORMATION

This announcement does not constitute, or form part of, any offer or invitation to sell, allot or issue, or any solicitation of any offer to purchase or subscribe for, any securities in the Company 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 or act as an inducement to enter into, any contract or commitment therefor.

Recipients of this announcement who are considering subscribing for or acquiring Ordinary Shares are reminded that any such acquisition or subscription must be made only on the basis of the information contained in the final Admission Document, which may be different from the information contained in this announcement. No reliance may be placed, for any purpose whatsoever, on the information or opinions contained in this announcement or on its accuracy, fairness or completeness. To the fullest extent permitted by applicable law or regulation, no undertaking, representation or warranty, express or implied, is given by or on behalf of the Company, Allenby, or their respective parent or subsidiary undertakings or the subsidiary undertakings of any such parent undertakings or any of their respective directors, officers, partners, employees, agents, affiliates, representatives or advisers or any other person as to the accuracy, sufficiency, completeness or fairness of the information, opinions or beliefs contained in this announcement and, save in the case of fraud, no responsibility or liability is accepted by any of them for any errors, omissions or inaccuracies in such information, opinions or beliefs or for any loss, cost or damage suffered or incurred, howsoever arising, from any use, as a result of the reliance on, or otherwise in connection with, this announcement.

Allenby Capital Limited, which is authorised and regulated by the Financial Conduct Authority is acting only for the Company in connection with the proposed Placing and Admission and are not acting for or advising any other person, or treating any other person as their respective client, in relation thereto, or advice to any other person in relation to the matters contained herein. Such persons should seek their own independent legal, investment and tax advice as they see fit. Allenby's responsibilities, as the Company's nominated adviser under the AIM Rules for Nominated Advisers and AIM Rules for Companies will be owed solely to the London Stock Exchange and not to the Company, to any of its directors or to any other person in respect of a decision to subscribe for or otherwise acquire Ordinary Shares in reliance on the Admission Document. No representation or warranty, express or implied, is made by Allenby or the Company or their respective affiliates as to any of its contents.

In the United Kingdom, this announcement is for distribution only to persons who are Qualified Investors within the meaning of the Prospectus Regulation (Regulation (EU) 2017/1129, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended by the Prospectus (Amendment, etc) (EU Exit) Regulations 2019) and who (i) fall within the definition of "investment professional" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (ii) are high net worth companies, unincorporated associations or partnerships or trustees of high value trusts as described in article 49(2) of the Order or (iii) are persons to whom it may otherwise be lawfully communicated (all such persons together being referred to as "Relevant Persons"). 

In the European Economic Area (the "EEA"), this announcement is only addressed to and directed at persons in member states of the EEA who are "qualified investors" within the meaning of Article 2(e) of Regulation (EU) 2017/1129 (as amended) ("Qualified Investors")

This announcement must not be acted or relied on (i) in the United Kingdom, by persons who are not Relevant Persons and (ii) in any member state of the EEA by persons who are not Qualified Investors. Any investment activity to which this announcement relates (i) in the United Kingdom is available only to, and may be engaged in only with, Relevant Persons; and (ii) in any member state of the EEA is available only to, and may be engaged only with, Qualified Investors.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America, Canada, Japan, New Zealand, the Republic of South Africa, Australia or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction. This announcement is not an offer of securities for sale into the United States of America, Canada, Japan, New Zealand, the Republic of South Africa, Australia. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States. The securities may not be offered or sold in the United States, except pursuant to an applicable exemption from the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. No public offering of the securities referred to herein is being made in the United States.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

The date of Admission may be influenced by factors such as market conditions. There is no guarantee that the Admission Document will be published or that the Placing and Admission will occur, and you should not base your financial decisions on the Company's intentions in relation to the Placing and Admission at this stage. Acquiring securities to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. The value of shares can decrease as well as increase. This announcement does not constitute a recommendation concerning the Placing. Persons considering an investment in such investments should consult an authorised person specialising in advising on such investments.

This announcement contains certain statements that are, or may be, forward looking statements with respect to the financial condition, results of operations, business achievements and/or investment strategy of the Company. Such forward looking statements are based on the Board's expectations of external conditions and events, current business strategy and plans and the other objectives of management for future operations, and estimates and projections of the Company's financial performance. Though the Board believes these expectations to be reasonable at the date of this announcement, they may prove to be erroneous. Forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, achievements or performance of the Group, or the industry in which the Group operates, to be materially different from any future results, achievements or performance expressed or implied by such forward looking statements. Past performance cannot be relied upon as a guide to future performance and should not be taken as a representation that trends or activities underlying past performance will continue in the future.

Certain figures 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 to the total figure given.

For the avoidance of doubt, the contents of the Company's website is not incorporated by reference into, and do not form part of, this announcement.

NOTICE TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II, as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and 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, Allenby Capital Limited has only procured 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 MiFID II; 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.