Covid-19 Update and Cost Saving Initiatives

30 March 2020

Ten Lifestyle Group plc

("Ten" or the "Company")

 

Covid-19 Update, Cost Saving Initiatives and PDMR Dealing

 

Ten Lifestyle Group plc (AIM: TENG), a leading technology-enabled lifestyle and travel service platform provides an update on the impact of the COVID-19 ("Coronavirus") pandemic and how the business is implementing cost saving initiatives, including the announcement of a voluntary salary sacrifice in exchange for share option grants.

 

Coronavirus Update

As outlined as part of the Trading Update announced on 6 March 2020, Ten's business model allows it to continue to deliver services relevant to its members and corporate clients. Revenue is driven substantially from service delivery rather than the conversion of bookings.

 

Around the world, Ten's robust operating model and business continuity plans have enabled the business to migrate staff, where it has been required, to homeworking, maintaining PCI compliance with no service interruption.

 

Ten is rapidly adapting to meet the changing needs of members during this time. March to date has seen record numbers of members using the service and a record number of individual requests being placed with the service. However, travel bookings have been significantly impacted with high levels of cancellations and refunds. This will impact revenue from commission payments¹ until global travel begins to recover. Furthermore, self-isolation will reduce restaurant and entertainment requests and there is no certainty that our new types of activity, relevant to people at home, will fully compensate for this impact in the months beyond March.

 

The Board recognises the considerable uncertainty during this period but is encouraged that the Company's blue-chip client base, made up predominantly of private and retail banking providers, including Coutts and HSBC Jade in the UK, is stable. Corporate clients' feedback is that they remain keen to support their high-value customers throughout this challenging period.

 

The Board reaffirms its expectations, as announced on 6 March 2020, for the half year results for the six-month period to 29 February 2020, which it expects to announce on Thursday 14 May 2020.

Due to the macroeconomic uncertainties, the Board expects to provide a further update on guidance once more clarity is known around the outlook of the business.

 

Cost Saving Initiatives

Despite the flexible nature of Ten's revenue and servicing model, and the quality of its client list, the effect of the Coronavirus pandemic in the short and mid-term remains uncertain. As a result, the Company is taking prudent actions to reduce cost in the business and improve cashflow. 

 

These actions include, but are not limited to, successful renegotiations with key suppliers; a review of projects to focus on the most strategic core investments (including continued development of our technology platform); a freeze on employee bonuses; and voluntary salary sacrifice in exchange for share option grants (as detailed below).

 

Given the ongoing uncertainty around the Coronavirus pandemic, these measures will help Ten maintain a healthy financial position and help ensure its ability to finance ongoing operations. Ten had net cash of £9.6m at end of February 2020 and no debt.

 

Share Option Grants and PDMR Dealings

On 27 March 2020, Ten granted options over a total of 3,708,966 ordinary shares of 0.1p each in the Company ("Ordinary Shares") with an exercise price of 70p, exercisable for up to three years from the date of grant (the "Options"), to certain employees and contractors of the Company including the 'persons discharging managerial responsibilities' ("PDMRs") listed below.

 

The grant of these Options is a cash saving initiative in which for every £1 of salary certain employees and contractors forgo over a 4-month period they will receive five options over Ordinary Shares in the Company.

 

The exercise price and number of options granted have been determined using the Black Scholes model for option pricing to ensure that the total economic value of these Options is equal to the value of the total salary foregone.

 

Over 150 individuals have chosen to participate. The total cash saving to the Company over the 4-month period will be £0.8m. 

 

PDMR	Position	Number of new Options granted	Resulting total options held over Ordinary Shares
Alex Cheatle	Chief Executive Officer	249,167	1,082,875
Andrew Long	Group Chief Operational Officer and Chief Executive Officer (Asia)	240,941	674,649
Sarah Hornbuckle	Client Services Director	60,008	215,716
Alan Donald	Chief Financial Officer	75,000	258,708
Toby Gauvain	President	116,667	356,667

 

The notification below, made in accordance with the Market Abuse Regulation, provides further details in relation to these PDMR dealings.

 

Employee Benefit Trust

The Company announces that on 27 March 2020, the Ten Group Employee Benefit Trust established on 22 February 2012 (the "EBT") was granted an option for NWH (Guernsey) Limited (the "Trustee") to subscribe for 400,000 Ordinary Shares with an exercise price of 70p, exercisable for up to five years from the date of grant (the "EBT Options"). These EBT Options are to be held in the EBT and are intended to be used to satisfy current and future share awards made under the Company's employee incentive and share option schemes. The EBT will also have the ability to sell resulting Ordinary Shares in order to generate cash for employee loyalty programmes. The EBT is a discretionary trust and the class of beneficiaries of the EBT includes employees and former employees of the Company and their relatives. The EBT is primarily intended to reward employees, not management, who have shown commitment to the Company and who may then benefit in the future in scenarios where the Company's share price rises materially above the exercise price of 70p. This transaction also avoids the Company having to fund the EBT and therefore is another cash saving initiative during this uncertain period.

 

Following this transaction, a total of 400,000 options over Ordinary Shares will be held by the Company's EBT and a total of 553,546 Ordinary Shares continue to be held by the EBT.

 

Alex Cheatle, CEO, Ten Lifestyle Group plc, commented:

"Our priority in this difficult time is supporting our members and their families in relevant ways. While traditionally we help organise travel, events and dining, our experts have been able to rapidly shift their focus to also supplying our members with what they need, whether that be a new home office or helping to rearrange Easter travel plans.

We are seeing significant benefits from our investment into building a leading technology platform from which we help our members. On this basis, all of our employees are also able to work from home and maintain our high standards of customer service while also following government guidance.

I would like to take this opportunity to thank our employees, members and corporate clients for their continued support."

 

 

For further information, please visit https://www.tengroup.com/ or contact:

 

Ten Lifestyle Group Plc Alex Cheatle, Chief Executive Officer Alan Donald, Chief Financial Officer	via Tavistock   +44 (0)20 7479 3427
Peel Hunt LLP, Nominated Advisor and Broker Edward Knight George Sellar Nick Prowting	+44 (0) 20 7418 8900
Tavistock, Financial PR & IR Jos Simson Simon Hudson Heather Armstrong	+44 (0) 20 7920 3150

 

 

1		Details of the person discharging managerial responsibilities / person closely associated
a)		Name	Alex Cheatle
2		Reason for the notification
a)		Position/status	Chief Executive Officer
b)		Initial notification /Amendment	Initial Notification
3		Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)		Name	Ten Lifestyle Group Plc
b)		LEI	213800YK94ZUOJUMN686
4		Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)		Description of the financial instrument, type of instrument	Options over Ordinary shares of 0.1p each
		Identification code	ISIN: GB00BF188X60
b)		Nature of the transaction	Issue of Options
c)		Price(s) and volume(s)		Price(s)	Volume(s)
				Exercise price of £0.70	249,167
d)		Aggregated information
		- Aggregated volume	249,167
		- Price	NA
e)		Date of the transaction	27 March 2020
f)		Place of the transaction	Outside a trading venue

 

 

1		Details of the person discharging managerial responsibilities / person closely associated
a)		Name	Andrew Long
2		Reason for the notification
a)		Position/status	Group Chief Operational Officer and Chief Executive Officer (Asia)
b)		Initial notification /Amendment	Initial Notification
3		Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)		Name	Ten Lifestyle Group Plc
b)		LEI	213800YK94ZUOJUMN686
4		Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)		Description of the financial instrument, type of instrument	Options over Ordinary shares of 0.1p each
		Identification code	ISIN: GB00BF188X60
b)		Nature of the transaction	Issue of Options
c)		Price(s) and volume(s)		Price(s)	Volume(s)
				Exercise price of £0.70	240,941
d)		Aggregated information
		- Aggregated volume	240,941
		- Price	NA
e)		Date of the transaction	27 March 2020
f)		Place of the transaction	Outside a trading venue

 

 

1		Details of the person discharging managerial responsibilities / person closely associated
a)		Name	Sarah Hornbuckle
2		Reason for the notification
a)		Position/status	Client Services Director
b)		Initial notification /Amendment	Initial Notification
3		Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)		Name	Ten Lifestyle Group Plc
b)		LEI	213800YK94ZUOJUMN686
4		Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)		Description of the financial instrument, type of instrument	Options over Ordinary shares of 0.1p each
		Identification code	ISIN: GB00BF188X60
b)		Nature of the transaction	Issue of Options
c)		Price(s) and volume(s)		Price(s)	Volume(s)
				Exercise price of £0.70	60,008
d)		Aggregated information
		- Aggregated volume	60,008
		- Price	NA
e)		Date of the transaction	27 March 2020
f)		Place of the transaction	Outside a trading venue

 

 

1		Details of the person discharging managerial responsibilities / person closely associated
a)		Name	Alan Donald
2		Reason for the notification
a)		Position/status	Chief Finance Officer
b)		Initial notification /Amendment	Initial Notification
3		Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)		Name	Ten Lifestyle Group Plc
b)		LEI	213800YK94ZUOJUMN686
4		Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)		Description of the financial instrument, type of instrument	Options over Ordinary shares of 0.1p each
		Identification code	ISIN: GB00BF188X60
b)		Nature of the transaction	Issue of Options
c)		Price(s) and volume(s)		Price(s)	Volume(s)
				Exercise price of £0.70	75,000
d)		Aggregated information
		- Aggregated volume	75,000
		- Price	NA
e)		Date of the transaction	27 March 2020
f)		Place of the transaction	Outside a trading venue

 

1		Details of the person discharging managerial responsibilities / person closely associated
a)		Name	Toby Gauvain
2		Reason for the notification
a)		Position/status	President
b)		Initial notification /Amendment	Initial Notification
3		Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)		Name	Ten Lifestyle Group Plc
b)		LEI	213800YK94ZUOJUMN686
4		Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)		Description of the financial instrument, type of instrument	Options over Ordinary shares of 0.1p each
		Identification code	ISIN: GB00BF188X60
b)		Nature of the transaction	Issue of Options
c)		Price(s) and volume(s)		Price(s)	Volume(s)
				Exercise price of £0.70	116,667
d)		Aggregated information
		- Aggregated volume	116,667
		- Price	NA
e)		Date of the transaction	27 March 2020
f)		Place of the transaction	Outside a trading venue