Result of Placing and Subscription

THIS ANNOUNCEMENT (AND THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR FORWARDING, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN STAFFLINE GROUP PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF STAFFLINE GROUP PLC.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU NO. 596/2014) AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR").

21 May 2021

Staffline Group plc

("Staffline", the "Company" or the "Group")

Result of Placing and Subscription

Staffline (AIM: STAF), the recruitment and training group, is pleased to announce the successful completion of the Placing, which was oversubscribed, and Subscription announced earlier today by the Company.

A total of 87,249,500 new ordinary shares of 10 pence each (the "Placing Shares") have been placed at a price of 50 pence per share (the "Issue Price") to certain existing shareholders and new institutional investors.

Concurrently with the Placing, certain Directors and employees of the Group have agreed to subscribe for 750,500 new ordinary shares of 10 pence each (the "Subscription Shares") at the Issue Price.

Together, the Placing Shares and the Subscription Shares comprise 88,000,000 new ordinary shares of 10 pence each, raising gross proceeds of £44 million for the Company. The Issue Price represents a discount of approximately 29 per cent. to the closing share price of 70 pence on 20 May 2021. The Placing Shares and the Subscription Shares being issued together represent approximately 128 per cent. of the existing issued ordinary share capital of the Company prior to the Placing and Subscription.

Liberum Capital Limited ("Liberum") acted as Nominated Adviser, Broker and Sole Bookrunner in connection with the Placing. Canaccord Genuity acted as financial adviser to the Company.

The Placing Shares are not subject to clawback and are not part of the Open Offer. Neither the Placing nor the Open Offer is underwritten.

Albert Ellis, Chief Executive Officer of Staffline, commented:

"We are delighted to have received such a strong endorsement from both new and existing investors for this fundraising, which, coupled with our working capital refinancing will transform our balance sheet.  The level of support for the transaction is testament to the turnaround, strategic progress and deep transformation delivered over the last year. This includes exiting non-core loss-making businesses and contracts as well as reducing the Group's headcount and infrastructure costs, whilst maintaining the highest levels of fulfilment for our blue-chip customers. The divisional leadership team have implemented substantial operational improvements and we are beginning to realise the benefits of this, in both the quality of the business we are winning and the talent we are attracting."

"We continue to see positive momentum in 2021 across the Group and look forward to further capitalising on our market leading positions with the strong platform that this refinancing provides us."

Related Party Transactions

Gresham House Asset Management and Henry Spain Investment Services are considered to be related parties of the Company (the "Substantial Shareholders") for the purposes of the AIM Rules by virtue of their status as substantial shareholders of the Company.

The Substantial Shareholders have agreed to subscribe for 9,000,000 and 6,000,000 Placing Shares, respectively, as part of the Placing.

The Directors, having consulted with the Company's Nominated Adviser, Liberum, consider that the terms of the participations in the Placing by the Substantial Shareholders are fair and reasonable insofar as the shareholders of the Company are concerned. 

Director participation

The following Directors participated in the Placing or Subscription:

Notice of General Meeting

The Circular containing further details of the Fundraise and convening the General Meeting and containing the Application Form for the Open Offer and the Proxy Form for the General Meeting is expected to be despatched to Shareholders on or around 24 May 2021 and will thereafter be available on the Company's website at https://www.stafflinegroupplc.co.uk/investor-relations/.

The Placing, Subscription and Open Offer are subject to, inter alia, the passing of the Resolutions, for which Shareholder approval will be sought at the General Meeting. It is very important that Shareholders vote in favour of the Resolutions as in the event that the Transaction cannot proceed the Group would not have sufficient liquidity under its Existing Facilities to meet its forecast funding requirements. In such circumstances the Board would seek to refinance its Existing Facilities but, based on current information available, the Board believes that it is unlikely to be able to do so without an equity raise or some other form of corporate action which it cannot be certain it would achieve.

It is proposed that a General Meeting will be held at 11.00 a.m. on 9 June 2021. In light of the ongoing Covid-19 concerns, the General Meeting will be held as a closed meeting and accordingly, save for the minimum number of Director shareholders so as to form a quorum (2), no Shareholders will be able to physically attend the General Meeting.

Admission

Application will be made to London Stock Exchange plc for the Placing Shares, Subscription Shares and the Open Offer Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will become effective and that dealings in the Placing Shares, Subscription Shares and the Open Offer Shares will commence at 8.00 a.m. on 10 June 2021 (being the business day following the General Meeting), subject to the Resolutions being passed at the General Meeting.

Other than where defined, capitalised terms used in this announcement have the meanings given to them in the 'Proposed Placing and Subscription to raise £44 million, Proposed Open Offer to raise £4.4 million and Proposed Debt Refinancing' announcement released by the Company on 21 May 2021 (RNS number: 3759Z).

Enquiries:

About Staffline - Recruitment, Training and Support 

Enabling the Future of Work™

Staffline is the UK's market leading Recruitment and Training group. It has three divisions:

 Recruitment GB

Staffline is the UK's leading provider of flexible blue-collar workers, supplying approximately 40,000 staff per day on average to around 450 client sites, across a wide range of industries including agriculture, supermarkets, drinks, driving, food processing, logistics and manufacturing.

Recruitment Ireland 

The recruitment Ireland business is a leading end to end solutions provider operating across twenty industries, ten branch locations, fifteen onsite customer locations and offering RPO, MSP, temporary and permanent solutions across the island of Ireland.

PeoplePlus Division

Staffline is the leading adult skills and training provider in the UK, delivering adult education, prison education and skills-based employability programmes across the country.

IMPORTANT NOTICE

Neither this Announcement, nor any copy of it, may be taken or transmitted, published or distributed, directly or indirectly, in whole or in part, in or into the United States, Australia, Canada, Japan, Singapore, New Zealand or the Republic of South Africa or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction (each, a "Restricted Jurisdiction"). This Announcement is for information purposes only and neither it, nor the information contained in it, shall constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for any shares in the capital of the Company in the United States, Australia, Canada, Japan, Singapore, New Zealand or the Republic of South Africa or any other state or jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation.  Any failure to comply with these restrictions may constitute a violation of securities laws of such jurisdictions. 

The Placing Shares 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 or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, pledged, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States.

This communication is only addressed or distributed to, and directed at, persons (A) in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(e) of the Prospectus Regulation ("Qualified Investors").  For the purposes of this provision, the expression "Prospectus Regulation" means Regulation (EU) 2017/1129; (B) in the United Kingdom, this communication is being distributed only to, and is directed only at, "qualified investors" (as defined in the UK version of the Prospectus Regulation, which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 (as amended from time to time)): (i) who have professional experience in matters relating to investments who fall within the definition of "investment professional" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (ii) who are high net worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order, and (iii) other persons to whom it may otherwise lawfully be communicated; and (C) in Singapore who are (i) institutional investors within the meaning of section 4A of the Securities and Futures Act (Chapter 289) of Singapore ("SFA"), (ii) relevant persons within the meaning of 275(2) of the SFA or (iii) persons to whom an offer is made pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA (all such persons together being referred to as "relevant persons").  Any investment or investment activity to which this communication relates is available only to and will only be engaged in with such persons. This communication must not be acted on or relied on in any member state of the European Economic Area,  the United Kingdom or Singapore by persons who are not relevant persons.

No action has been taken by the Company, Liberum or any of their respective directors, officers, partners, agents, employees, affiliates, advisors, consultants or, in the case of Liberum, persons connected with it as defined in the Financial Services and Markets Act 2000, as amended ("FSMA") (together, "Affiliates") that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this Announcement are required to inform themselves about and to observe any restrictions contained in this Announcement.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any action.

This Announcement has not been approved by the Financial Conduct Authority or the London Stock Exchange.

No offering document or prospectus will be made available in connection with the matters contained or referred to in this Announcement and no such offering document or prospectus is required to be published, in accordance with Regulation (EU) 2017/1129 (the "Prospectus Regulation") or Regulation (EU) 2017/1129, as amended and retained in UK law on 31 December 2020 by the European Union (Withdrawal) Act 2018 (the "EUWA") (the "UK Prospectus Regulation").

This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by, a person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person.

No offering document or any registration statements has been, or will be, filed with the Monetary Authority of Singapore. Accordingly, this Announcement and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of Placing Shares may not be circulated or distributed, nor may the Placing Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (a) institutional investors within the meaning of section 4A of the SFA, (b) relevant persons within the meaning of 275(2) of the SFA or (c) persons to whom an offer is made pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA. This Announcement has not been reviewed by the Monetary Authority of Singapore.

This Announcement has been issued by, and is the sole responsibility of, the Company. No responsibility or liability is or will be accepted by, and no undertaking, representation or warranty or other assurance, express or implied, is or will be made or given by Liberum, or by any of its Affiliates as to, or in relation to, the accuracy, fairness or completeness of the information or opinions contained in this Announcement or any other written or oral information made available to or publicly available to any interested person or its advisers, and any liability therefore is expressly disclaimed. The information in this Announcement is subject to change.

None of the information in this Announcement has been independently verified or approved by Liberum or any of its Affiliates. Save for any responsibilities or liabilities, if any, imposed on Liberum by FSMA or by the regulatory regime established under it, no responsibility or liability whatsoever whether arising in tort, contract or otherwise, is accepted by Liberum or any of its Affiliates whatsoever for the contents of the information contained in this Announcement (including, but not limited to, any errors, omissions or inaccuracies in the information or any opinions) or for any other statement made or purported to be made by or on behalf of either of Liberum or any of its Affiliates in connection with the Company, the Placing Shares or the Placing or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this Announcement or its contents or otherwise in connection with this Announcement or from any acts or omissions of the Company in relation to the Placing. Liberum and its Affiliates accordingly disclaim all and any responsibility and liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this Announcement and no representation or warranty, express or implied, is made by Liberum or any of its Affiliates as to the accuracy, completeness or sufficiency of the information contained in this Announcement.

Liberum, which is authorised and regulated in the United Kingdom by the FCA, is acting solely for the Company and no-one else in connection with the Placing and the transactions and arrangements described in this Announcement and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing or the transactions and arrangements described in this Announcement. Liberum is not responsible to anyone other than the Company for providing the protections afforded to clients of Liberum or for providing advice in connection with the contents of this Announcement, the Placing or the transactions and arrangements described herein. The responsibilities of Liberum as the Company's nominated adviser and broker under the AIM Rules and the AIM Rules for Nominated Advisers are owed to the London Stock Exchange solely and are not owed to Staffline Group plc or to any Director, Shareholder or any other person in respect of such Shareholder's decision to acquire Shares in reliance on any part of this announcement or otherwise

Certain statements in this Announcement are forward-looking statements, which include all statements other than statements of historical fact and which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "could", "may", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Company's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the FCA, the London Stock Exchange or applicable law, the Company, Liberum and their respective Affiliates undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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

This Announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by Liberum. This Announcement is not intended to provide the basis for any decision in respect of the Company or other evaluation of any securities of the Company or any other entity and should not be considered as a recommendation that any investor should subscribe for, purchase, otherwise acquire, sell or otherwise dispose of any such securities. Recipients of this Announcement who are considering acquiring Placing Shares pursuant to the Placing are reminded that they should conduct their own investigation, evaluation and analysis of the business, data and property described in this Announcement.  Any indication in this Announcement of the price at which the Company's shares have been bought or sold in the past cannot be relied upon as a guide to future performance. The price and value of securities can go down as well as up.

The contents of this Announcement are not to be construed as legal, business, financial or tax advice. Each shareholder or prospective investor should consult with his or her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

In connection with the Placing, Liberum and any of its Affiliates, acting as investors for their own account, may take up a portion of the Placing Shares in the Placing as a principal position and in that capacity may retain, purchase, sell, offer to sell for the own accounts or otherwise deal for their own account in such Placing Shares and other securities of the Company or related investments in connection with the Placing or otherwise. Accordingly, references to Placing Shares being offered, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or acquisition, placing or dealing by, Liberum and any of its Affiliates acting in such capacity. In addition, Liberum and any of its Affiliates may enter into financing arrangements (including swaps, warrants or contracts for difference) with investors in connection with which Liberum and any of its Affiliates may from time to time acquire, hold or dispose of shares. Liberum does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM of the London Stock Exchange.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this Announcement.

UK Product Governance Requirements

Solely for the purposes of the product governance requirements contained within the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK Product Governance Rules"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any 'manufacturer' (for the purposes of the UK Product Governance Rules) 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 (a) retail clients, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the EUWA, (b) investors who meet the criteria of professional clients as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA and (c) eligible counterparties as defined in the FCA Handbook Conduct of Business Sourcebook ("COBS"); and (ii) eligible for distribution through all distribution channels as are permitted by Directive 2014/65/EU (the "UK Target Market Assessment"). Notwithstanding the UK 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 UK 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 UK Target Market Assessment, Liberum will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the UK Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of COBS; 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.

EU Product Governance Requirements

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; 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 Shares have been subject to a product approval process, which has determined that the Shares are: (i) compatible with an end target market of retail clients 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 "EU Target Market Assessment"). Notwithstanding the EU Target Market Assessment, distributors should note that: the price of the Shares may decline and investors could lose all or part of their investment; the Shares offer no guaranteed income and no capital protection; and an investment in the 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 EU 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 EU Target Market Assessment, Liberum will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the EU 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 Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Shares and determining appropriate distribution channels.

Notification under Section 309b(1)(c) of the Securities and Futures Act (Chapter 289) of Singapore

Unless otherwise stated in herein, all Placing Shares issued or to be issued shall be prescribed capital markets products (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

The notification below is made in accordance with the requirements of the EU Market Abuse Regulation.

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them.