Result of AGM

30th June 2016/in , /by

Watchstone Group plc
(“Watchstone” or the “Company” or the “Group”)

Watchstone (LON:WTG) announces that all resolutions at its Annual General Meeting, held earlier today, were duly passed.

Holding(s) in Company

23rd June 2016/in , /by
TR-1: Notification of major interest in sharesi
1. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attached:ii WATCHSTONE GROUP PLC
2. Reason for the notification (please tick the appropriate box or boxes):
An acquisition or disposal of voting rights  X
An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached
An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments
An event changing the breakdown of voting rights
Other (please specify):
3. Full name of person(s) subject to the notification obligation:iii BEACH POINT CAPITAL MANAGEMENT LP
4. Full name of shareholder(s) (if different from 3.):iv
5. Date of the transaction and date on which the threshold is crossed or reached:v 22 JUNE 2016
6. Date on which issuer notified: 23 JUNE 2016
7. Threshold(s) that is/are crossed or reached: vi, vii 10%
8. Notified details:
A: Voting rights attached to sharesviii, ix
Class/type of shares

if possible using the ISIN CODE

 Situation previous to the triggering transaction Resulting situation after the triggering transaction
Number of Shares Number of Voting Rights Number of shares Number of voting rights % of voting rights x
Direct Directxi Indirectxii Direct Indirect
 GB00BYNBFN51  4,388,824  4,388,824  4,895,099  4,895,099  10.68
B: Qualifying Financial Instruments
Resulting situation after the triggering transaction
Type of financial instrument Expiration date xiii Exercise/Conversion Period xiv Number of voting rights that may be acquired if the instrument is exercised/ converted. % of voting rights
C: Financial Instruments with similar economic effect to Qualifying Financial Instruments xv, xvi
Resulting situation after the triggering transaction
Type of financial instrument Exercise price Expiration datexvii Exercise/Conversion periodxviii Number of voting rights instrument refers to % of voting rightsxix, xx
Nominal Delta
Total (A+B+C)
Number of voting rights Percentage of voting rights
4,895,099 10.68
9. Chain of controlled undertakings through which the voting rights and/or the financial instruments are effectively held, if applicable:xxi
Proxy Voting:
10. Name of the proxy holder: N/A
11. Number of voting rights proxy holder will cease to hold: N/A
12. Date on which proxy holder will cease to hold voting rights: N/A
13. Additional information:
14. Contact name: Khoa D. Le
15. Contact telephone number: +001 310 996 9657

 

Update

14th June 2016/in , /by

Watchstone Group plc
(“Watchstone” or the “Company” or the “Group”)

Approval of the Settlement of Navseeker litigation

Further to its announcement on 5 March 2015, Watchstone (LON:WTG) confirms that it has now received the approval of the Court of Chancery of the State of Delaware USA (“Court”), in respect of the settlement of litigation in respect of Navseeker Inc (“Navseeker”), a subsidiary of Hubio Solutions Limited (formerly Himex Limited)(“HSL”). HSL is a wholly owned subsidiary of the Company. 

The approval of the Court concludes the agreement of terms with the Plaintiffs for the settlement of litigation (Laurence Baker, et al. v. Hassan Sadiq, et al. and NavSeeker, Inc. C.A. No. 9464-VCL, Court of Chancery of the State of Delaware USA)(“Litigation”) and the associated acquisition of 11.67 per cent. of Navseeker not already held by the Company. The settlement has been made without admission of liability. The Company has been advised that the Plaintiffs’ claims had no merit and the Litigation was being strenuously defended. However, given the alternative of an expensive and protracted continuation of US based litigation, the Board has determined that settlement is the best course of action in the circumstances. Notwithstanding the Board’s belief in the strength of its defence to the Litigation, its outcome would still have been subject to the usual uncertainty that is an inherent part of any civil litigation.

Given the time that has elapsed since the provisional agreement of the settlement detailed on 5 March 2015 (“Proposed Settlement”), the Company has agreed, and the Court has approved, to a change to the Proposed Settlement. The Company will now settle the Litigation and acquire the shares in Navseeker held by the Plaintiffs and any other participating minority shareholder for a total contribution from the Company, HSL and/or the Individual Defendants and/or their insurance carriers of US$2.75 million in cash and will not now issue any shares in the Company as part settlement (“Approved Settlement”).

Instead of issuing 684,770 pre-consolidation new ordinary shares of 15p each with accrued capital return proceeds of approximately £616,293 (“Settlement Shares”) pursuant to the Proposed Settlement, the Approved Settlement replaces the issue of the Settlement Shares with an increase of US$1 million in cash (included in theUS$2.75 million in cash detailed above).

Block listing Review

10th June 2016/in , /by

BLOCK LISTING SIX MONTHLY RETURN

Date: 10 June 2016

Name of applicant: Watchstone Group plc
Name of scheme: Company Share Option Scheme
Period of return: From: 11 December 2015 To: 10 June 2016
Balance of unallotted securities under scheme(s) from previous return: Company Share Option Scheme – NIL
Plus: The amount by which the block scheme(s) has been increased since the date of the last return (if any increase has been applied for): Company Share Option Scheme – 6,065,341
Less: Number of securities issued/allotted under scheme(s) during period (see LR3.5.7G): Company Share Option Scheme – 6,065,341
Equals: Balance under scheme(s) not yet issued/allotted at end of period: Company Share Option Scheme – NIL
Name of contact: Stefan Borson
Telephone number of contact: 03333 448048

Holding(s) in Company

2nd June 2016/in , /by
TR-1: Notification of major interest in sharesi
1. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attached:ii Watchstone Group PLC
2. Reason for the notification (please tick the appropriate box or boxes):
An acquisition or disposal of voting rights  X
An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached
An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments  X
An event changing the breakdown of voting rights
Other (please specify):
3. Full name of person(s) subject to the notification obligation:iii Dialectic Capital Management, LP
4. Full name of shareholder(s) (if different from 3.):iv
5. Date of the transaction and date on which the threshold is crossed or reached:v 27 May 2016
6. Date on which issuer notified: 1 June 2016
7. Threshold(s) that is/are crossed or reached: vi, vii 5%
8. Notified details:
A: Voting rights attached to sharesviii, ix
Class/type of shares

if possible using the ISIN CODE

 Situation previous to the triggering transaction Resulting situation after the triggering transaction
Number of Shares Number of Voting Rights Number of shares Number of voting rights % of voting rights x
Direct Directxi Indirectxii Direct Indirect
B: Qualifying Financial Instruments
Resulting situation after the triggering transaction
Type of financial instrument Expiration date xiii Exercise/Conversion Period xiv Number of voting rights that may be acquired if the instrument is exercised/ converted. % of voting rights
C: Financial Instruments with similar economic effect to Qualifying Financial Instruments xv, xvi
Resulting situation after the triggering transaction
Type of financial instrument Exercise price Expiration datexvii Exercise/Conversion periodxviii Number of voting rights instrument refers to % of voting rightsxix, xx
 CFD 2,307,438 Nominal Delta
 2,307,438  2,307,438
Total (A+B+C)
Number of voting rights Percentage of voting rights
2,307,438 5.012%
9. Chain of controlled undertakings through which the voting rights and/or the financial instruments are effectively held, if applicable:xxi
Proxy Voting:
10. Name of the proxy holder:
11. Number of voting rights proxy holder will cease to hold:
12. Date on which proxy holder will cease to hold voting rights:
13. Additional information:
14. Contact name: Bernadette Murphy, Chief Compliance Officer
15. Contact telephone number: 212-230-3220

 

Results for the year ended 31 December 2015

27th May 2016/in , /by

Watchstone Group plc
(“Watchstone” or the “Company” or the “Group”)

Watchstone (AIM:WTG.L) today announces its results for the year ended 31 December 2015, a period of radical change for the Group.

Financial summary:

  • Underlying* business revenues steady at £58.3m (2014: £56.5m)
  • Underlying EBITDA loss of £16.1m (2014: loss of £16.8m)
  • Disposal of the Professional Services Division generated a profit of £494.3m
  • Impairment of goodwill and other intangible and non-cash assets – total charge of £113.5m (2014: £129.1m). Further details of the impairments can be found in notes 6 and 7 to the financial information in this announcement
  • Total profit after tax £274.9m (2014: loss of £374.5m)
  • Group net assets (excluding contingent liabilities) of £137.1m representing approximately 297 pence per share following capital return of £411.9m
  • Group cash at 31 December 2015 of £103.2m including £97.6m in the Company. Group cashof £93.1m (unaudited) as at 20 May 2016 including cash in the Company of £86.9m (unaudited) with a further £50.0m (unaudited) in escrow.

* Underlying includes ptHealth, Hubio, Ingenie, BAS, Maine Finance and Central

Operational highlights:

  • Disposal of the Professional Services Division for £645m plus deferred contingent consideration completed in May 2015
  • Court approved capital return of 90 pence per ordinary share completed in December 2015
  • New Group CEO and Board in place which has brought stability and started to rebuild investor confidence
  • Substantial work completed and on-going to simplify the Group, reduce the Group’s losses and build the platform to deliver the best possible shareholder value from all the Group’s operational and other assets
  • Clear strategy and plan for all Group businesses – energetically pursuing opportunities and robustly dealing with challenges

Current trading (unaudited):

  • Overall trading is in line with expectations with some good momentum in ptHealth, ingenie and BAS
  • ptHealth has had a solid start to the year
    • Unaudited revenue of £6.6m in Q1 2016 (an increase of 4.4% vs. Q1 2015 (excluding exchange rate fluctuations) from a reduced number of clinics)
    • Average revenue per clinic up 12% in Q1 2016 compared to the same period in 2015 o Assessment and treatment numbers have increased by 11% and 7% respectively during the same period
    • Launch of InnoCare as a spin out of ptHealth
  • ingenie performing strongly in Q1 2016
    • Gross Written Premium up 23% to £20.7m in Q1 2016 (Q1 2015: £16.8m)
    • Policies written up 19% to 10,706 in Q1 2016 (Q1 2015: 8,985)
    • Approximately 39,700 policies in force at 31 March 2016 (31 March 2015: 34,515)
  • Hubio stable but historic growth expectations proven to be unrealistic- business being reshaped in line with market opportunities
    • Unaudited Q1 2016 revenue of £4.3m (Q1 2015: £4.1m)
    • Active devices as at 30 April 2016 was 38,631, 77% more than at 30 April 2015 this was largely recovering from technical issues with a large customer in the US
  • BAS is now cash generative whilst work continues to improve Maine Finance and quotesupermarket.com
    • Unaudited BAS revenues for Q1 2016 of £0.8m, an increase of 21% on the same period in 2015 and the business is now cash generative
    • Unaudited Q1 2016 total revenue for Maine Finance and quotesupermarket.com was £0.4m (Q1 2015: £0.5m)

Indro Mukerjee, Group Chief Executive Officer said: “Even taking the legacy, non-operational matters to one side, the Group I joined in September 2015 was disproportionately complex and needed operational improvement. At the same time, I have found a number of good examples of advanced technology capabilities; capable people; and healthy market positions across our operating companies. I believe we have made strong progress towards our key objectives in the last three quarters and there is demonstrable momentum in our ptHealth/InnoCare, ingenie and BAS businesses with a strong determination to continue to set Hubio and Maine Finance/QSM on paths to maximise their potential.”

Richard Rose, Non-executive Chairman said: “I am very pleased with the significant progress the Group has made over the course of the last twelve months. The new Board has successfully refocused the Group’s strategic priorities while drawing a line under the past by working tirelessly to deliver the highest standards of corporate governance. The sale of our legal services business and the significant return of value to investors marked the start of rebuilding shareholder confidence and we are confident of continuing to deliver value. Watchstone now has solid foundations on which to build further and the Board and the management team are committed to maximising the potential of the remaining businesses.”

The Annual Report and Accounts for the year ended 31 December 2015, Notice of the Annual General Meeting (“AGM”) and a Form of Proxy will be posted to registered shareholders.

The AGM is to be held at 10.00am on 30 June 2016 at Plaza Suites 1 – 3, 200 Westminster Bridge Road, London SE1 7UT. Following the AGM, there will be a product demonstration and showcase from the Group’s companies.

These results have been extracted from the Annual Report and Accounts for the year ended 31 December 2015, a full version of which is available at www.watchstonegroup.com/investors.

Click here for the full RNS announcement (25 pages)

Statement re Share Price Movement

18th April 2016/in , /by

Watchstone Group plc
(“Watchstone” or the “Company” or the “Group”)

Watchstone (LON:WTG) notes the recent share price rise and can confirm that the Company has recently received a draft and highly conditional, non-cash proposal from a private company (the “Draft Proposal”) for all of the assets (but excluding the actual and contingent liabilities) of the Group. The Board has rejected the Draft Proposal as being unworkeable but the correspondence may or may not lead to a further proposal being made to the Company.

The Company will provide more information as and when appropriate.

Management Incentive and Retention Plan

21st March 2016/in , /by

Watchstone Group plc
(“Watchstone” or the “Company” or the “Group”)

Watchstone (LON:WTG) announces that it has implemented a new management incentive and retention plan (“Plan”), adopted by the Board on the recommendation of the Company’s Remuneration Committee following independent external advice and consultation with major shareholders. Grants under the Plan have been made to a number of key executives none of whom are members of the Company’s Remuneration Committee (“Participants”).  The Board (excluding any Participants) believes that the Plan is in the best interests of the Company and its shareholders.

Richard Rose, Non-executive Chairman said; “After taking extensive advice and following consultation with shareholders, we have designed an executive incentive plan that is rooted in the creation of value for all shareholders. The Plan recognises the Group’s complex history and its diverse nature following the disposal of the  Professional Services Division. Against this backdrop, the Board decided to implement a cash-based scheme, focussed on delivering growth in the value of the Company’s operating businesses going forward without penalising, or enhancing returns for, management in respect of historic matters. Accordingly, the Board will not grant share options to the Participants.”

The Plan is a cash-based incentive and retention scheme that will only be triggered upon value-crystallising events (including, inter alia, a takeover of the Group or disposals of individual divisions) in excess of base values. A market price of 250 pence per share (being approximately a 18.5% premium to the closing share price on 18 March 2016) for the Group as a whole (including all its assets and liabilities) has been used to ascribe a base value to each division (“Hurdle”). The Hurdle will be adjusted, inter alia, for cash invested by the Group and dividends or other proceeds paid to the Group by the respective divisions. The benefits paid pursuant to the Plan (if any) will specifically exclude the impact of, or adjustment for:

  1. the Company’s current cash balances (amounting to approximately £95m at 31 December 2015, equating to approximately 98% of the current market capitalisation);
  2. the cash to be released from escrow at the end of 2016 and the deferred contingent consideration payable pursuant to the disposal of the Professional Services Division; and
  3. any cash paid to resolve liabilities relating to events which occurred prior to the appointment of the new Board of the Company on 29 May 2015.

Participants will be entitled to a share of up to a total of 9.5‎% of any growth in value of each division of the Group above the Hurdle (as adjusted for cash invested or generated from 1 January 2016).

Indro Mukerjee, Group Chief Executive Officer and Mark Williams, Group Finance Director, are Participants and Directors and, accordingly, the potential payments to each of them are related party transactions pursuant to Rule 13 of the AIM Rules. In addition, Stefan Borson, Group General Counsel & Company Secretary, is also a Participant.

  1. Indro Mukerjee’s will be entitled to up to 5% of any growth in value of each division of the Group above the Hurdle (as adjusted for cash invested or generated from 1 January 2016); and
  2. Mark Williams and Stefan Borson will each be entitled to up to 2.25% of any growth in value of each division of the Group above the Hurdle (as adjusted for cash invested or generated from 1 January 2016).

The Board (with the exception of Mr Mukerjee and Mr Williams, the related parties pursuant to the AIM Rules), having consulted with Peel Hunt LLP, in its capacity as the Company’s nominated adviser, believe that the terms of the Plan are fair and reasonable insofar as the Company’s shareholders are concerned.

 

Disposal/Related Party Transaction

7th March 2016/in , /by

Watchstone Group plc
(“Watchstone” or the “Company” or the “Group”)

Watchstone (LON:WTG) announces that as part of its continuing programme of actions to strategically focus the Group on key growth areas, it has entered into an agreement to dispose of the entire issued share capital of Quintica Holdings Limited (“Quintica”), a reseller and integrator of software to the telecoms industries, to Quintica International Holdings Inc (“QIH”) (a company owned by Charles Osburn, a statutory director of Quintica) for approximately £1.35 million (the “Agreement”). In addition, Watchstone will be entitled to additional consideration in the event that Quintica is disposed of (in whole or part) by QIH in the year following completion of the transaction.

For the year ended 31 December 2015, Quintica recorded an unaudited loss before tax of approximately £1.9 million (2014: £2.1 million loss).

Following a review of the business by the Board, it was concluded that Quintica was non core, as it does not fit with the Group’s current strategy and focus and due to its historical performance and associated cash funding requirements. Against that backdrop, the Board believes a disposal is in the best interest of the Group.

Under the Agreement, the Group will receive £1 million cash (£500,000 payable immediately and £500,000 due by 1 January 2017), plus the repayment of intra-company debt of US$500,000 (approximately £350,000).

The Agreement is a related party transaction pursuant to the AIM Rules for Companies as Charles Osburn is a director of Quintica.

The Board considers, having consulted with the Company’s nominated adviser, Peel Hunt LLP, that the terms of the Agreement are fair and reasonable insofar as the Company’s shareholders are concerned.

When Quintica was acquired in September 2012, the consideration was largely satisfied in Ordinary Shares in the Company, giving rise to goodwill of £5.9 million. The Group is expected to recognise an overall loss on the disposal of Quintica of approximately £5.7 million for the year ended 31 December 2015, due to goodwill impairment. This impairment would have been recognised irrespective of the disposal.

Disposal/Related Party Transaction

8th January 2016/in , /by

Watchstone Group plc
(“Watchstone” or the “Company” or the “Group”)

Watchstone (LON:WTG) announces that as part of a programme of actions to strategically focus the Group on its key growth areas, it has disposed of the Group’s property and maintenance services businesses. The Company’s subsidiary Brand Extension (UK) Limited (“BEL”) has entered into an agreement to dispose of the entire issued share capital of B.E. Insulated (UK) Limited (“BEI”) and Carbon Reduction Company (UK) Limited (“CRC”) for a nominal consideration of £1 to The BE Smart Group Limited (a company owned by Ben Williams, a statutory director of BEI and CRC) (“Agreement”). Following the completion of this Agreement, the Group will cease to operate directly in the property and maintenance services sector.

BEI is predominantly a property insulation supply and installation business and CRC is a provider of property maintenance services. Since acquisition, the performance of both BEI and CRC has been below expectations due to recent unforeseeable changes to the market and, as a result, have been loss making. The businesses operate in markets where unexpected changes to government legislation in the funding of green, solar and other initiatives have substantially impacted trading and, in the view of the Board, the likely ongoing performance and prospects of the businesses.

The terms of the Agreement reflect the on-going cash losses and investment requirements of BEI and CRC. In deciding to dispose of these businesses for nominal consideration over closing them, the Directors were mindful, in particular, of BEI and CRC’s 62 employees, its creditors and other liabilities.

The Board believes that the disposal will save the Company between £1.5 million to £2.0 million on an annualised basis. For BEI and CRC and their staff, it will allow the businesses to operate under a more appropriate ownership structure.

Taking all these factors into account, the Directors have concluded that the disposal is in the best interests of all stakeholders.

The Agreement is a related party transaction pursuant to the AIM Rules for Companies as Ben Williams is a director of BEI and CRC.

For the period ended 30 September 2014, the profits of BEI and CRC were approximately £1 million. BEL acquired the 50% of the issued share capital it did not own in BEI and the entire issued share capital of CRC from Ben Williams in March 2015.

The Directors consider, having consulted with the Company’s nominated adviser, Peel Hunt LLP, that the terms of the Agreement are fair and reasonable insofar as the Company’s shareholders are concerned. The Agreement does not impact the historic warranties and indemnities given by Ben Williams in March 2015 in respect of the acquisition of 50% of BEI and the entire share capital of CRC.

The Group is expected to recognise an overall loss on disposal of approximately £4.2 million for the year ended 31 December 2015, some £4.3 million of this will comprise goodwill which has already been impaired in the first half of 2015 with the balance of approximately £0.1 million representing a small net profit on disposal of the remaining net assets disposed of.

Indro Mukerjee, Group Chief Executive Officer, said: “The strong focus on quickly addressing losses is central to our work and we’ve been making good progress overall. We’ve acted with integrity and speed to realise significant cost savings, while removing liabilities and enabling us to continue with the further work on the transformation of Watchstone”