Ten Lifestyle Group plc Admission Document tengroup.com Benefits Events Entertainment

141 Pages·2017·1.9 MB·English

Ten Lifestyle Group plc
Admission Document
Dining Travel
Benefits Events Entertainment
tengroup.com
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt
about the contents of this document or as to the action you should take, you should immediately consult
your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised
under FSMA if you are in the United Kingdom or, if not, you should immediately consult another appropriately
authorised independent professional adviser.
The Company, whose registered office appears on page 8and the Directors, whose names appear on page 8, accept
responsibility for the information contained in this document. To the best of the knowledge and belief of the Company
and the Directors (each of whom have taken all reasonable care to ensure that such is the case), the information
contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such
information.
This document, which comprises an AIM admission document, has been drawn up in accordance with the AIM Rules
for Companies. This document does not contain an offer of transferable securities to the public within the meaning of
section 85 and 102B of FSMA and is not a prospectus for the purposes of the Prospectus Rules. Accordingly, this
document has not been prepared in accordance with the Prospectus Rules, nor has it been approved by the FCA pursuant
to section 85 of FSMA and a copy has not been delivered to the FCA under regulation 3.2 of the Prospectus Rules.
Application will be made for the Enlarged Share Capital to be admitted to trading on AIM. Conditional dealings in the
Ordinary Shares are expected to commence on AIM at 8.00 a.m. (London time) on24November2017. It is expected
that Admission will become effective and that unconditional dealings will commence in the Ordinary Shares on AIM at
8.00a.m. on29November2017. All dealings in Ordinary Shares prior to the commencement of unconditional
dealings will be on a ‘‘when issued’’ basis and of no effect if Admission does not take place and will be at
the sole risk of the parties concerned. No application has been, or is currently intended to be, made for the
Ordinary Shares to be admitted to listing or trading on any other stock exchange.
AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk
tends to be attached than to larger or more established companies. AIM securities are not admitted to the
Official List of the UK Listing Authority. A prospective investor should be aware of the risks of investing in
such companies and should make the decision to invest only after careful consideration and, if appropriate,
consultation with an independent financial adviser. Each AIM company is required pursuant to the AIM Rules
for Companies to have a nominated adviser. The nominated adviser is required to make a declaration to the
London Stock Exchange on Admission in the form set out in Schedule Two to the AIM Rules for Nominated
Advisers. The London Stock Exchange has not itself examined or approved the contents of this document.
The AIM Rules for Companies are less demanding than those which apply to companies whose shares are
listed on the Official List. It is emphasised that no application is being made for admission of the Enlarged
Share Capital to the Official List or any other recognised investment exchange.
Your attention is drawn to the discussion of risks and other factors which should be considered in
connection with an investment in the Placing Shares set out in Part II (Risk Factors) of this document. All
statements regarding the Company and the Group’s future business should be viewed in light of these risk
factors. NOTWITHSTANDING THIS, PROSPECTIVE INVESTORS IN THE COMPANY SHOULD READ THE
WHOLE TEXT OF THIS DOCUMENT.
TEN LIFESTYLE GROUP PLC
(incorporated in England & Wales under the Company’s Act 2006 with registered number 08259177)
PROPOSED PLACING OF24,022,588ORDINARY SHARES AT134PENCE PER SHARE
ADMISSION OF THE ENLARGED SHARE CAPITAL TO TRADING ON AIM
Nominated Adviser and Broker
Jefferies
Jefferies International Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct
Authority, is acting exclusively for the Company as its nominated advisor and broker in connection with the proposed
Placing and Admission and is not acting for any other person or otherwise responsible to any other person (in each
case, whether or not a recipient of this document) for providing the protections afforded to customers of Jefferies or for
advising any other person in respect of the proposed Placing and Admission. Jefferies’ responsibilities as the Company’s
nominated advisor and broker under the AIM Rules for Nominated Advisers are owed solely to the London Stock
Exchange and are not owed to the Company or to any Director or to any other person in respect of such person’s
decision to acquire shares in the Company in reliance on any part of this document. No representation or warranty,
express or implied, is made by Jefferies as to any of the contents of this document (without limiting the statutory rights
of any person to whom this document is issued) and Jefferies has not authorised the contents of any part of this
document and accepts no liability whatsoever for the accuracy of any information or opinions contained in this document
or for the omission of any material information from this document for which the Company and the Directors are solely
responsible.
The whole of this document should be read. Your attention is drawn, in particular, to Part II: (Risk Factors)
for a more complete discussion of the factors that could affect the Company’s future performance and the
industry in which it will operate.
Copies of this document will be available free of charge during normal business hours on any day (except Saturdays,
Sundays and public holidays) at the registered office of the Company from the date of this document until the date
which is one month from the date of Admission. Additionally, an electronic version of this document will be available on
the Company’s website: www.tengroup.com.
This document does not constitute an offer to issue or sell, or the solicitation of any offer to subscribe for or buy, Ordinary
Shares in any jurisdiction where it may be unlawful to make such offer or solicitation. The distribution of this document
in certain jurisdictions may be restricted by law and therefore persons into whose possession this document comes
should inform themselves about and observe such restrictions. Any such distribution could result in a violation of the
laws of such jurisdictions. In particular, this document is not for distribution in or into the United States, Canada, Australia,
Japan or South Africa and is not for distribution directly or indirectly to any US Person. The Ordinary Shares have not
been and will not be registered under the US Securities Act, or under the securities legislation of, or with any securities
regulatory authority of, any state or other jurisdiction of the United States or under the applicable securities laws of any
province or territory of Canada or under the securities laws of Australia, Japan or South Africa.
United States securities law
The Ordinary Shares have not been and will not be registered under the Securities Act or the securities laws of any state
or other jurisdiction of the United States and may not be offered or sold except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
The Ordinary Shares are only being offered and sold outside the United States in “offshore transactions” within the
meaning of and pursuant to Regulation S. There will be no public offer of Ordinary Shares in the United States.
The Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission or by
any US state securities commission or authority, nor has any such US authority reviewed, approved or confirmed on
the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence.
An investment in the Company carries risk. Prospective investors should read the whole of this document
and should carefully consider whether an investment in Ordinary Shares is suitable for them in light of their
circumstances and financial resources. Your attention is particularly drawn to Part II (Risk Factors) of this
document which sets out certain risk factors relating to any investment in the Company. All statements
regarding the Company’s business, financial position and prospects should be viewed in the light of the risk
factors set out in Part II (Risk Factors) of this document. The contents of the Company’s website, including
any websites available from hyperlinks on the Company’s website, do not form part of this document.
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IMPORTANT NOTICE
The attention of prospective investors is drawn to the Risk Factors set out in Part II (Risk Factors)
of this document.
Investment in the Company will involve certain risks and special considerations. Prospective
investors should be able and willing to withstand the loss of their entire investment.
The price of the Ordinary Shares can go up as well as down.
The Ordinary Shares are suitable only for investors who understand or who have been advised
of, the potential risk of capital loss from an investment in the Ordinary Shares and for whom an
investment in the Ordinary Shares is part of a diversified investment portfolio and who fully
understand and are willing to assume the risks involved with an individual investment in such a
portfolio. There may be limited liquidity in the Ordinary Shares.
General
No broker, dealer or other person has been authorised by the Company, its Directors or Jefferies to issue
any advertisement or to give any information or make any representation in connection with the offering or
sale of any Ordinary Shares (including the Placing Shares) other than those contained in this document and
if issued, given or made, that advertisement, information or representation must not be relied upon as having
been authorised by the Company, its Directors or Jefferies.
Prospective investors should not treat the contents of this document as advice relating to legal, taxation,
investment or any other matters. Prospective investors should inform themselves as to: (a) the legal
requirements within their own countries for the purchase, holding, transfer, repurchase or other disposal of
Ordinary Shares; (b) any foreign exchange restrictions applicable to the purchase, holding, transfer,
repurchase or other disposal of Ordinary Shares which they might encounter; and (c) the income or other
taxation consequences which may apply in their own countries as a result of the purchase, holding transfer,
repurchase or other disposal of Ordinary Shares. Prospective investors must rely upon their own
representatives, including their own legal advisers and accountants as to legal, taxation, investment and
other related matters concerning the Company and an investment therein.
Statements made in this document are based on the law and practice currently in force in England and
Wales and are subject to change therein.
Forward-looking statements
Certain statements in this document are “forward-looking statements” including, without limitation,
statements containing the words “believes”, “anticipate”, “expect”, “target”, “estimate”, “will”, “may”,
“should”, “would”, “plan”, “goal”, “could”, “intend” and similar expressions. These forward-looking statements
are not based on historical facts but rather on the expectations of the Directors regarding the Company’s
future growth, results of operations, performance, future capital and other expenditures (including the
amount, nature and sources of funding thereof), planned expansion and business prospects and
opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and
are based on information currently available to the Directors. Forward-looking statements involve significant
known and unknown risks and uncertainties. A number of factors could cause actual results to differ
materially from the results discussed in the forward-looking statements, including risks associated with
vulnerability to general economic market and business conditions, competition, environmental and other
regulatory changes or actions by governmental authorities, the availability of capital, reliance on key
personnel, uninsured and underinsured losses and other factors, many of which are beyond the control of
the Company. Although the forward-looking statements contained in this document are based upon what
the Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results
will be consistent with these forward-looking statements.
These forward-looking statements speak only as at the date of this document. Subject to its legal and
regulatory obligations (including under the AIM Rules for Companies), the Company expressly disclaims any
obligations to update or revise any forward-looking statement contained herein to reflect any change in
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expectations with regard thereto or any change in events, conditions or circumstances on which any
statement is based.
Third party information
The data, statistics and information and other statements in this document regarding the markets in which
the Company operates, or its market position therein, is based upon the Company’s records or are taken
or derived from statistical data and information derived from the third-party sources described in this
document.
In relation to these third-party sources, such information has been accurately reproduced from the identified
information, and, so far as the Directors are aware and are able to ascertain from the information provided
by the suppliers of this information, no facts have been omitted which would render such information
inaccurate or misleading.
Time Zone
All times referred to in this document are, unless otherwise stated, references to London time.
Presentation of Financial Information
Various figures and percentages in tables in this document have been rounded and accordingly may not
total. Certain financial data has also been rounded. As a result of this rounding, the totals of data presented
in this document may vary slightly from the actual arithmetical totals of such data.
Currencies
Unless otherwise indicated, all references in this document to: (a) ‘‘GBP’’, ‘‘£’’, ‘‘pounds sterling’’,
‘‘pounds’’, ‘‘sterling’’, ‘‘pence’’ or ‘‘p’’ are to the lawful currency of the United Kingdom; (b) ‘‘US$’’, ‘‘US
Dollar’’, are to the lawful currency of the United States of America; and (c) ‘‘EUR’’, ‘‘E’’ are to the lawful
currency of the European Union.
No Incorporation of Website
The contents of the Company’s website (or any other website) do not form part of this document.
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TABLE OF CONTENTS
Page
EXPECTED TIMETABLE OF PRINCIPAL EVENTS 6
PLACING STATISTICS 7
DIRECTORS, SECRETARY AND ADVISERS 8
PART I: INFORMATION ON THE COMPANY 9
PART II: RISK FACTORS 33
PART III: ACCOUNTANTS’ REPORT AND HISTORICAL 47
FINANCIAL INFORMATION ON THE GROUP
PART IV: TERMS AND CONDITIONS OF THE PLACING 86
PART V: ADDITIONAL INFORMATION 96
DEFINITIONS 134
GLOSSARY 139
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EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of this document 24November2017
Commencement of conditional dealings in Ordinary Shares on AIM 8.00 a.m. on24November2017
Admission becomes effective and commencement of unconditional 8.00 a.m. on29November2017
dealings in the Enlarged Share Capital on AIM
CREST accounts expected to be credited (where applicable) in as soon as practicable after
respect of Placing Shares 8.00 a.m. on29November2017
Latest date definitive share certificates expected to be despatched in 13December2017
respect of the Placing Shares (where applicable)
Each of the times and dates in the above timetable is subject to change without further notice. All references
are to London time unless otherwise stated. Temporary documents of title will not be issued.
All dealings in the Ordinary Shares prior to the commencement of unconditional dealings will be
on a ‘‘when issued’’ basis, will be of no effect if Admission does not take place and will be at the
sole risk of the parties concerned.
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PLACING STATISTICS
Placing Price per Placing Share 134 pence
Number of Existing Ordinary Shares(1) 64,807,189
Number of New Shares to be issued by the Company pursuant to the Placing 13,432,836
Number of Sale Shares being sold by the Selling Shareholders pursuant to the Placing 10,589,752
Enlarged Share Capital immediately following Admission 78,240,025
Number of Options outstanding immediately following Admission 4,533,880
Number of Options outstanding immediately following theexercise of Options by 2,123,856
Andrew Long on the day after Admission(2)
Percentage of the Enlarged Share Capital represented by the Placing Shares 30.7per cent.
Percentage of the Enlarged Share Capital represented by the New Shares 17.2per cent.
Percentage of the Enlarged Share Capital represented by the Sale Shares 13.5per cent.
Percentage of the Enlarged Share Capital held by the Directors at Admission(3) 20.3per cent.
Percentage of Enlarged Share Capital represented by Options outstanding 5.8per cent.
at Admission(4)
Gross proceeds of the Placing, before expenses £32.2million
Gross proceeds of the Placing receivable by the Company, before expenses £18.0million
Estimated net proceeds of the Placing receivable by the Company, after expenses £16.0million
Gross proceeds of the Placing receivable by the Selling Shareholders, before £14.2million
expenses
Estimated net proceeds of the Placing receivable by the Selling Shareholders, £13.8million
after expenses
Market capitalisation on Admission at the Placing Price £104.8million
AIM symbol TENG
ISIN GB00BF188X60
SEDOL BF188X6
Notes
(1) Following the issue of14,282,333Ordinary Shares immediately prior to Admission pursuant to the Exercise and Conversion.
(2) The Company has receivedan irrevocablenotice ofexercise in respectof2,410,024Options held by Andrew Long whichwill,
subject to Admission occurring,be exercised on the day after Admission.
(3) Not including2,410,024Ordinary Shares which will, subject to Admission occurring, be issued to Andrew Long on the day after
Admission.
(4) Including2,410,024Optionswhich willbe exercised by Andrew Long on the day after Admissionfurther details of which are
outlined in paragraph 10.2ofPart V (Additional Information) of this document.
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DIRECTORS, SECRETARY AND ADVISERS
Directors: Bruce Weatherill (Independent Non-Executive Chairman)
Alex Cheatle (CEO (Group) and Co-Founder)
Andrew Long (CEO (Asia) and Co-Founder)
Sean Hegarty (Chief Financial Officer)
Sarah Hornbuckle (Client Services Director)
Julian (“Jules”) Pancholi (Independent Non-Executive Director)
Gillian Davies (Independent Non-Executive Director)
Company Secretary: Sean Hegarty
Registered office: Floor 2, 355 Euston Road, London, England NW1 3AL
Company No: 08259177
Nominated Adviser and Broker: Jefferies International Limited
Vintners Place
68 Upper Thames Street
London
EC4V 3BJ
Solicitors to the Company: Memery Crystal LLP
44 Southampton Buildings
London
WC2A 1AP
Solicitors to the Nominated Ashurst LLP
Adviser and Broker: Broadwalk House
5 Appold Street
London
EC2A 2HA
Auditors and Reporting BDO LLP
Accountants to the Company: 55 Baker St
London
W1U 7EU
Financial PR: Tavistock Communications Limited
1 Cornhill
London
EC3V 3ND
Registrar: Equiniti Limited
Aspect House
Spencer Road
Lancing
BN99 6DA
Company’s website: www.tengroup.com
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PART I
INFORMATION ON THE COMPANY
1. Introduction
Ten, founded in 1998, is a leading technology-enabled lifestyle and travel platform providing trusted concierge
services to the world’s wealthy, from the mass affluent through to HNWIs. Ten’s business focuses
predominantly on a corporate client model that includes private banks, retail banks, premium payment cards
providers and luxury brands that provide Ten’s services to segments of their premium individual customers,
who then become Ten members.
Ten assists its members to discover, organise and book travel, dining and live entertainment, seeking to
save them both time and money. Through Ten’s service proposition, members can achieve superior access,
experiences and outcomes, more cost-effectively and conveniently, than they could have achieved on their
own. Ten’s service is delivered through a combination of Ten’s proprietary technology platform and the
expertise of its Lifestyle Managers. As a result of making arrangements on behalf of its combined
membership base of wealthy individuals, Ten has access to better rates and/or enhanced benefits from its
suppliers compared to other existing service providers, both online and offline.
The majority of the Group’s revenue derives from service fees that are paid by its corporate clients, under
contracts typically of a multi-year duration of three years or more. Ten does not typically take a margin on
the goods and services it delivers to its members; this provides a competitive pricing advantage over
traditional service providers, such as ticket sellers or travel agents, who do typically add or make a margin.
The Directors believe that member satisfaction and the resulting impact of improving those members’ brand
affinity for Ten’s corporate clients, drives Ten’s long-term success.
The Directors consider there is significant market potential to support a large and growing number of the
world’s wealthy in their lifestyle and travel requirements. The population of HNWIs globally has risen from
10.0 million in 2006 to 13.6 million in 2016 and is expected to reach 18.7 million by 20261. The value of the
luxury travel sector is expected to grow from US$795 billion in 2016 to US$1,154 billion in 20222. The
Directors also believe that the live entertainment and premium dining markets will grow significantly.
Ten is a growing, global business that has increased net revenue at a compound annual growth rate of
29 per cent. over the last three years. In the last reported financial year to 31 August 2017, the Group’s net
revenue increased by 37 per cent. to £33.2 million. The Group has demonstrated strong profitability in its
more mature EMEA business achieving an EBITA margin of 23 per cent. in FY17. Ten is currently expanding
its international presence and investing in other regions, including The Americas and Asia. In these newer
markets, Ten is developing its corporate client and supplier base and operational infrastructure, to build
scale and drive efficiencies with the objective of achieving margins similar to those currently achieved in the
more mature EMEA business. The Directors believe that, as Ten grows its scale and global service offering,
underpinned by improvements in, and increased adoption of its technology-enabled platform, the unit cost
of delivery will be reduced whilst enhancing service standards and personalisation.
The Group employs over 650 staff across 20 offices globally and benefits from an experienced executive
management team with a strong background in digital media, technology and premium service delivery.
Underpinned by investments in technology, this team has successfully developed and expanded the Group’s
business and is well-positioned to continue to pursue Ten’s growth strategy.
The Directors believe Ten’s model produces a powerful competitive advantage that will drive the Group’s
objective of becoming the most trusted and pre-eminent provider of global lifestyle and travel concierge
services to the world’s wealthy. In addition, the Directors envisage the market for the Group’s services will
increase in breadth and scope as more of the world’s wealthy and mass affluent use concierge services for
their lifestyle and travel needs.
1Knight Frank – The Wealth Report 2017 (11th Edition)
2Allied Market Research – Luxury Travel Market – Global Opportunity Analysis and Industry Forecast 2014-2022
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