Smoove AIM:SMV, the AIM-listed, software company providing data platforms to conveyancers, mortgage brokers and home-movers, has announced a tender offer to repurchase 12.5 million Ordinary Shares at 40p a share, constituting a repurchase of GBP5m.
As previously reported Smoove – despite continuing to post losses (GBP3m for the six months to 30th September up from a loss of GBP1.5m for the corresponding period in 2021) – had a reasonable half-year, increasing revenue by 4% to GBP10.6m compared to GBP10.2m in 1H21. However, margins were down marginally to 38.4% from 40%. The company attributed this to “changes in business mix.” The company had a positive cash balance of GBP17m, with no debt. However, with mortgage rates up and house prices falling, the sector is looking vulnerable going into 2023.
Smoove will be posting a circular on Friday (2nd December) which will outline the tender offer, along with a notice for a general meeting in 11th January 2023 where the resolution to repurchase the share will be voted upon.
Smoove share buy-back
The buy-back will be for about 19.3% of Smoove’s total issued capital as at 28th November 2022 and will be for up to GBP5m in cash. Panmure Gordon will handle the transaction, and on receipt of issued shares it is likely that the repurchased shares will be cancelled and the balance transferred to Smoove’s treasury.
The tender offer will close at 13:00 on 9th January 2023 and all tenders to sell must be received by that time.
The tender price of 40p represents a 20.1% premium on the closing price of 33.3p as at 28th November, or a premium of 19.3% over the one-month volume weighted average price to 28th November. There is no stipulation for shareholders to sell any excess to their individual tender entitlements, however, the company’s directors will not participate in the tender.
In a statement to the London Stock Exchange, the company said: “Whilst the board believes that the tender offer is the best way to achieve a balance between an immediate return of capital to shareholders whilst retaining funds to support value creating new products and business improvements, the board makes no recommendation to shareholders as to whether tendering ordinary shares under the tender offer is in their own individual best interests.”The process should be completed by 12th January 2023 with CREST accounts credited by or before 16th January and cheques and balancing share certificates sent out after 23rd January.
Smoove’s shares opened trading this morning (30th November) at 35.8p. Shares opened the week at 33p and had risen to 37p yesterday, before falling back again. The shares have ranged between 27p and 88.81p over 52-weeks, offering a year-to-date return of -55.5% and a one-year return of -49.4% giving the Smoove a market capitalisation of GBP23.2m.
