Proactis Holdings PLC (LON:PHD)), the global spend management solution provider, announced today the conclusion of the formal sale process announced on 29 July 2019.
The FSP was commenced to enable the Board, in an orderly fashion, to explore a number of approaches and expressions of interest which the Board considered had the potential to provide benefit to the Group’s stakeholders. A comprehensive process was run to assess the credibility of interested parties and their ability to deliver an offer or strategic outcome that could be recommended to shareholders. This has not led to any firm proposals being received and it is unlikely that prolonging this process will deliver a proposal that the Board would be willing to recommend to shareholders.
The Board is mindful of the potential commercial and management distraction that a protracted FSP could present to the Group and also of its encouraging prospects (as illustrated by the Group’s 44% increase in total contract value of new business sold during the 6 month period ended 31 January 2020 as described within the trading update dated 20 February 2020). This rate of new business has continued during February 2020 and the Group has now signed approximately £9.4m of total contract value, cumulatively, during the seven months ended 29 February 2020 (as a comparative, the Group signed £11.3m for the whole financial year ended 31 July 2019).
The Board is confident that the right business strategy is in place and some of the benefits of this are becoming evident already. Furthermore, the Board will continue to focus on cost control and to review non-core aspects of the business with a view to reducing net debt further. The Board considers that superior shareholder value will be achieved by focussing the Group’s efforts on delivery of this strategy rather than by engaging in the FSP at this time. For this reason, the Board has concluded the FSP and the Company is no longer in an “offer period” as defined by the Code.
The Board recognises that this decision will not have achieved the desired outcome for some shareholders and the Board is committed to working with those shareholders to facilitate their objectives, where possible.
Alongside this, the Board has committed to make certain changes to its corporate governance infrastructure, including:
– To transition to a position within twelve months where, in accordance with the UK Governance Code, at least half of the Board, excluding the Chair, are independent non-executive directors;
– To amend the Company’s Articles of Association at the next General Meeting to require annual re-election for every director; and
– To review the Group’s reporting key performance indicators in order to provide greater transparency and granularity as the Group returns to growth.
Tim Sykes, CEO, commented:
“We believe we have come to the right conclusion for our shareholders as a whole, considering the clear progress that has been made in the business and the opportunities that we have ahead of us.
“The business strategy that we have established is being implemented and is delivering encouraging early indicators. As communicated within our recent trading update, we have delivered a significant improvement in new business and dramatically improved retention rates and we expect a return to revenue growth in the second half of this financial year. Our progress in the short-term has been encouraging and we are confident that the long-term prospects are significant.”