Company Announcements

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

30 January 2023

Impellam Group plc

("Impellam" or the "Company" or the "Group")

Disposal of Regional Specialist Staffing and Healthcare and 2022 Trading Update

Impellam Group plc (AIM: IPEL) announces that it has entered into an agreement to sell its  Regional Specialist Staffing businesses in the UK (Tate, Blue Arrow Group, Chadwick Nott, Career Teachers) and its Healthcare Staffing business  in the UK, Ireland and APAC (Medacs Global Group) to Twenty20 Capital, one of Europe's largest specialist investment funds focussed in the human capital services sector, for cash consideration of £85m on a debt-free, cash-free, normalised working capital basis (the "Transaction").

In the year ended 1 January 2022, the Medacs Global Group, Blue Arrow Group, Tate, Chadwick Nott and Career Teachers businesses generated aggregated revenue of £628.0m, gross profit of £93.2m and operating profit of £4.3m.  Aggregated net assets as of 30 June 2022 (before the apportionment of associated acquired intangibles) were approximately £51.0m, which included cash of £26.4m which will be retained by Impellam as part of the Transaction.

Impellam expects the Transaction will complete in early March 2023.

During 2022 the Board of Impellam was pleased to declare two special dividends to return a total of £50m to shareholders.   Following completion of the Transaction, the Company intends to declare a further special dividend of approximately £35m (77.7 pence per share) the payment of which would bring the distribution from these special dividends to £1.87 per share. A further announcement is expected to  be released in early March 2023 to confirm the  completion of the Transaction and the declaration of the dividend and its associated payment.  The Impellam Board is also pleased to announce its intention, subject to the Group's trading performance, to re-commence the payment of annual dividends, starting in January 2024 of £25m. This represents an 8.25% forward yield based on closing share price on 27 January 2023.

In April 2022, the Company announced that Lord Ashcroft, Chairman and 62% shareholder, had notified the Impellam Board that he intended to explore options to sell his shareholding in the Company.  Following this announcement, the Company entered an "offer period" as defined by the City Code on Takeovers and Mergers.  Since then, the Company has been working alongside Lord Ashcroft to ensure that the interests of all shareholders are properly considered.  Lord Ashcroft has confirmed that, whilst he has noted the value that has been returned to Impellam shareholders recently via special dividends and the dividend that is intended to be distributed following the completion of the Transaction, he continues to explore his options.  A further update on this process will be provided when appropriate.

Furthermore, the Company is pleased to update on full year trading for the entire Group for the financial year ended 31 December 2022 ("FY 2022"). The Company expects to report annual gross profit of £315m in FY 2022, being like for like growth of 23.7% compared to FY 2021.  The Group had a strong finish to the year and the Board expects to report financial performance for FY22 ahead of its original expectations.

Julia Robertson, Chief Executive Officer commented:

"We recognise and are very grateful for the hard work and contribution that our Regional Specialist Staffing and Healthcare businesses have made to our Group, and we wish them every success in the next phase of their journey under exciting new ownership.

The investment case for Impellam is enhanced by this transaction with a focus on key growth markets and verticals creating  increased agility and efficiency to deliver higher margins and return on capital.   The company is now a digitally enabled and collaborative workforce solutions and specialist recruitment group dedicated to Managed Services and STEM which represented 70% of the group's 2022 revenues.  The STEM and Global Managed Services brands which include Lorien (IT and Digital), SRG (Life Sciences), Carbon60 and Bartech (Engineering) and Guidant Global and Comensura (Managed Services) are well positioned as leaders in their respective markets providing strong growth and international expansion opportunities both now and into the future. 

Impellam's award winning Global Managed Services businesses (Guidant Global, Barpellam, Lorien and Comensura) provide a diverse range of workforce solutions to household brands across the UK and Europe, APAC and North America. They are upper quadrant industry leaders in Managed Service Provision and SOW with over £4bn SUM (Spend under Management). The STEM businesses  have a wealth of specialist experience providing contract, permanent and SOW workforce solutions to our customers.  By bringing together the skill sets of IT and digital specialists, scientists, clinicians and engineers, they innovate and solve some of the world's toughest problems by believing in the power of work to create a better future."

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.

Enquiries:

Note to Editors:

Impellam Group is a connected group providing global workforce and specialist recruitment solutions. Our operations span time zones across 70 locations in North America, Asia Pacific, the UK and Europe. With 14 businesses, we are the largest workforce and specialist recruitment solutions group in the UK and the eighth largest in the world.  Every year, we connect carefully chosen candidates with good work at all levels. Our candidates include technology and digital specialists, scientists, clinical experts, engineers, nurses, doctors, lawyers, teachers, receptionists, drivers, chefs, administrators, warehouse and call centre operatives.

For more information about Impellam Group please visit:    www.impellam.com

Twenty20 Capital is one of Europe's largest specialist investment funds focussed in the human capital services sector. Its portfolio includes The Recruitment Co, Staffgroup, HCRG, HCRG Care Group, HCRG Medical Services, HCL Workforce Solutions, Sugarman Group, Affinity Workforce Solutions and Halian.

For more information about Twenty20 Capital please visit: https://twenty20capital.com

Rule 26.1 disclosure:

In accordance with Rule 26.1 of the City Code on Takeovers and Mergers, a copy of this announcement will be available on the investor section of the Company's website at https://investors.impellam.com/ by no later than 12 noon (London time) on the business day immediately following the date of this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.