No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Financial services WH Ireland said on Monday that it has entered into a conditional asset purchase agreement with Oberon Investments for the disposal of its wealth management unit for £1m in cash.
WH Ireland said that the disposal, which was subject to the satisfaction of certain conditions, was anticipated to be complete on or around 31 October, and comes as the division continues to be loss-making and would require "substantial investment" to achieve sustainable profitability. The proposed disposal also follows the sale of its capital markets division in July 2024.
The AIM-listed group also noted that the transaction constitutes a "fundamental change of business" under AIM Rule 15 and was, therefore, conditional upon shareholder approval at a general meeting. If approved, WH Ireland will have divested all of its trading business and activities and will be regarded as an AIM Rule 15 cash shell.
As such, WH Ireland will technically be required to make an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 within six months from the date of completion of the transaction. However, WH Ireland stated that given the board's intention to seek a delisting of its shares from AIM, it was not considering making any such acquisition.
WH Ireland added that the wealth management business had assets under management of £1.0bn as of 31 March, down from £1.2bn a year earlier, while group revenues fell from £21.5m to approximately £13.2m and group losses were expected to have widened from £5.9m in FY24 to about £9.2m in FY25, including a £6.1m impairment.
"The group continues to be loss-making on an underlying basis, with the directors' current expectations being for a further fall in annualised revenue to circa £8m for the 12 months ended 31 March 2026, in part due to its inability to grow revenue by attracting new teams and clients and retain its existing major revenue-generating staff. In addition, whilst some cost-cutting exercises have been implemented during the year, as a regulated and listed entity, the group's ability to cut costs any further is limited," said WH Ireland.
"With the divestment of the CM division and the planned sale of the Wealth Management business under the transaction, the group now intends to delist from the AIM market and commence a process of winding down its operations."
As of 0805 BST, WH Ireland shares were up 3.70% at 2.38p.
Reporting by Iain Gilbert at Sharecast.com
