Morses Club PLC Admission Document Placing and admission to trading on AIM c112030 Cover spread.indd 1 27/04/2016 16:11 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) (‘‘FSMA’’) if you are in the United Kingdom, or, if not, from another appropriately authorised independent professional adviser. This document comprises an admission document prepared in accordance with the AIM Rules for Companies. Application has been made for the whole of the ordinary share capital of Morses Club PLC (‘‘Company’’) to be admitted to trading on AIM (‘‘AIM’’), a market operated by London Stock Exchange plc (‘‘London Stock Exchange’’). Application has been made for the Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings will commence in the Ordinary Shares on 5 May 2016. The ordinary share capital of the Company is not dealt on any other recognised investment exchange and no application has been or is being made for any such admission to any such exchange. This document does not constitute a prospectus within the meaning of section 85 of FSMA, has not been drawn up in accordance with the Prospectus Rules published by the Financial Conduct Authority (‘‘FCA’’) and a copy of this document has not been, and will not be, filed or reviewed by the FCA or any other competent authority. 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 United Kingdom Listing Authority. A prospective investor should be aware of the potential risks in 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 London Stock Exchange on admission in the form set out in Schedule Two to the AIM Rules for Nominated Advisers. London Stock Exchange has not itself examined or approved the contents of this document. The whole of the text of this document should be read. The attention of prospective investors is drawn especially to the Risk Factors set out in Part 2 of this document. All statements regarding the Company’s business, financial position and prospects should be viewed in light of these risk factors. MORSES CLUB PLC (Incorporated and registered in England and Wales with registered number 06793980) Placing of 63,455,000 existing Ordinary Shares at 108 pence per Ordinary Share and Admission to trading on AIM NOMINATED ADVISER AND JOINT BOOKRUNNER Numis Securities Limited JOINT BOOKRUNNER Panmure Gordon (UK) Limited FINANCIAL ADVISER Deloitte Corporate Finance The directors of the Company whose names appear on page 6 of this document and the Company accept responsibility both individually and collectively for the information contained in this document. To the best of the knowledge and belief of those directors and the Company (who 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. All of the Ordinary Shares, including the Placing Shares, will, upon Admission, rank equally in all respects, including the right to receive all dividends or other distributions thereafter declared, made or paid. This document does not constitute an offer to issue or sell or the solicitation of an offer to buy securities in any jurisdiction in which such an offer or solicitation is unlawful. The Ordinary Shares have not and will not be registered under the United States Securities Act of 1933, as amended (the ‘‘Securities Act’’) or under the applicable state securities laws of any jurisdiction in the United States or under the applicable laws of Canada, Japan, the Republic of Ireland, Australia or South Africa (‘‘Prohibited Territories’’). Accordingly, subject to certain exceptions, Ordinary Shares may not be offered or sold or subscribed, directly or indirectly, within the Prohibited Territories or to or by any US Person (as such term is defined in Regulation S promulgated under the Securities Act) or any national, resident or citizen of the other Prohibited Territories or any corporation, partnership or other entity created or organised under the laws thereof. This document should not be distributed, published, reproduced or otherwise made available in whole or in part or disclosed by recipients to any other person and, in particular, should not be distributed to persons with addresses in the Prohibited Territories or to any corporation, partnership or other entity created or organised under the laws thereof, where such distribution may lead to a breach of any law or regulatory requirement. The distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and, therefore, persons into whose possession this document comes should inform themselves about and observe such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. Numis Securities Limited (‘‘Numis’’) is authorised and regulated by the FCA in the United Kingdom. Numis is acting as the Company’s nominated adviser and joint bookrunner for the purposes of the AIM Rules for Companies in connection with the Placing and Admission and will not regard any other person as its client in connection with the Placing and/or Admission (whether or not a recipient of this document). Numis’ responsibilities as nominated adviser are owed solely to London Stock Exchange and are not owed to the Company or any of its directors. Numis will not be responsible to anyone other than the Company for providing the protections afforded to clients of Numis or for advising any other person in connection with the transaction and arrangements detailed in this document. Numis accepts no liability whatsoever for the accuracy of any information or opinions contained in, or for the omission of any material information from, this document. Numis makes no representation or warranty, express or implied, concerning the contents of this document, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the Ordinary Shares. Panmure Gordon (UK) Limited (‘‘Panmure Gordon’’) is authorised and regulated by the FCA in the United Kingdom. Panmure Gordon is acting as the Company’s joint bookrunner for the purposes of the AIM Rules for Companies in connection with the Placing and Admission and will not regard any other person as its client in connection with the Placing and/or Admission (whether or not a recipient of this document). Panmure Gordon will not be responsible to anyone other than the Company for providing the protections afforded to clients of Panmure Gordon or for advising any other person in connection with the transaction and arrangements detailed in this document. Panmure Gordon accepts no liability whatsoever for the accuracy of any information or opinions contained in, or for the omission of any material information from, this document. Panmure Gordon makes no representation or warranty, express or implied, concerning the contents of this document, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the Ordinary Shares. Deloitte Corporate Finance is a division of Deloitte LLP which is authorised and regulated in the United Kingdom by the FCA in respect of regulated activities. Deloitte Corporate Finance is acting as the Company’s financial adviser and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Deloitte Corporate Finance or for advising any other person in connection with the transaction and arrangements detailed in this document. Deloitte Corporate Finance accepts no liability whatsoever for the accuracy of any information or opinions contained in, or for the omission of any material information from, this document. Deloitte Corporate Finance makes no representation or warranty, express or implied, concerning the contents of this document, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it, or on its behalf, in connection with the Company or the Ordinary Shares. The contents of the Company’s website or any hyperlinks accessible from the Company’s website do not form part of this document and investors should not rely on them. 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 offices of the Company at Kingston House, Centre 27 Business Park, Birstall, Batley, West Yorkshire, WF17 9TD from the date of this document and for a period of at least one month from Admission and on the Company’s website www.morsesclub.com under AIM Rule 26. 2 IMPORTANT NOTICE Forward looking statements All statements, other than statements of historical facts, included in this document, including, without limitation, those regarding the Company’s financial position, business strategy, plans and objectives of management for future operations or statements relating to expectations in relation to dividends or any statements preceded by, followed by or that include the words ‘‘targets’’, ‘‘believes’’, ‘‘expects’’, ‘‘aims’’, ‘‘intends’’, ‘‘plans’’, ‘‘will’’, ‘‘may’’, ‘‘anticipates’’, ‘‘would’’, ‘‘could’’ or similar expressions or the negative thereof, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the actual results, performance, achievements of or dividends paid by the Company to be materially different from actual results, performance or achievements, or dividend payments expressed or implied by such forward-looking statements. Such forward- looking statements are based on numerous assumptions regarding the Company’s net asset value, present and future business strategies and income flows and the environment in which the Company will operate in the future. These forward-looking statements speak only as of the Last Practicable Date. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by law, the AIM Rules for Companies or any appropriate regulatory authority. Market and financial information The data, statistics and information and other statements in this document regarding the markets in which the Company operates, or the Company’s position therein, are based on the Company’s records or are taken or derived from statistical data and information derived from the sources described in this document. In relation to these sources, such information has been accurately reproduced from the published information, and, so far as the Directors are aware and are able to ascertain from the information provided by the suppliers of these sources, no facts have been omitted which would render the reproduced information inaccurate or misleading. Unless otherwise indicated, audited historical financial information for the three years ended 27 February 2016 and the notes to that financial information have been prepared in accordance with International Financial Reporting Standards. The accounting reference date of the Company is 28 February. However (as permitted by the Act) the Group prepares its consolidated audited financial statements as at and for the period ending on the last Saturday in February each year to take account of the weekly processes within its business. As a result, the Group’s financial years are comprised of 52-week or 53-week periods. Accordingly, all references in this document to: * the financial year ended on 22 February 2014 are to the 52 weeks ended 22 February 2014; * the financial year ended 28 February 2015 are to the 53 weeks ended 28 February 2015; and * the financial year ended 27 February 2016 are to the 52 weeks ended 27 February 2016. Various figures and percentages in tables in this document and certain financial data in this document have 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. In this document, references to ‘‘pounds sterling’’, ‘‘£’’, ‘‘pence’’ and ‘‘p’’ are to the lawful currency of the United Kingdom. 3 CONTENTS Page EXPECTED TIMETABLE OF PRINCIPAL EVENTS 5 PLACING STATISTICS 5 DIRECTORS, SECRETARY AND ADVISERS 6 DEFINITIONS AND TERMS 8 PART1 INFORMATION ON THE COMPANY 10 PART2 RISK FACTORS 34 PART3 FINANCIAL INFORMATION ON THE GROUP 48 PART4 SUMMARY OF THE REGULATORY ENVIRONMENT 83 PART5 SUMMARY OF UNITED KINGDOM TAXATION 87 PART6 ADDITIONAL INFORMATION 90 PART7 TERMS AND CONDITIONS OF THE PLACING 119 4 EXPECTED TIMETABLE OF PRINCIPAL EVENTS Publication of this document 29 April 2016 Admission and commencement of dealings in the Ordinary Shares on AIM 5 May 2016 Delivery of Ordinary Shares in CREST accounts 5 May 2016 Despatch of definitive share certificates (where applicable) By19May2016 Each of the times and dates in the above timetable is subject to change without further notice. References to all times are to London time. PLACING STATISTICS Placing Price 108 pence Number of Existing Ordinary Shares 129,500,000 Number of Existing Ordinary Shares to be sold pursuant to the Placing 63,455,000 Market Capitalisation of the Company on Admission at the Placing Price £139,860,000 Gross funds raised pursuant to the Placing £68,531,400 Percentage of the Share Capital represented by the Placing Shares 49.0 ISIN GB00BZ6C4F71 SEDOL BZ6C4F7 TIDM MCL 5 DIRECTORS, SECRETARY AND ADVISERS Directors: Stephen Ashley Karle Independent Non-Executive Chairman Paul Mark Smith Chief Executive Officer Thomas Andrew (Andy) Thomson Chief Financial Officer Joanne Carolyn Lake Independent Non-Executive Director Sir Nigel Knowles Independent Non-Executive Director Patrick Desmond Storey Independent Non-Executive Director Peter Martin Ward Non-Executive Director Company Secretary: Martin Webster Registered Office: Kingston House Centre 27 Business Park Woodhead Road Birstall Batley West Yorkshire WF17 9TD Nominated Adviser Numis Securities Limited and Joint 10 Paternoster Square Bookrunner: London EC4M 7LT Joint Bookrunner: Panmure Gordon (UK) Limited One New Change London EC4M 9AF Financial Adviser to Deloitte Corporate Finance the Company: Deloitte LLP 2 New Street Square London EC4A 3BZ Legal Adviser to the Dentons UKMEA LLP Company: One Fleet Place London EC4M 7WS Legal Adviser to the Eversheds LLP Nominated Adviser 1 Wood Street and Joint London Bookrunners: EC2V 7WS Auditor: Deloitte LLP Four Brindley Place Birmingham B1 2HZ Reporting Deloitte LLP Accountant: Saltire Court 20 Castle Terrace Edinburgh EH1 2DB 6 Public Relations CNC–Communications&Network Adviser: Consulting AG 55 Whitfield Street London W1T 4AH Registrar: Capita Registrars Limited The Registry 34 Beckenham Road Beckenham Kent BR3 4TU Company website: www.morsesclub.com 7 DEFINITIONS AND TERMS In this Admission Document, where the context permits, the expressions set out below shall bear the following meanings: ‘‘Act’’ the Companies Act 2006, as amended; ‘‘Admission’’ theadmissionoftheentireissuedandtobeissuedordinaryshare capital of the Company to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules; ‘‘Admission Document’’ this document; ‘‘AIM’’ the AIM Market operated by London Stock Exchange; ‘‘AIM Rules for Companies’’ the AIM Rules for Companies published by London Stock Exchange, as amended from time to time; ‘‘AIM Rules for Nominated the AIM Rules for Nominated Advisers published by London Advisers’’ Stock Exchange, as amended from time to time; ‘‘Articles of Association’’ or the articles of association of the Company adopted on 26 April ‘‘Articles’’ 2016; ‘‘Board’’ or ‘‘Directors’’ the directors of the Company whose names are listed on page 6 of this Admission Document; ‘‘CCA’’ Consumer Credit Association; ‘‘City Code’’ the City Code on Takeovers and Mergers; ‘‘Company’’ Morses Club PLC ‘‘certificated’’ or ‘‘in certificated a share or other security which is not in un-certificated form (i.e. form’’ not in CREST); ‘‘CREST’’ the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK & Ireland Limited is the operator (as defined in the CREST Regulations), which facilitates the transfer of title to shares without a written instrument; ‘‘CREST Regulations’’ the Uncertificated Securities Regulations 2001 (SI 2001 No.3755); ‘‘DSP’’ the Company’s 2016 Deferred Share Plan; ‘‘Existing Ordinary Shares’’ the Ordinary Shares in issue as at the date of this Admission Document (which include the Placing Shares); ‘‘Facility Agreement’’ thefacilityagreementbetween,amongstothers,theCompanyas borrower and Shawbrook Bank Limited as agent originally dated 10 March 2014 (as amended and restated from time to time), as described in paragraph 14.5 of Part 6 of this Admission Document; ‘‘FCA’’ Financial Conduct Authority; ‘‘FSMA’’ the Financial Services and Markets Act 2000; ‘‘Group’’ the Company and SFS; ‘‘HCSTC’’ High-Cost Short-Term Credit; ‘‘Issued Share Capital’’ theentireissuedOrdinarySharecapitaloftheCompanyfollowing Admission, including the Placing Shares; ‘‘Last Practicable Date’’ 28April2016beingthelastpracticabledatebeforepublicationof this Admission Document; ‘‘LIBOR’’ the London Interbank Offered Rate; ‘‘Numis’’ Numis Securities Limited; ‘‘OFT’’ Office of Fair Trading; ‘‘Ordinary Shares’’ ordinary shares of £0.01 each (being par value) in the share capital of the Company; 8 ‘‘Panmure Gordon’’ Panmure Gordon (UK) Limited ‘‘Placing’’ the conditional placing of thePlacingShares atthe Placing Price pursuant to the Placing Agreement; ‘‘Placing Agreement’’ the conditional agreement dated 29 April 2016 between the Directors, the Company, the Selling Shareholder, Numis and Panmure Gordon relating to the Placing, as described in paragraph 14.1 of Part 6 of this Admission Document; ‘‘Placing Price’’ 108 pence per Placing Share; ‘‘Placing Shares’’ the 63,455,000 existing Ordinary Shares to be transferred by the Selling Shareholder pursuant to the Placing, such transfer being conditional on Admission; ‘‘Relationship Deed’’ the agreement dated 29 April 2016 between the Company, the SellingShareholder,FCAPFourLimitedandJamieConstableas described in paragraph 14.4 of Part 6 of this Admission Document; ‘‘Selling Shareholder’’ Perpignon Limited; ‘‘Shareholder’’ a holder of Ordinary Shares; ‘‘SFS’’ Shopacheck Financial Services Limited; ‘‘subsidiary’’ or ‘‘subsidiary have the meanings given to them by the Act; undertaking’’ ‘‘Taxes Act’’ the Income and Corporation Taxes Act 1988, as amended; ‘‘UK HCC’’ home collected credit in the United Kingdom; ‘‘UK’’ or ‘‘United Kingdom’’ the United Kingdom of Great Britain & Northern Ireland; ‘‘UK Listing Authority’’ the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA; ‘‘United States’’ or ‘‘US’’ theUnitedStatesofAmerica,itsterritories andpossessions,any stateoftheUnitedStatesofAmericaandtheDistrictofColumbia and all other areas subject to its jurisdiction; and ‘‘Voting Rights’’ the voting rights attached to the Ordinary Shares. 9