First Day of Dealings

INTOSOL Holdings Plc - First Day of Dealings

PR Newswire

London, October 19

22 October 2018

INTOSOL Holdings Plc

(‘INTOSOL’ or the ‘Company’)

First Day of Dealings

INTOSOL Holdings Plc, the international luxury travel company, is pleased to announce that at 08:00 today its ordinary shares were admitted to the Standard Listing segment of the Official List of the UK Listing Authority and that trading in the shares has commenced on the London Stock Exchange's Main Market for listed securities (the ‘Admission’) under the ticker symbol: INTO, ISIN: GB00BFYY4Y44 and SEDOL: BFYY4Y4. A total 11,485,618 ordinary shares are in issue, implying a market capitalisation of circa £11.4 million on Admission. Post-listing, the Company has launched an open offer to raise up to £5 million, details of which are published in the prospectus available at www.intosolholdingsplc.com. Peterhouse Capital is acting as Financial Advisor to the Company.

OVERVIEW

INTOSOL Executive Chairman, Rainer Spekowius, said: “The plan is to build on our profitable platform and become a leading luxury bespoke travel company with an international client base, a global experience portfolio and a range of high-end properties across the world providing high margin revenue and asset backing. The listing facilitates the next stage in our growth strategy primarily through the development of the SOUL PRIVATE COLLECTION and expansion into English-speaking markets. We have a number of unique and exciting opportunities in the pipeline on the private travel design side and are focused on completing the acquisition of Oceans Wilderness and beginning construction of our Safari Lodge to provide increased margins and profitability.

“INTOSOL understands the changing face of luxury travel and the increasing preference for one-off experiences. We have a fantastic portfolio of destinations and unique experiences, which we successfully tailor to our clients’ needs, underlined by the extremely high level of repeat custom we receive. The luxury market has proven highly resilient to economic fluctuations, and by utilising our knowledge, experience and operational ability, we believe that we can build significant value for our shareholders.”

The Company’s full Admission Document and further information can be found on its website: www.intosolholdingsplc.com.

GROUP OVERVIEW

INTOSOL is an award winning, luxury travel company providing bespoke and unique experiences globally. The Group has two divisions, the bespoke travel design business, which has a database of over 15,000 existing customers and the SOUL PRIVATE COLLECTION which involves the direct ownership, management and leasing of boutique luxury hotels and villas.

The Group has offices in Germany, the United Kingdom and South Africa and it employs 41 staff, including 15 travel designers, and utilises its proprietary VIRTOSOL online itinerary management system. The Directors believe that the existing business is operating in a growing market, and that entering new markets (both in term of customer origin and destinations) together with the introduction of the SOUL PRIVATE COLLECTION will provide the Group with strong opportunities to increase asset backing, facilitate cross-selling opportunities across the business, particularly for travel design clients, and grow both revenue and profits.

MARKET DYNAMICS

Luxury Travel Market

As global consumers become more affluent there is an increasing trend for disposable income to be invested into experiences rather than material goods, and travel is a big component of those experiences. A study from Amadeus IT Group SA “Shaping the Future of Luxury Travel” confirms that global travel is growing faster than global gross domestic product, with luxury travel growing even more rapidly as consumers expect more rewarding and luxurious travel journeys. On a global basis, travel generally grew at a 4.2% compound annual growth rate from 2011-2015, while luxury travel grew at 4.5% over the same period. Significantly, the demand for travel has remained constant despite testing economic times and the luxury market specifically has remained quite resilient.

Over the next 10 years outbound travel generally is projected to grow at 4.8% per annum, while luxury travel is projected to grow at 6.2% per annum. This would mean that luxury long-haul travel will grow faster than any other form of travel and will overtake border travel (travel between countries that share a border) shortly after 2025. A further trend which is expected to benefit INTOSOL is the growth in private travel design as a portion of the overall luxury travel market. In 2016 it represented 2% of the luxury travel market, however this is projected to increase to 25% of the luxury travel market by 2025.

INTOSOL will be operating in a growing niche of a growing market segment of a growing industry, and the overall market trends are unlikely to provide any impediments to the ongoing growth of the INTOSOL Business.

STRATEGY

INTOSOL’s strategy is to leverage the Group’s core asset management, luxury boutique hotel operations and development competencies to grow the business through a mix of leased and owned property assets under the SOUL PRIVATE COLLECTION brand.

The Group’s acquisition and development strategy is to target exclusive luxury boutique hotels primarily in areas where strong growth is predicted. Currently the portfolio includes five properties, four of which are leased and a fifth, Ocean’s Wilderness, which is available to INTOSOL pursuant to the terms of a purchase contract and will be owned by INTOSOL once the transaction is completed. A further property, Leadwood, has also been purchased. The Group continues to seek properties which are suitable to lease or purchase.

The growth in revenue is mainly based on increasing the client base through expansion into the English-speaking markets while the growth in profitability is expected to come primarily from higher margins through building out the Group’s own value chain with its own hotel products.

The expansion into the English-speaking market is initially focussed mainly on Great Britain in 2018 and 2019 while USA/ Canada as well as Australia is planned for 2020 and 2021. This expansion into English speaking markets is relatively cost efficient as once some initial funding is applied the ongoing growth is usually self-financing. Major milestones have already been achieved in this field – for example the English-speaking retail level website and the Cape Town office with an English-speaking travel designer are both already established. The growth in profitability is expected to follow the growth of the value chain as the Group launches its own high-end hotel products.

The renting of a villa on a long-term lease in the Indian Ocean or South East Asia is planned for February 2020, and a second one for October 2020. In 2021 to 2025 two leased villas per year have been projected in order to further increase the profitability.

Oceans Wilderness

In September 2017 INTOSOL contracted to purchase a high-end boutique hotel on South Africa’s famous Garden Route to add to the SOUL PRIVATE COLLECTION portfolio. The property lies one of the best beaches in the region and consists of nine rooms and suites which all have first class views to the Indian Ocean. Five rooms offer terraces, three of them with exclusive beach access. Oceans Wilderness can be considered one of the best luxury hotels on the Garden Route.

Leadwood Big Game Estate and Safari Lodge

The SOUL PRIVATE COLLECTION has acquired a site for construction of a commercial Safari lodge with a capacity of up to 15 rooms (32 beds) in the renowned Leadwood Big Game Estate, close to the Kruger National Park. The reserve is part of the Blue Canyon Conservation and home to a variety of African species, including the famous Big 5.

With the construction of the INTOSOL Safari Lodge, the SOUL PRIVATE COLLECTION opens up lucrative opportunities in the “Big 5 Safari” business. In addition to existing business – INTOSOL already brings several hundred guests every year on safari to South Africa – there is a high potential for growth through bookings into the international market as the Safari business is booming.

TECHNOLOGY LED OPERATING PLATFORM

The Group is developing VIRTOSOL into a fully integrated virtual reality experience, with data intelligence capabilities supported by digital connectivity to a market leading edge in the customer experience and sales.

The Group has also invested in its website capabilities to improve functionality (for example significantly reducing the number of page clicks required to make a booking for the SOUL PRIVATE COLLECTION online). The development of the website capabilities and functionality has also been directed towards improving the customer experience and encouraging repeat visits.

The information that is provided by the Group’s bespoke information systems, including the capture of data for lane utilisation, is utilised by highly trained and experienced travel design specialists to provide a client focused flexible pricing and package approach at point of sale designed to maximise revenue yield.

DIRECTORS’ AND SENIOR MANAGEMENT

Rainer Spekowius – Executive Chairman

Rainer Spekowius founded the INTOSOL Business in 2003, having run a successful public relations and marketing business for the previous six years. He has stewarded the growth of the business and been instrumental in creating a platform from which to deliver his vision to build a global luxury travel company that merges private travel design, hotel management, property ownership and technology while simultaneously delivering the highest quality luxury travel products and services to clients.

Dr Petra Buchholz – Director and Chief Financial Officer

Dr Buchholz has over 15 years of experience in corporate finance, working with companies such as Deutsche Telekom AG and Gruner & Jahr GmbH & Co. KG. She has many years of national and international experience in the construction, financing and development of digital business models. Additionally, Dr Buchholz has held management positions in both public and private companies. She ensures the INTOSOL team has the most up to date financial systems and controls to maintain business growth.

Robert Mitchell – Non-Executive Director

Robert Mitchell has held non-executive roles as Director of two AIM listed public companies and operated as an advisor to numerous others. He has extensive experience in capital raising, including managing investment in over 250 private and public companies, often through primary capital input, including in his role as Director AIM Equities/Director Private Equity of ISIS Asset Managemente PLC, a specialist AIM investment fund. The combination of his experience as an investor in and advisor to high-growth companies will provide considerable depth to the Board and round out the corporate governance team.

Marcus Yeoman – Non-Executive Director

Marcus Yeoman has acted for a number of AIM quoted companies and various private companies. His early career involved the formation of three companies in IT infrastructure and distribution, after which he moved into small company broking and corporate work with Rathbone Stockbrokers Limited and Cheviot Capital (Nominees) Limited. In 2003, Marcus established Springtime Consultants Ltd and he has been acting as a consultant or non-executive director to a number of listed companies and SME ventures which require assistance with their growth strategies, including M&A activities. His first-hand experience with the capital markets will be valuable to the functioning of the Board.

Cornelle Naude – Director INTOSOL RSA & SPC

Cornelle Naude has been in the hotel and catering industry for more than 20 years. Her career began with training as a hotel specialist in luxury, boutique hotels In South Africa and the Indian Ocean. She has also managed Safari lodges in Zambia and South Africa up to medium-sized hotels and hotel chains. In addition, Ms Naude has extensive experience in Food & Beverage Management. She joined the SOUL PRIVATE COLLECTION team in 2015 to focus on the financial side of the operation of villas and Safari lodges and contributed to significant cost savings in the SOUL PRIVATE COLLECTION in part by completely redesigning the service system. It is for this reason that the SOUL PRIVATE COLLECTION is currently one of the top products in South Africa.