Share Buyback, Rule 9 Waiver, Notice of GM

Nexteq plc

("Nexteq", the "Company" or the "Group")

Proposed Share Buyback, Rule 9 Waiver and Notice of General Meeting

Nexteq (AIM: NXQ), a leading technology solutions provider to customers in selected industrial markets, announces that today it has posted a Circular to Shareholders giving Notice of a General Meeting, to be held at 11.00 a.m. on 18 September 2025 at the Company's offices at The Galleria, Station Road, Crawley, RH10 1WW.

Proposed Share Buyback and Rule 9 Waiver

The Company proposes to seek Shareholder approval to have the authority to buy back up to 10 per cent of the Company's issued share capital, being up to 5,988,515 Ordinary Shares (the "Share Buyback Programme"). It is the intention that this Share Buyback Programme will run until the authority expires at the Company's next AGM or such other date prior to then should it be completed sooner.

Assuming utilisation of the full buyback authority, the Concert Party (being Nicholas Jarmany, Francesca Marzilli, Alessandro Jarmany, Oliver Jarmany, Daniel Jarmany, Gary Mullins, Sophie Mullins, Susan Mullins, John Mullins, Mark Mullins, Jacob Mullins, Joseph Mullins, Louis Mullins and Best Acumen Limited), may own up to approximately 41.18 per cent of the voting rights in the Company. Therefore, the Independent Shareholders will be asked to waive an obligation on the Concert Party to make a general offer for the entire issued, and to be issued, share capital of the Company which may arise under Rule 9 of the Takeover Code as a result of the Company purchasing its Ordinary Shares.

The Company has historically sought authority and received approval from its shareholders to make market purchases of its own shares, with the most recent authority being granted at a general meeting of the Company on 16 April 2024 ("2024 GM"), permitting the Company to repurchase up to 6,653,906 Ordinary Shares, equal to 10 per cent of the Company's issued ordinary share capital at the time of the 2024 GM ("2024 Buy-Back Authority"). As set out in a circular to Shareholders dated 28 March 2024, a waiver was also obtained from the Panel of any obligation which might otherwise have arisen on the Concert Party to make a general offer to Shareholders of the Company pursuant to Rule 9 of the City Code as a result of any market purchases of Ordinary Shares by the Company pursuant to the 2024 Buy-Back Authority.

As announced on 14 March 2025, the Company has completed its previous share buyback programme and purchased the full amount of 6,653,906 Ordinary Shares pursuant to the 2024 Buy-Back Authority.

Following feedback from key Shareholders, the Company is now seeking to ask Shareholders for authority, as necessary under the City Code, to make market purchases of its Ordinary Shares under the same parameters as approved at the 2024 GM.

With a strong cash balance, that the Board believes will increase, the Board has concluded that, as in 2024, it wishes to have the flexibility to utilise the Proposed Buy Back Authority in circumstances which it decides are in the best interests of the Company. Accordingly, this letter sets out the background to, and reasons why the Board believes it to be in the best interests of Shareholders as a whole for the Company to reapply for authority, to make market purchases of its Ordinary Shares under the same parameters as previously approved, being that any share repurchases are made at a price:

(i) no less than the nominal value of an Ordinary Share, being 0.1 pence;

(ii) no higher than an amount which is not more than 5 per cent above the average of the closing middle market quotations for an Ordinary Share, as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the date on which that Ordinary share is contracted to be purchased; or,

(iii) the higher of the price of the last independent trade of an ordinary share or the highest current independent bid on the London Stock Exchange.

Due to the limited liquidity in the issued Ordinary Shares, a buyback of Ordinary Shares pursuant to the Authority (or its successor) on any given trading day may represent a significant proportion of the daily trading volume in the Ordinary Shares on AIM and could exceed 25 per cent. of the average daily trading volume and, accordingly, the Company will not benefit from the exemption contained in Article 5(1) of Regulation (EU) No. 596/2014 as adopted into UK law by the European Union (Withdrawal) Act 2018.

Share Buy Back Programme

Should the Proposed Buy Back Authority be approved, the Board will have the flexibility to utilise the Proposed Buy Back Authority in circumstances which it decides are in the best interests of the Company subject to the parameters described above. The Company's dividend policy remains unchanged. 

The Company will make further announcements in due course following any share purchases under the Share Buyback Programme.

The full Circular to Shareholders will be made available on the Company's website, https://www.nexteqplc.com/. Defined terms used in this announcement are the same as those defined in the Circular unless the context requires otherwise.

About Nexteq

Nexteq (AIM: NXQ) is a strategic technology solutions provider to customers in selected industrial markets. Its innovative technology enables the manufacturers of global electronic equipment to outsource the design, development and supply of non-core aspects of their product offering. By outsourcing elements of their technology stack to Nexteq, customers can focus their product development effort on the most critical drivers of their business' success.

Our solutions are delivered through a global sales team and leverage the Group's electronic hardware, software, display and mechanical engineering expertise. Our Taiwan operation is at the heart of Asian supply networks and facilitates cost effective manufacturing and strategic supply chain management.

The Group operates in six countries and services over 500 customers across 47 countries.

Nexteq operates two distinct brands: Quixant, a specialised computer platforms provider, and Densitron, leaders in human machine interface technology, each with dedicated sales, account management and product innovation teams. Founded in 2005, and later floating on the London Stock Exchange's AIM stock market as Quixant plc, the Group rebranded to Nexteq in 2023.

Further information on Nexteq and its divisions can be found at www.nexteqplc.com.

Disclaimer

Cavendish Capital Markets Limited ("Cavendish"), which is authorised and regulated by the Financial Services Authority (FCA), is acting as Financial Adviser to the Company in connection with the matters described in this announcement. Cavendish will not be responsible to anyone other than the Company for providing the protections afforded to clients of Cavendish or for advising any other person on the Proposed Buy-Back Authority and the Rule 9 Waiver or any other arrangements described in this announcement. Cavendish has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Cavendish for the accuracy of any information or opinions contained in this announcement or for the omission of any information.

The below text has been extracted from the Circular.

1. Introduction

The Company has historically sought authority and received approval from its shareholders to make market purchases of its own shares, with the most recent authority being granted at a general meeting of the Company on 16 April 2024 (2024 GM), permitting the Company to repurchase up to 6,653,906 Ordinary Shares, equal to 10 per cent of the Company's issued ordinary share capital at the time of the 2024 GM (2024 Buy-Back Authority). As set out in a circular to Shareholders dated 28 March 2024, a waiver was also obtained from the Panel of any obligation which might otherwise have arisen on the Concert Party to make a general offer to Shareholders of the Company pursuant to Rule 9 of the City Code as a result of any market purchases of Ordinary Shares by the Company pursuant to the 2024 Buy-Back Authority.

As announced on 14 March 2025, the Company has completed its share buyback programme and purchased the full amount of 6,653,906 Ordinary Shares pursuant to the 2024 Buy-Back Authority.

Following feedback from key Shareholders, the Company is now seeking to ask Shareholders for authority, as necessary under the City Code, to make market purchases of its Ordinary Shares under the same parameters as approved at the 2024 GM alongside the Waiver Resolution.

With a strong cash balance, that the Board believes will increase, the Board has concluded that, as in 2024, it wishes to have the flexibility to utilise the Proposed Buy Back Authority in circumstances which it decides are in the best interests of the Company. Accordingly, this letter sets out the background to, and reasons why the Board believes it to be in the best interests of Shareholders as a whole for the Company to reapply for authority, to make market purchases of its Ordinary Shares under the same parameters as previously approved, being that any share repurchases are made at a price:

(i) no less than the nominal value of an Ordinary Share, being 0.1 pence;

(ii) no higher than an amount which is not more than 5 per cent above the average of the closing middle market quotations for an Ordinary Share, as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the date on which that Ordinary share is contracted to be purchased; or,

(iii) the higher of the price of the last independent trade of an ordinary share or the highest current independent bid on the London Stock Exchange.

The Takeover Code (the "Code") applies to Nexteq Plc (the "Company"). Under Rule 9 of the Code, any person who acquires an interest in shares which, taken together with shares in which that person or any person acting in concert with that person is interested, carry 30% or more of the voting rights of a company which is subject to the Code is normally required to make an offer to all the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with that person, is interested in shares which in the aggregate carry not less than 30% of the voting rights of such a company but does not hold shares carrying more than 50% of the voting rights of the company, an offer will normally be required if such person or any person acting in concert with that person acquires a further interest in shares which increases the percentage of shares carrying voting rights in which that person is interested.

An offer under Rule 9 must be made in cash at the highest price paid by the person required to make the offer, or any person acting in concert with such person, for any interest in shares of the company during the 12 months prior to the announcement of the offer.

The Panel has agreed, however, to waive the obligation to make an offer that would otherwise arise under Rule 9 on the Concert Party as a result of the buy-back by the Company of any Ordinary Shares and under the proposed Buy-back Authority subject to the approval of independent shareholders. Accordingly, Resolution 2 is being proposed at a general meeting of the Company and will be taken on a poll. Members of the Concert Party as so defined on page 6 of the Circular will not be entitled to vote on the Resolution.

The Circular sets out details of the proposed buy back authority and contains at the end of the Circular the Notice of GM to be held at 11.00 a.m. on 18 September 2025 to consider and approve both the new Repurchase Resolution and the Waiver Resolution.

2. Background to and reasons for the recommendation

Rationale for using the share buy-back authority

The Board believes it to be in the best interests of Shareholders as a whole for the Company to have authority to purchase its Ordinary Shares in the market.

The Directors believe that the Proposed Buy-Back Authority would be a productive use of the Company's cash reserves, whilst at the same time enhancing earnings per share. The Directors also believe that the Proposed Buyback Authority would provide Shareholders with the flexibility, but without any compulsion, to realise value in respect of all or some of their shareholdings and is a tax efficient method of returning surplus cash to certain Shareholders.

The Board is mindful of the financial impact a share buy-back may have on the Company and has therefore conducted a thorough exercise with regards to the capital requirements of the Group, its prospects and its funding available, whilst also taking into account the merits of providing greater short-term liquidity for Ordinary Shares. The Board will only proceed to make market purchases at prices which make sense for the Company and its Shareholders as a whole, and intends to only do so when there is a lack of liquidity for the Ordinary Shares. The Directors have confirmed that none of them (or any persons connected with them within the meaning of sections 252-255 of the Act) will, nor do they have any current intention to, sell any of the Ordinary Shares which they beneficially own to the Company should the Company utilise the Proposed Buy-Back Authority.

Similarly, all members of the Concert Party have confirmed that none of them (or any persons connected with them within the meaning of sections 252-255 of the Act) will, nor do they have any current intention to, sell any of the Ordinary Shares which they beneficially own to the Company should the Company utilise the Proposed Buy-Back Authority.

Purchases of Own Shares

The Board is seeking the authority, in accordance with Section 701 of the Act, for the Company to make market purchases of its own shares (within the meaning of Section 693(4) of the Act) providing such purchases do not exceed, in aggregate 10 per cent of the Company's issued ordinary share capital (exclusive of shares held in treasury) as at the latest practicable date before publication of the Circular, being 1 September 2025, being 5,988,515 Ordinary Shares, and subject to such pricing restrictions as described in Paragraph 1 above.

The Board is seeking the flexibility to buy back shares should they consider it appropriate to do so. However, the Board will only exercise the authority after taking account of the overall financial position of the Company and in circumstances where they believe that to do so would result in either an increase or protection of value for the remaining Shareholders and be in the best interests of Shareholders as a whole.

Any Ordinary Shares purchased under the Proposed Buy-Back Authority will either be cancelled and the number of Ordinary Shares in issue reduced accordingly, or will be held in treasury. Shares held in treasury may be used, to the extent necessary to satisfy the exercise of options by existing Shareholders whilst at the same time minimising dilution to existing Shareholders.

City Code on Takeovers and Mergers

The City Code applies to the Company. Under Rule 9 of the Code, any person who acquires an interest in shares which, taken together with shares in which that person or any person acting in concert with that person is interested, carry 30 per cent or more of the voting rights of a company which is subject to the Code is normally required to make an offer to all the remaining shareholders to acquire their shares.

Similarly, when any person, together with persons acting in concert with that person, is interested in shares which in the aggregate carry not less than 30 per cent of the voting rights of such a company but does not hold shares carrying more than 50 per cent of the voting rights of the company, an offer will normally be required if such person or any person acting in concert with that person acquires a further interest in shares which increases the percentage of shares carrying voting rights in which that person, and any persons acting in concert with that person, are interested.

An offer under Rule 9 must be made in cash at the highest price paid by the person required to make the offer, or any person acting in concert with such person, for any interest in shares of the company during the 12 months prior to the announcement of the offer.

Under Rule 37 of the City Code, when a company purchases its own voting shares, the resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert is interested will be treated as an acquisition for the purpose of Rule 9 of the City Code (although a shareholder who is neither a director nor acting in concert with a director will not normally incur an obligation to make an offer under Rule 9 in these circumstances).

Current and potential shareholdings of the Concert Party

For the purposes of the City Code, Nicholas Jarmany, Francesca Marzilli, Alessandro Jarmany, Oliver Jarmany, Daniel Jarmany, Gary Mullins, Sophie Mullins, Susan Mullins, John Mullins, Mark Mullins, Jacob Mullins, Joseph Mullins, Louis Mullins and Best Acumen Limited are presumed to be acting in concert (the "Concert Party").

The Concert Party currently holds, in aggregate, 22,194,436 Ordinary Shares representing an aggregate interest of 37.06 per cent of the Company's issued share capital of 59,885,154 Ordinary Shares as at 1 September 2025 (being the latest practicable date prior to the publication of the Circular).

The details of the effect of the Repurchase Resolution on the aggregate interests of Concert Party are set out in paragraph 3 below and paragraph 5.4 of Part II of the Circular.

3. The Waiver Resolution

Under Rule 37 of the City Code, when a company redeems or purchases its own voting shares, any resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert is interested will be treated as an acquisition for the purpose of Rule 9 of the City Code. Subject to prior consultation, the Panel will normally waive any resulting obligation to make an offer under Rule 9 if there is a vote of independent shareholders.

As set out in paragraph 2 above, and given that the Concert Party's current percentage interest in Ordinary Shares is between 30 and 50 per cent of the of the voting rights of the Company, any increase in any member of the Concert Party's percentage interest in Ordinary Shares (which includes any increase caused by way of a share buyback) would have the effect of triggering Rule 9 of the City Code and result in the Concert Party being under an obligation to make a general offer to all Shareholders.

The Independent Directors have consulted with the Panel, which has agreed that, subject to approval of the Waiver Resolution by the Independent Shareholders on a poll at the GM, it will grant the Repurchase Waiver. The effect of the Repurchase Waiver, if approved by the Independent Shareholders, would be that the Concert Party would not be required to make a general offer under Rule 9 of the City Code that would otherwise arise due to the increase in the aggregate holding of the Concert Party resulting from the purchase by the Company of its own Ordinary Shares pursuant to the Proposed Buy-Back Authority.

The Waiver Resolution is subject to the approval of Independent Shareholders on a poll, where each Independent Shareholder will be entitled to one vote for each Ordinary Share they hold. Members of the Concert Party are not entitled to vote on this poll as they are not presumed to be independent.

Set out below, and also in paragraph 5.4 of Part II of the Circular, are details of the maximum percentage of the Company's voting rights which could be held by the Concert Party following the approval of the Repurchase Resolution and the Waiver Resolution as it assumes the full utilisation of the Proposed Buy-Back Authority (assuming no member of the Concert Party participates in the proposed buyback and no further Ordinary Shares are issued by the Company).

Scenario

In the event that:

• the Independent Shareholders approve the Waiver Resolution;

• the maximum number of Ordinary Shares are repurchased by the Company under the Proposed Buy-Back Authority and no further Ordinary Shares are issued by the Company; and

• there are no sales of Ordinary Shares by any member of the Concert Party pursuant to the proposed share buyback or otherwise.

the combined shareholding of the Concert Party of 22,194,436 Ordinary Shares would increase from 37.06 per cent to a maximum of 41.18 per cent of the issued ordinary share capital of the Company of 53,896,639 Ordinary Shares (excluding any shares held in treasury) as further detailed in paragraph 5.4 of Part II of the Circular.

 *Shares held by Best Acumen Limited, an entity owned and controlled by Chen-Tai Lin and Shu-Hsiang Wu.

Shareholders should note that any further increase in the interests of the Concert Party in the Ordinary Shares of the Company, which increases the percentage of the voting rights in which they are interested, whether collectively or individually, other than as a result of the purchase of Ordinary Shares pursuant to the Proposed Buy-Back Authority will be subject to the provisions of Rule 9. Whether or not the Waiver Resolution is passed by the Independent Shareholders, members of the Concert Party will not be restricted from making an offer for the Company.

In the event that the Concert Party's interest in the voting rights of the Company increases as a result of the exercise of the Proposed Buy-Back Authority, they could not acquire any further interest in the shares of the Company without triggering an obligation under Rule 9.

The Waiver described in the Waiver Resolution, applies only in respect of increases in the percentage interest of the Concert Party resulting from purchases by the Company of its own shares under the Proposed Buy-Back Authority and not in respect of any other increases in the Concert Party's interests in Ordinary Shares by any other means.

4. The intentions of the Concert Party

The members of the Concert Party have each confirmed to the Company that they are not proposing, following any increase in their percentage interests in Ordinary Shares or voting rights as a result of any buy-back of its Ordinary Shares by the Company to seek any change in the composition of the Board or the general nature of the Company's business.

The members of the Concert Party have also each confirmed that they have no intention to make any changes regarding the future of the Company's business, the locations of the Company's places of business and the continued employment of its employees and management (and those of its subsidiaries) as a result of any increase in their percentage interests in Ordinary Shares or voting rights as a result of a buy-back of its Ordinary Shares by the Company nor will there be any redeployment of the fixed assets of the Company as a result of such an increase.

The Company intends for its Ordinary Shares to remain admitted to AIM in the event the Proposed Buy-Back Authority is exercised in whole or in part at any point within the authority being requested.

There have been no changes to the relationship agreement entered into between the Company and each of Nick Jarmany, Gary Mullins and Chen-Tai Lin on 14 May 2013.

5. Current Trading and prospects

In the audited final results for the year ended 31 December 2024 released on 19 March 2025, Nexteq provided the following trading update on current trading:

"The market backdrop in 2024 was characterised by difficult conditions, including geopolitical uncertainty, elevated inflation which both impact business confidence combined with the ongoing cycle of destocking. As a result, our trading performance was not at the high standard that we set ourselves. Notwithstanding external factors, there are a number of operational and organisational factors within our control that I, together with the newly appointed Senior Leadership Team, have identified to change in order to become leaders of markets again, and to drive the growth that this business is capable of, in line with our three-year ambitions of being $108m-$120m revenue, with gross margins of 35-38% and Adjusted EBITDA margins of 10-15%. This refocus was presented at our recent Capital Markets Event in February and detailed later in this report."

In the Company's AGM Statement released on 29 April 2025, Nexteq made the following statement (including the footnote):

"The Board remains confident in achieving 2025 full year market expectations[1]."

And, in the Company's Trading Update and Notice of Results announcement released on 22 July 2025, Nexteq repeated the following statements (including the footnote):

"H2 2025 revenues are expected to exceed H1, returning to the historic pattern of H2 weighted revenues, and in line with FY25 market expectations1. There continues to be attention on controlling costs, alongside focused investment in the delivery of key growth projects, with H2 and full year 2025 profits expected to be in line with market expectations."; and

"The Board is confident in meeting expectations for 2025".

In coming to this conclusion, the board have made certain assumptions on the continued performance of order intake from repeat customers, successfully integrating Nexteq products with recent customer wins, retaining its ability to convert the Company's new business pipeline, and on maintaining the Company's current level of operations through existing resources such that expected sales in the period are completed in a timely manner. It is further assumed the Company experiences no material unforeseen events which cause disruption to regular operations.

The Directors confirm that the above statements remain valid and confirm that they have been properly compiled on the basis of the assumptions stated and that the basis of accounting used is consistent with the company's accounting policies.

General Meeting

A notice convening the General Meeting to be held at 11.00 a.m. on 18 September 2025 is set out at the end of the Circular.

Owing to their interests in it, the Concert Party members will not be voting on the Waiver Resolution in respect of their combined interests of 22,194,436 Ordinary Shares representing 37.06 per cent of the Company's issued ordinary share capital (excluding treasury shares) as at 1 September 2025, being the last practicable date prior to the publication of the Circular.

6. Action to be Taken

Please note that a hard copy form of proxy will be included with the notice. If you would like to vote on the Resolutions to be proposed at the GM, you are requested to vote in accordance with the instructions printed below as soon as possible.

In the case of CREST members, Shareholders should record their proxy appointment by utilising the CREST electronic proxy appointment service in accordance with the procedures set out in the Notes on page 23 of the Circular.

The instrument appointing a proxy must reach the Company's registrars, Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, B62 8HD by no later than 11.00 a.m. on 16 September 2025.

Shareholders should note that, in order to have the right to vote at the meeting, their holding must be entered on the Company's share register by close of business on 16 September 2025 (or, in the event of any adjournment, 48 hours (excluding any day that is not a working day) before the time fixed for the adjourned meeting).

7. Recommendation

Repurchase Resolution

The Directors recommend all Shareholders to vote in favour of the Repurchase Resolution to be proposed at the GM, as they intend to do in respect of their own beneficial holdings of Ordinary Shares which, as at 1 September 2025, being the last practicable date prior to the publication of the Circular in aggregate, amount to 13,404,805 Ordinary Shares representing approximately 22.38 cent of the existing issued ordinary share capital of the Company. The Directors consider the proposals to be in the best interests of the Company and its members as a whole and are most likely to promote the success of the Company for the benefit of its members as a whole.

Waiver Resolution

The Independent Directors, who have been so advised by Cavendish, believe that the Proposed Buy Back Authority and the Waiver Resolution are fair and reasonable and in the best interests of the Independent Shareholders and the Company as a whole. In providing advice to the Independent Directors, Cavendish has taken into account the Independent Directors' commercial assessments.

Accordingly, the Independent Directors recommend all Independent Shareholders vote in favour of the Waiver Resolution as they intend to do in respect of their own beneficial holdings of Ordinary Shares which, as at 1 September 2025, being the last practicable date prior to the publication of the Circular, in aggregate amount to 57,989 Ordinary Shares, representing 0.10 per cent of the existing issued ordinary share capital of the Company (exclusive of treasury shares).

As detailed above, the Concert Party is considered to be interested in the outcome of the Waiver Resolution. Accordingly, no Director who is also a member of the Concert Party (being Nick Jarmany and Gary Mullins) has participated in the Independent Directors' recommendation and no member of the Concert Party will vote on the Waiver Resolution.