A completed return of capital

NIOX Group (LSE:NIOX), which makes devices that measure exhaled nitric oxide to help diagnose and manage asthma, has finished returning about £12.5m to shareholders through a tender offer.

The company bought back 15,625,000 ordinary shares at 80p each, about 3.7% of its issued capital, and cancelled them. Following cancellation, the number of shares in issue and total voting rights stands at 405,241,313.

LSE:NIOX pioneered commercial FeNO testing in 1998, and its NIOX VERO device is used by clinicians to identify type 2 airway inflammation. Income comes from devices and consumable tests sold to clinics, together with study Revenue from pharmaceutical companies that use the tests in clinical trials. The group is the former Circassia, renamed after selling its other businesses.

About the company

NIOX makes devices that measure nitric oxide in exhaled breath, which helps clinicians identify type 2 inflammation in the airways of people with asthma. The company was formerly Circassia and was renamed after selling its other businesses. Revenue comes from devices and single-use tests for clinics, and from studies run for pharmaceutical companies.

How the offer was structured

The tender was proposed on 29 September, alongside interim results, and approved at a general meeting on 21 October. The 80p price represented a premium of 22.0% to the recent closing price and 26.9% to the three-month volume-weighted average. A tender offer lets every Shareholder choose whether to sell at a fixed price, unlike open-market buybacks, which favour whoever happens to be selling.

Demand appears to have exceeded the shares available, with the offer drawing far more shares than it could take, implying that applications were scaled back.

Who sold

Board directors tendered 355,355 shares in total. Chair Ian Johnson sold 193,361 shares and retains 5,014,927 shares, about 1.24% of voting rights, while chief executive Jonathan Emms sold 71,230 and keeps 3,520,637, or about 0.87%. Harwood Capital, a substantial shareholder, tendered 4,336,495 shares. As Harwood is a substantial shareholder, its participation counted as a related party transaction under AIM rules, and the independent directors, having consulted the company's nominated adviser, judged the terms fair and reasonable.

The modest sales by board members leave them with substantial holdings, which suggests, that the tender was not a vehicle for significant insider exits by the board.

Why it matters

Returning cash rather than holding it says something about how the board views the business. LSE:NIOX reported revenue of £24.0m and adjusted EBITDA of £8.3m for the six months to 30 June 2026, showing it generates meaningful cash from an established product line. The company cited cash of £16.8m when proposing the tender, so the payout represented roughly three-quarters of that figure.

For remaining holders, the arithmetic is straightforward: with 3.7% fewer shares in issue, future profits are spread across a smaller base, partly offset by interest no longer earned on the cash paid out.

That growth effort is now centred on NIOX PRO, a next-generation testing device the company launched on 28 October with improved portability, connectivity and a cloud data application called NIOX Cloud.

The tender in numbers

The purchase of 15,625,000 shares at 80p costs £12.5m, matching the figure given. Those shares represented about 3.7% of the issued capital, which implies a previous total of about 420.9 million shares, and after cancellation the total is 405,241,313. The price of 80p compares with a closing price of about 65.6p implied by the 22.0% premium, and with a three-month average of about 63.0p implied by the 26.9% premium.

How a tender offer differs

In a tender offer, the company invites all shareholders to offer shares at a stated price, and it buys them up to the amount it wishes to purchase. If more shares are offered than the company wants, the offers may be scaled back proportionally. Unlike an open-market buyback, every holder has the same opportunity, which is fairer to holders who do not follow the market closely. The premium means holders who sell receive more than the Market Price at the time.

Director and shareholder participation

The directors sold 355,355 shares in total, which is about 0.09% of the share Capital after the offer. The chair's sale of 193,361 shares left him with 5,014,927 shares, or 1.24%, and the chief executive's sale of 71,230 left him with 3,520,637 shares, or 0.87%. Their holdings after the sales are close to 98% and 98% of their previous levels, respectively, so the sales were small. Harwood Capital's tender of 4,336,495 shares is about 28% of the total shares bought, which makes it the largest single seller among those named.

Related-party rules

Because Harwood is a substantial shareholder, its sale counted as a related-party transaction under AIM rules. The independent directors, having consulted the nominated adviser, judged that the terms were fair and reasonable. Such a review exists to protect other shareholders where an insider-type holder transacts with the company, and the fixed tender price available to everyone helps to show that the terms were not special.

What the cash return signals

By buying back shares at a premium of 22.0% to the closing price, the company chose to return cash to those shareholders who wished to sell. The price is above the market level, so it is a favourable exit for those who took it, while remaining holders keep a larger share of the company. The size of the tender, about £12.5m, is modest in relation to the group's operations.

For the remaining shareholders, the number of shares in issue is now 405,241,313, and per-share measures such as Earnings and dividends will be calculated on that count.

Risks and next milestones

A thinner cash cushion reduces room for manoeuvre if sales slow, launch costs rise or Acquisition opportunities emerge that require funding. Earlier this year, study revenue from pharmaceutical trial sponsors proved volatile, and that source of income remains hard to forecast. The launch of NIOX PRO will need to drive clinical adoption, particularly in the United States, where reimbursement and physician uptake are decisive. The company has not announced the date of its next trading update; in 2026 it issued a full-year trading statement on 20 January.