REG - Tavistock Investment - Final Results for Year Ended 31 March 2023
20/09/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230920:nRST9887Ma&default-theme=true
RNS Number : 9887M Tavistock Investments PLC 20 September 2023
Tavistock Investments Plc
("Tavistock" or the "Company")
Final Results for the year ended 31 March 2023
20 September 2023
Tavistock (AIM:TAVI) is pleased to announce its financial results for the year
ended 31 March 2023.
Financial summary
· Reported gross revenues in line with previous year at £34
million (31 March 2022: £34 million)
· 96% of gross revenues were generated by the Group's advisory
business, where the level of recurring income exceeds 80%
○ Advisory business gross revenues up 4.5% over the period at £32.7
million (31 March 2022: £31.3 million)
○ Advisory business gross profit contribution rose by 6% to £10.6
million (31 March 2022: £10.0 million)
· Adjusted EBITDA of £0.14 million (2022: £1.37 million),
considered by the Board to be the best measure of the Company's underlying
performance
· Operating loss of £0.94 million in a year of transition for the
Group (31 March 2022: profit £30.67 million, including an exceptional gain on
the sale of Tavistock Wealth)
Acquisition strategy
· Acquired 21% stake in LEBC Holdings Limited in April 2022;
additional acquisition and subsequent sale back of LEBC subsidiary Hummingbird
Limited for the same consideration as originally paid
· Post balance sheet event (April 2023): acquisition of Precise
Protect, a profitable and fast-growing UK wide protection business with a
network of over 200 advisers and over 30,000 clients
○ The Group now has more than 400 advisers and other business
introducers looking after over 110,000 private clients with estimated assets
of £6 billion, as well as 350 corporate and affinity clients with some 16,000
employees
· Well placed to pursue further acquisitions with up to a further
£14m of deferred consideration receivable from the sale of Tavistock Wealth
and £50 million debt funding facility from the Bank of Ireland
Operational summary
· Launch of the Tavistock Academy to enable the career development
of existing staff and the recruitment of newcomers to the industry, supporting
the objective of attracting and developing new advisers
· Developed financial information and advice portal "Tell Me How"
and established further relationships with introducers to increase sources of
new business leads
· Significant investment in technology to support the scalability
of the business, speed of integrating acquisitions, flow of business
intelligence and efficiency of operations, including the creation of a data
warehouse enabling sophisticated real-time adviser oversight and risk
management.
Share buy backs and dividends
● In August 2022, the Company bought back 3,000,000 of its ordinary
shares of 1p each at a price of 9.35p per share and in November 2022, the
Company bought back a further 300,000 shares at a price of 7p per share;
shares subsequently cancelled, enhancing earnings per share and value of
shares remaining in issue
● Higher level of interim dividend maintained at 0.07p per share
(July 2022: 0.07p, up 40% on October 2021 dividend)
Looking ahead
In the current year the Board's objectives are to:
· extract further operational benefits from the ongoing data mining
project,
· complete the integration of Precise Protect,
· reap the rewards from its membership of the Group, and
· continue to develop the Group through the completion of further
acquisitions.
Brian Raven, Group Chief Executive, said:
"The past financial year has seen Tavistock develop into a leaner, more
efficient business, creating the right foundations for growth. Through the
restructuring of our advice business and the use of technology, the Group is
now able to operate on a much larger scale and embark on the next phase of our
growth plan.
"We are focused on building a large and profitable financial advisory business
through acquisitions and continued organic growth. The Group is well placed
with a strong capital base and list of potential targets with which we are
already engaged. This growth strategy is already underway, with the
acquisition of Precise Protect in April of this year, doubling the number of
advisers within the Group. We expect this business to contribute significantly
to growth in the next financial year."
For further information:
Tavistock Investments Plc
Oliver Cooke
Brian
Raven
Tel: 01753 867000
Allenby Capital Limited Tel: 020 3328 5656
(Nominated adviser and broker)
Corporate Finance:
Nick Naylor, Nick Athanas, Daniel Dearden-Williams
Sales and Corporate Broking:
Tony Quirke
Powerscourt Tel: 07711 380 007
Gilly Lock 020 7250 1446
Roxane Girard
TAVISTOCK INVESTMENTS PLC
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
I am pleased to report that over the last year Tavistock has been developed
into a leaner, more efficient business with a clear vision and excellent
prospects.
The Board has focused on the strategic and commercial development of the
business, together with key areas of operational significance. The progress
achieved is summarised below.
STRATEGIC DEVELOPMENT
The principal recent objective has been to develop a self-sustaining business
model involving three specific initiatives.
The first is to attract and develop new advisers both from within the industry
and from elsewhere. The Tavistock Academy has been launched to enable the
career development of existing staff (administrators to paraplanning,
paraplanners to desk-based advice, improvement of adviser qualifications) and
the recruitment of newcomers to the industry, such as university graduates and
apprentices.
The Company has also created a desk-based advice team to filter new business
leads and look after less complex clients, passing more complex ones to the
face-to-face teams. These new facilities enable the development of fully
qualified financial advisers from scratch with the added benefit of being able
to instil best practice from the outset.
A customer-centric culture is already embedded across the business and
Tavistock's infrastructure for adviser support, real-time oversight, risk
management and embedded governance helps all the Company's advisers to fulfil
their full potential.
The second initiative has been to increase the sources of new business leads.
Tavistock now has numerous distribution partners, commercial partners,
affinity relationships and corporate relationships that provide new business
enquiries, as does the Company's website. Additional business enquiries are
expected to flow from the forthcoming launch of the "Tell Me How" financial
information and advice portal that will be freely available to employees of
all of the above organisations tellmehow.tavistockinvestments.com. The
recently acquired protection network, Precise Protect (see below), will
provide well-qualified advice leads from its 30,000+ clients.
The third initiative has been a significant and on-going investment in
technology to support the scalability of the business, the speed with which
acquisitions can be integrated, the flow of business intelligence (management
information) and the efficiency of operations to enable advisers to spend more
time servicing clients.
A data warehouse has been created collating data from the Company's numerous
systems, logs and spreadsheets to facilitate the automated production of
management information, oversight of advice provision and control of risk
management. This has improved operational effectiveness and decision making,
as well as reduced costs.
By way of example, the data warehouse has enabled the automation of much
adviser oversight and risk management, giving Tavistock a real-time regulatory
oversight regime. Individual adviser scorecards are updated in real-time based
on the results of every pre-sale and post-sale file check. This enables the
automated adjustment of both adviser oversight settings and, if appropriate,
the risk categorisation of product types. This approach also accelerates the
orderly integration of newly acquired businesses.
The Board is unaware of any other company in the sector with the same level of
sophistication in terms of adviser oversight and risk management.
COMMERCIAL DEVELOPMENT
The Board's principal commercial objectives have been to continue the organic
growth of the Group's advice business and to replace by way of acquisition the
profit contribution generated by Tavistock Wealth, prior to its sale in August
2021.
Organic Growth
Reported gross revenues from the Group's advisory activities rose by 4.5% over
the period under review (31 March 2023: £32.7 million, 31 March 2022:
£31.3million). The gross profit contribution rose by 6% (31 March 2023:
£10.6 million, 31 March 2022: £10.0 million). Given the challenging market
conditions and the related falls in asset values during the year under review,
the achievement of this level of organic growth was creditable.
Acquisition Strategy
The Group is well placed to pursue its acquisition strategy, as it has up to a
further £14m of deferred consideration receivable from the sale of Tavistock
Wealth, as well as a £50 million debt funding facility from the Bank of
Ireland.
The identification and investigation of acquisition opportunities is a
time-consuming business and inevitably, some transactions fail at the due
diligence stage. However, in April 2023, the Company completed the first
significant acquisition in the next phase of its growth plan with the purchase
of Precise Protect Limited ("Precise Protect").
Precise Protect is a profitable and fast-growing UK wide protection business
based in Bangor, Northern Ireland. The company has a network of over 200
advisers working with more than 30,000 UK clients. Precise Protect offers
clients a wide range of products including life and critical illness cover,
personal injury and income protection and private medical insurance, several
of which have been developed in-house and are unique to the firm. In the year
ended 31 October 2022, Precise Protect reported a profit before taxation of
£1.45 million on turnover of £6.5 million and net assets of £1.23 million.
Tavistock now has more than 400 advisers and other business introducers
looking after over 110,000 private clients with estimated assets of £6
billion, as well as 350 corporate and affinity clients with some 16,000
employees.
Precise Protect is led by an experienced and dedicated specialist team and the
Board believes that the business will be a major contributor to the
profitability of the Group.
Key integration opportunities include:
· a significant increase in mortgage business,
· a pool of 30,000+ clients providing leads for Tavistock's desk
based and face-to-face financial advice teams; and
· the potential to upskill Precise Protect's advisers to become
independent financial advisers through the Tavistock Academy.
Investment in LEBC
In April 2022, the Company acquired a 21% stake in LEBC Holdings Limited
("LEBC") details of which are included in Note 11. LEBC is an independent
national business providing financial advice to retail clients and employee
benefits advice to corporate clients. The Group also agreed to acquire one of
LEBC's subsidiaries, Hummingbird Limited, to assist LEBC with its funding
requirements. However, as an alternative source of funds was subsequently
identified, this company was sold back to LEBC for the same consideration as
was originally paid for it.
OTHER SIGNIFICANT MATTERS
Board Appointment
Johanna Rager has been promoted to the Board in the role of Group Finance and
Operations Director. Johanna joined Tavistock four years ago and has been a
strong contributor to the Leadership Board throughout that period. Her
promotion is well-deserved.
Cost Reduction
Management has continued with the planned withdrawal from loss making or low
margin areas of activity. This included the closure of the Luxembourg RAIF
(Reserve Alternative Investment Fund), which had failed to achieve critical
mass.
The Group's low margin appointed representative network has also been
downsized through the managed exit of member firms and the transfer of
selected others to Group entities that achieve higher margins.
Industry Awards
The high standard of Tavistock Private Client's advisory activities continues
to be recognised by the industry and this company won several industry awards
throughout the year:
· SME News Finance Awards 2022 - Best Financial Planning & Tax
Led Investing Firm
· AI Worldwide Finance Awards 2022 - Best Independent Financial
& Investment Planning Firm East of England
· Lawyer International Legal 100 2023 - Best Boutique IFA Firm of
the Year and Most Outstanding in Tax Efficient Investing - UK
· Corporate LiveWire Innovation & Excellence Awards 2023 -
Financial Planning Firm of the Year.
Our congratulations go to the management and staff within that business.
PII Renewal
The high standard of the Group's operational and compliance procedures has
also been recognised by the insurance industry. In a tough and increasingly
expensive insurance market, the Group has secured the renewal of its
professional indemnity insurance cover, on the same terms and at the same
premium as last year, with no increase either in excess levels or in
restrictions on the scope of cover. This is a particular tribute to the
Group's risk management and compliance team.
Regulatory Regime
Two new, industry wide, regulatory obligations have impacted the Group during
the year.
The first, has been the introduction of a new wide-ranging Consumer Duty
regime. This seeks to ensure that all clients are treated both fairly and
equally, that the charges levied for services provided are transparent and
that recommended products both provide value for money and are appropriate for
each client's individual needs and circumstances. I am pleased to advise that
Tavistock is on-track with the implementation of its new Consumer Duty
obligations.
There has also been a sector-wide requirement for firms to conduct a review of
British Steel Defined Benefit Pension Transfer cases. Tavistock has fewer than
fifty such cases and the Company's pension transfer processes are of a high
standard. All pension transfer activity is covered by the Group's professional
indemnity insurance cover.
Shareholder Value
The Board has pursued several initiatives intended to enhance shareholder
value. These include share buy-backs and applications for Research and
Development tax credits.
In August 2022, the Company bought back 3,000,000 of its ordinary shares of 1p
each at a price of 9.35p per share and in November 2022, the Company bought
back a further 300,000 shares at a price of 7p per share. In each instance the
shares were subsequently cancelled to enhance subsequent earnings per share,
and thus the value, attributable to each share remaining in issue.
During the year, applications have been submitted to HMRC for Research and
Development tax credits in connection with various capital projects undertaken
over recent years. £360,000 of tax credits has been applied for so far which
would be of significant future value.
New Auditors
The Board recognises the benefits of an appropriate level of independent
scrutiny and challenge from the Company's auditors. However, it is at the same
time mindful of the need to obtain value for money on behalf of shareholders.
Thus, despite having enjoyed a good working relationship with the Company's
previous auditors, Crowe U.K. LLP, it was decided to appoint a new firm, RPG
Crouch Chapman LLP, to the role for the current year.
FINANCIAL RESULTS
Revenue
The Company has reported gross revenues for the year under review of £34
million (2022: £34 million). 96% of these revenues (£32.7 million) were
generated by the Group's advisory business, where the level of recurring
income exceeds 80%. The remainder was generated by the Group's model portfolio
service and its brief ownership of Hummingbird Limited.
Adjusted EBITDA
Adjusted EBITDA is defined as being Earnings before Interest Taxation
Depreciation and Amortisation as adjusted to remove the distorting effect of
one-off gains and losses arising on acquisitions/disposals as well as other
non-cash items. The Board considers adjusted EBITDA, rather than Operating
Profit, to be the best measure of the Company's underlying performance.
The Company has reported adjusted EBITDA of £0.14 million (2022: £1.37
million). The reduction followed the disposal of Tavistock Wealth, which
removed the largest EBITDA contributor from the Group, leaving the EBITDA
contribution from the advisory businesses to cover the Group's full central
overhead. Steps have been taken to remedy this position, as described above.
Operating Profit
The Company is reporting an Operating loss for the year to 31 March 2023 of
£0.94 million (31 March 2022: profit £30.67 million, including an
exceptional gain on the sale of Tavistock Wealth of £35.78 million and
one-off provisions of £4.42 million).
The year under review has been a period of transition for the Group and its
financial performance is summarised below:
31 Mar 2023 31 Mar 2022 Movement
£'000 £'000
Revenues 33,954 34,003
Adjusted EBITDA 141 1,372 90% decrease
Depreciation & Amortisation (1,244) (1,051) 18% increase
Share Based Payments (107) (1,010) 89% decrease
(Loss) from Operations- before exceptional items (1,210) (689) 76% increase
Provision for one off reorganisation costs - (800)
Provision for new costs as a consequence of past reorganisation - (2,250)
Regulatory provisions 342 (1,372)
Exceptional costs (69) -
Gain on sale of subsidiary - 35,778
Reported (Loss)/Profit from Operations (937) 30,667
(Loss)/Earnings per share (0.25)p 5.01p
Net Assets at year end 41,770 43,477 4% decrease
Cash Resources at year end 9,733 15,274 36% decrease
The Directors are confident that the results for the current financial year
(ending on 31 March 2024) will show a more positive outcome and reflect the
steps that have been taken to drive the Company forward.
Dividends
In July 2022, the Company disbursed an interim dividend of 0.07p per share,
representing a notable 40% increase compared to the dividend issued in October
2021. The Company is issuing a subsequent interim dividend of the same value,
0.07p.
OUTLOOK
The Company is now ready to operate on a much larger scale and has embarked on
the next phase of its growth plan. A great deal has been accomplished over the
last year through the hard work of our excellent staff. I would like to
acknowledge their dedication and support and to thank them for their
considerable contribution.
The Board looks forward to the coming year with confidence and I will update
you in due course.
Oliver Cooke
Chairman
19 September 2023
TAVISTOCK INVESTMENTS PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
Introduction
In keeping with the obligation placed upon Directors by S172 of the Companies
Act 2006, the Board, both individually and collectively, has continued to act
in a manner which they consider, in good faith, to be most likely to promote
the ongoing success of the Company for the benefit of its members.
In doing so they have, amongst other matters, given regard to the following:
· the likely long-term consequences of their decisions,
· the interests of the Company's employees,
· the need to foster the Company's relationships with its external
partners,
· the impact of the Company's operations on both the community and
the environment,
· the desirability of maintaining the Company's reputation for high
standards of business conduct, and
· the need to act fairly between members of the Company.
Against this background, the Board's focus has been on the strategic and
commercial development of the business together with key areas of operational
significance.
Strategic Development
As referred to in the Chairman's Statement, Tavistock has, over the last year,
been developed into a leaner and more efficient business.
The principal objective in the year under review has been to develop a
self-sustaining business model involving three specific initiatives.
The first being to attract and develop new advisers both from within the
industry and from elsewhere. To achieve this, management launched the
Tavistock Academy and created desk-based advice teams to filter new business
leads and to look after less complex clients. These facilities create a career
progression path for existing staff and enable new entrants, such as graduates
and apprentices, to be developed into fully qualified financial advisers.
The second being to increase the sources of new business leads. Relationships
with a number of new business introducers were established during the year and
the Company will shortly be launching the "Tell Me How" financial information
and advice portal which is also expected to generate new business enquiries,
as will Precise Protect's client base(see below).
The third initiative is a significant and on-going investment in technology to
support the scalability of the business, the speed with which acquisitions can
be integrated, the flow of business intelligence (management information) and
the efficiency of operations to enable advisers to spend more time servicing
clients.
Commercial Development
The Board's principal commercial objective has been to replace the profit
contribution generated by Tavistock Wealth, prior to its sale in August 2021,
by way of acquisition and to continue the organic growth of the Group's advice
business.
Acquisition Strategy
The Group is well placed to pursue its acquisition strategy, as it has a
further £14m of deferred consideration receivable from the sale of Tavistock
Wealth and has now secured access to a £50 million debt funding facility from
the Bank of Ireland.
The Company has made one acquisition of note, Precise Protect Limited, a
profitable and fast-growing UK wide protection business based in Bangor,
Northern Ireland.
Organic Growth
The Group's advisory activities reported a 4.5% rise in gross revenues and a
6% rise in gross profit contribution. Given the challenging market conditions
and the related falls in asset values during the year under review, the
achievement of this level of organic growth is considered to be creditable.
Investment in LEBC
In April 2022, the Company acquired a 21% stake in LEBC Holdings Limited. LEBC
is an independent national business providing financial advice to retail
clients and employee benefits advice to corporate clients.
The Board has been working closely with the management of LEBC to maximise the
value of this investment.
Other matters of Significance
Board Appointment
Johanna Rager, who joined Tavistock four years ago and has been a strong
contributor to the Group's Leadership Board throughout that period, has been
promoted to the Board in the role of Group Finance and Operations Director.
Her promotion is well-deserved.
Cost Reduction
Management has continued with the planned withdrawal from loss making or low
margin areas of activity. This included the closure of the Luxembourg RAIF
(Reserve Alternative Investment Fund), which had failed to achieve critical
mass.
The Group's low margin appointed representative network has also been
downsized through the managed exit of member firms and the transfer of
selected others to Group entities that operate with higher gross margins.
External Recognition
The high standard of Tavistock Private Client's advisory activities continues
to be recognised by the industry and I am pleased to advise that during the
year this company won several industry awards, further details of which can be
found in the Chairman's Statement.
The high standard of the Group's operational and compliance procedures has
also been recognised by the insurance industry. I am pleased to advise that
the Group has secured the renewal of its professional indemnity insurance
cover, on the same terms and at the same premium level as the last year, with
no increase either in excess levels or in restrictions on the scope of cover.
This is an unusual achievement in a tough and increasingly expensive,
insurance market and is a particular tribute to the Group's risk management
and compliance team.
Regulatory Regime
The Company faces the usual risks associated with operating in a highly
regulated environment, however, during the year two new, industry wide,
regulatory obligations have impacted the Company.
These are the introduction of a new wide-ranging Consumer Duty regime, and a
sector-wide requirement for firms to conduct a review of British Steel Defined
Benefit Pension Transfer cases. Each of these is covered in more detail in the
Chairman's Statement and I am pleased to advise that Tavistock is well placed
to address both requirements without material adverse impact on the Group's
future performance.
Shareholder Value
During the year the Board pursued several initiatives intended to enhance
shareholder value. These include the buy-back and cancellation of 3.3 million
of the Company's shares which enhanced subsequent earnings per share, and thus
the value, attributable to the shares remaining in issue.
They also submitted applications to HMRC for Research and Development tax
credits in connection with various capital projects undertaken over recent
years. The value of tax credits applied for to date is £360,000, and these
credits will reduce the amount of corporation tax that will be paid by the
Company in future years.
New Auditors
During the year the Board appointed RPG Crouch Chapman LLP to serve as the
Group's auditors in place of Crowe U.K. LLP. In the Directors' opinion, the
periodic rotation of the Group's auditors is desirable as it ensures an
appropriate level of independent scrutiny and challenge and at the same time
offers an opportunity to secure greater value for money on behalf of
shareholders.
Current Objective
In the current year the Board's objectives are to:
· extract further operational benefits from the ongoing data mining
project,
· complete the integration of Precise Protect,
· reap the rewards from its membership of the Group, and
· continue to develop the Group through the completion of further
acquisitions.
Financial Performance
The Company's financial performance is addressed in more detail in the
Chairman's Statement.
Corporate Governance
Corporate Governance activities are set out separately within the Corporate
Governance Report on pages 10 to 15.
Future Prospects
It remains the Board's objective to build a larger and more profitable
business. To this end, much has been done to enable the Company to operate
more efficiently and on greater scale. The Board has compiled a qualified
list of potential acquisition targets with which it is engaged.
The Company is well placed to progress the next stage of its development.
Approved by the Board of Directors and signed on its behalf by
Oliver Cooke
Chairman
19 September 2023
TAVISTOCK INVESTMENTS PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 MARCH 2023
Introduction
The Board continues to believe that good corporate governance reduces risk
within the business, can promote confidence and trust amongst its stakeholders
and underpins the effectiveness of the Company's management framework.
The Directors look to the Quoted Companies Alliance Corporate Governance Code
(the "QCA Code"), as being the basis of the Company's governance framework,
and consider that the Company complies with the QCA Code so far as is
practicable having regard to the size, nature and current stage of the
Company's development.
The QCA Code includes ten broad principles that the Company holds in mind as
it seeks to deliver growth to its shareholders in the medium and long-term.
These principles and the manner in which the Company seeks to comply with them
can be summarised as follows:
Principle 1:
Establish a strategy and business model which promote long-term value for
shareholders
· The Board acknowledges the ongoing interest in consolidation activity
within the financial services sector.
· The Board's strategy is to build a large and profitable financial
advisory and fund distribution business, which will increase its value to
potential consolidators and will thereby create the potential for shareholders
to achieve significant value from their investment in the Company.
· The Board is also focused on the development of a self-sustaining
business model, improving the recruitment and development of advisers,
maximising the sources of business enquiries and using technology to improve
operational efficiency and regulatory oversight.
· The Group's advisory business has grown rapidly and trades profitably
in its own right. Steps are being taken to further improve the efficiency and
profitability of its operations.
· With shareholder support, the Board will continue to arrange for the
Company to make market purchases of its own shares. Any shares purchased in
this manner will be cancelled which will reduce the number of shares that the
Company has in issue and will further increase the earnings per share of those
shares remaining in issue.
· The combination of an increase in the commercial value of the
business and a reduction in the number of shares in issue, will lead to a
long-term improvement in shareholder value.
· Key risks have been addressed in the Strategic Report.
Principle 2:
Seek to understand and meet shareholder needs and expectations
· The Board welcomes constructive engagement with shareholders.
· The Company believes that shareholder expectations are most
effectively managed through the release of regulatory announcements and
through discussion with shareholders at the Company's Annual General Meeting.
· The Executive Directors regularly engage with the Company's major
shareholders and ensure that the views expressed by them are communicated
fully to the Board.
· Board members make themselves available to meet with shareholders and
with potential investors as and when required.
Principle 3:
Take into account wider stakeholder and social responsibilities and their
implications for long-term success
· The Board places great emphasis on the safety, wellbeing and
mental health of all of the Company's employees and has engaged in a number of
initiatives to improve each of these.
· The Board recognises the importance of every member of the
Tavistock team and in doing so, has improved communication through the launch
of a Tavistock intranet site, enhanced existing maternity pay arrangements and
now provides every member of staff with death in service insurance cover.
· The Company also recognises the importance of engagement with its
stakeholder groups, which, in addition to its employees, include investors,
clients, strategic partners and the relevant authorities. The Board seeks to
treat each of these groups in a fair and open manner.
· The Company continues to support a national charity, the Clock
Tower Foundation, and to encourage the involvement of staff in various local
and national fund-raising events.
· The Company endeavours to take account of, and to respond to,
feedback received from stakeholders.
· Environmental responsibility and sustainability are important to
the Company, and a number of initiatives have been pursued to improve the
recycling of paper, to reduce the use of plastics and to reduce carbon
footprint through the greater use of online meeting technology and a reduction
in the number of office premises.
· As a contribution to the achievement of a net zero economy, the
Company continues to offer both a subsidised cycle to work scheme, and a
subsidised electric vehicle purchase scheme, both of which have been well
received. The Company has also installed a number of charging points for use
by staff driving hybrid or fully electric vehicles.
Principle 4:
Embed effective risk management throughout the organisation, considering both
opportunities and threats
· Last year, to improve the efficacy of its risk management systems,
the Company designed and introduced a market-leading approach to the on-going
management of compliance risk via the use of tailored scorecards for each
adviser. Scorecards assess the performance of each adviser based on their
experience, track record, business processed by product type and risk ratings
by product type. The updating of these scorecards has now been automated and
they can be provided to each adviser, manager, and business leader in real
time.
· The system allows each business to risk manage the levels of pre-sale
and post-sale file checking both by adviser and by product type. Certain
higher risk products such as pension transfers, VCTs and equity release will
always require pre-sale checking. However, for most products, the level and
frequency of oversight is adjusted in real-time based on individual adviser
performance risk.
· A risk management function has been established with a dedicated Risk
Manager and a separate Risk Committee. The Risk Manager's role is to identify,
monitor and report on all aspects of risk faced by the business. This enables
the Board to determine the level of the Company's risk appetite and to take
steps in mitigation where appropriate.
· Commercial risks and opportunities are considered by the Board and by
the Group's Leadership Board, which is comprised of the Executive Directors
and the heads of all major Group functions. The Leadership Board meets
formally on a monthly basis.
Principle 5:
Maintain the board as a well-functioning, balanced team led by the chair
· The composition, roles and responsibilities of the Board and of
the various Committees are set out on page 14 of the Report and Accounts. The
number of meetings held and Directors' attendance are also detailed.
· To enable the Board to discharge its duties in an effective
manner, all Directors receive appropriate and timely information. The Agenda
for each meeting is determined by the Chairman who arranges for briefing
papers to be distributed to all participants for consideration ahead of
meetings. All meetings are minuted and the accuracy of the minutes is
confirmed at the subsequent meeting before approval and signature by the
Chairman.
· The Chairman, Oliver Cooke, the Chief Executive, Brian Raven, and
the Group Finance & Operations Director, Johanna Rager, have considerable
experience of operating at board level in public and in private companies. The
Chairman is a qualified Chartered Accountant and has served as finance
director on the boards of various public companies. The Chief Executive has
held a number of sales, operational and leadership roles at board level within
public companies. The Group Finance & Operations Director has held senior
positions within a number of international companies. The Non-Executive
Directors, Roderic Rennison and Peter Dornan, both have extensive sector
knowledge and experience and come from strong regulatory backgrounds.
· The Chairman devotes a minimum of two days per week and the other
Executive Directors devote the whole of their time to the business of the
Group. The Non-Executive Directors devote one to two days per month to their
duties.
· Under the terms of their contracts, the Non-Executive Directors
are required to obtain the prior written consent of the Board before accepting
additional commitments that might conflict with the interests of the Group or
impact the time that they are able to devote to their role as a Non-Executive
Director of the Company.
· The Company does not currently have a separate Nominations
Committee as this is considered unnecessary given the Company's size and stage
of development. The need for such a committee will be kept under review by
the Board as the Company develops.
Principle 6:
Ensure that between them the directors have the necessary up-to-date
experience, skills and capabilities
· The Chairman complies with the continuing professional
development requirements of the Institute of Chartered Accountants in England
and Wales, of which he is a long-standing member. The other Executive
Directors, in conjunction with other members of the executive team, ensure
that their knowledge is kept up to date on key issues and developments
pertaining to the Company, its operational environment and to the Directors'
responsibilities as members of the Board. During the course of the year,
Directors have consulted and received advice as well as updates from the
Company's nominated advisor, company secretary, legal counsel and various
other external advisers on a number of matters, including corporate
governance. From time to time, members of the Board also participate in
industry forums.
· Biographies for each of the Directors can be found in the
Directors' Report.
Principle 7:
Evaluate board performance based on clear and relevant objectives, seeking
continuous improvement
· The Group has established separate Remuneration and Audit
Committees through which the Non-Executive Directors are able to monitor and
assess the performance of the Executive Directors and to hold them to account.
· The respective Board members periodically review and
cross-evaluate the Board's performance and effectiveness in the Company. Each
member of the Board is subject to an annual fitness and suitability assessment
overseen by the Group's, Human Resources department. In due course, the scope
of this assessment will be enhanced to focus more closely on objectives and
targets for improving performance.
· Directors' performance is open to assessment by shareholders and
all Directors are subject to re-election by the shareholders at least once
every three years.
Principle 8:
Promote a corporate culture that is based on ethical values and behaviours
· The Company's ethos is, to act at all times with honour,
dependability and vigilance. The Board also actively promotes a culture in
which the client is placed at the centre of everything that the Company
does.
· The Board places great emphasis on the wellbeing of the Company's
employees and on providing a safe and secure environment for them. The
Company's Employee Handbook provides a guideline for employees on the
day-to-day operations of the Company.
· The Company is similarly committed to a transparent, flexible and
open culture promoting family values and avoiding discrimination on the basis
of gender, religious belief, age, ethnicity or sexual orientation.
· The Company is mindful of the need for, and is committed to,
environmental responsibility and sustainability.
Principle 9:
Maintain governance structures and processes that are fit for purpose and
support good decision-making by the board
· Good decision making requires information, consideration,
discussion, and challenge followed by action, communication and the acceptance
of collective responsibility. This is accomplished through the employment of
Directors who have the confidence to express their views, through the prior
circulation of briefing papers allowing adequate time for their proper
consideration ahead of meetings. Board meetings are openly conducted, with the
accurate minuting of outcomes and the wider communication of those outcomes as
appropriate.
· Operational effectiveness and decision making has been improved
with the creation of a data warehouse collating data from the Company's
numerous systems, logs and spreadsheets to facilitate the automated production
of management information.
· The avoidance of conflicts of interest, through the delegation of
responsibility for certain areas to specialist committees, such as audit and
remuneration, has strengthened the governance structure within the Company.
· The Company's auditors are rotated on a periodic basis to ensure
that the Company and the Board are subjected to an appropriate level of
independent scrutiny and challenge.
Principle 10:
Communicate how the Company is governed and is performing by maintaining a
dialogue with shareholders and other relevant stakeholders
· Information on the Company's commercial progress and its
financial performance is disseminated to shareholders and to the market
through the announcement of its full-year and half-year results, the posting
of such announcements onto the Company's website in a timely manner and by
mailing copies of the Annual Report and Accounts to shareholders. These are
also made available for discussion with shareholders at the Company's AGM.
· Departmental heads liaise regularly and meet formally on a
monthly basis to share and review information on the Company's progress and to
discuss progress within their specific areas of responsibility.
· Other members of staff are briefed informally on an ad-hoc basis
via the Tavistock intranet and formally through emails from the Chief
Executive and other senior management as appropriate. In addition, as a series
of presentations are delivered at the Annual Company Day. On-line meetings are
used whenever practical to replace physical ones thereby reducing the level of
unnecessary business travel.
BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board is responsible for formulating, reviewing and approving the Group's
strategy, budgets and corporate actions. The Board is also responsible for
ensuring a healthy corporate culture. The Board currently comprises three
Executive Directors and two Non-Executive Directors.
The Executive Directors are:
Oliver Cooke Chairman
Brian Raven Chief Executive Officer
Johanna Rager Group Finance & Operations Director
The Non-Executive Directors are:
Roderic Rennison
Peter Dornan
The Non-Executive Directors have a strong compliance background and are
considered to be independent. All Directors are required to stand for
re-election at least once in every three years.
All members of the Board are equally responsible for the management and proper
stewardship of the Group. The Non-Executive Directors are independent of
management and free from any business or other relationship with the Company
or Group and are thus able to bring independent judgement to issues brought
before the Board.
The Board meets at least ten times per year and more frequently where
necessary to approve specific decisions. In the year under review the Board
met 15 times with no apologies for absence being recorded. Directors are free
to take independent professional advice as they consider appropriate at the
Company's expense.
The Board has established two Committees with clearly defined terms of
reference and detailed below are the members of the Committees and their
duties and responsibilities.
Audit Committee
The Audit Committee has primary responsibility for monitoring the quality of
internal controls and ensuring that the financial performance of the Group is
properly measured and reported. It receives reports from the Group's
management, the Company's Risk Committee and the Company's auditors relating
to the interim and annual accounts and the accounting and internal control
systems in use throughout the Group.
The members of the Audit Committee are as follows:
Peter Dornan (Non-Executive Director) Committee Chairman
Roderic Rennison (Non-Executive Director)
Oliver Cooke (Chairman)
The Committee approves the appointment and determines the terms of engagement
of the Company's auditors and, in consultation with the auditors, the scope of
the audit. The Audit Committee has unrestricted access to the Company's
auditors.
During the year under review the Audit Committee met twice and all members of
the Committee were in attendance.
Remuneration Committee
The Remuneration Committee is comprised of the two Non-Executive Directors,
Roderic Rennison and Peter Dornan, and is chaired by Roderic Rennison.
The Remuneration Committee reviews the performance of the Executive Directors
and approves any proposed changes to their remuneration packages, terms of
employment and participation in share option schemes and other incentive
schemes.
No Director may vote in connection with any discussions regarding their own
remuneration.
For the year under review, three Remuneration Committee meeting were held, and
both members of the Committee were in attendance.
Nomination Committee
The Directors do not consider it necessary, or appropriate, at present to
establish a Nomination Committee given the size of the Company. This will be
kept under review as the Company develops.
TAVISTOCK INVESTMENTS PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
Principal Activities, Review of the Business and Future Developments
The principal activity of the Group during the year was the provision of
support services to a network of financial advisers. The key performance
indicators recognised by management are gross revenues and operating profit,
as represented by adjusted EBITDA.
An overall review of the Group's performance during the year and its future
prospects is given in the Chairman's Statement and in the Strategic Report.
Substantial shareholdings
The Company has been advised of the following interests in more than 3% of its
ordinary share capital as at 31 August 2023:
Name Number of % of
Shares Ordinary Shares
Brian Raven 70,007,932 12.49%
Andrew Staley 55,950,204 9.98%
Oliver Cooke 30,600,000 5.46%
Lighthouse Group 30,487,805 5.44%
Hugh Simon 30,000,000 5.35%
Paul Millott 28,432,106 5.07%
Kevin Mee 28,241,858 5.04%
Directors
Details of the Directors of the Company who served during the period are as
follows:
Oliver Cooke
Chairman, aged 68
Oliver has over 40 years of financial and business development experience
gained in a range of quoted and private companies including over twenty-five
years' experience as a public company director. He has considerable experience
in the fields of corporate finance, strategic transformation, acquisitions,
disposals and fundraisings. Oliver is a Chartered Accountant and a Fellow of
the Association of Chartered Certified Accountants.
Brian Raven
Group Chief Executive, aged 67
Brian has been involved in the financial services sector since 2010. He has a
wide range of business experience, having held many sales and general
management posts at senior management and board level, including running
public companies on both AIM and the Official List. Most notably, in 1991
Brian founded Card Clear Plc, subsequently renamed Retail Decisions plc, a
business engaged in combating the fraudulent use of plastic payment cards. He
led the company until 1998 by which time it was an international Group, listed
on AIM, with a market capitalisation of some £100 million. As a principal,
Brian has been responsible for identifying, negotiating and integrating
numerous acquisitions, as well as for delivering organic growth.
Johanna Rager
Group Finance & Operations Director, aged 53
Johanna is an accomplished Finance Director with 20+ years of professional
achievement in Multinational companies. She has a track record of delivering
strategic, commercial and operational solutions across global organisations,
including the implementation of complex mergers and acquisitions. Johanna has
proven ability to deliver top and bottom lines and adapt to ever-changing
business environments while focusing on talent development and lean
processes.
Roderic Rennison
Non-Executive Director, Chairman of Remuneration Committee, aged 68
Roderic has more than 40 years of experience in financial services
encompassing a variety of roles including sales, strategy, product
development, proposition, operations and latterly acquisitions, mergers, and
integrations together with corporate affairs, risk and regulatory matters. He
provides consultancy services in the sector to a range of providers, fund
managers and intermediaries and particularly specialises on the Retail
Distribution Review, for which he chaired the professionalism and reputation
work stream.
Peter Dornan
Non-Executive Director, Chairman of Audit Committee, aged 67
Peter has spent more than 40 years in the financial services industry. Having
joined AEGON in 1981 as a sales consultant he progressed through a series of
sales and general management positions to being appointed to the executive
management board in 1999. He had executive responsibility for post-acquisition
integration of a number of businesses including Guardian Assurance, Positive
Solutions and Origen. Peter was also responsible for Scottish Equitable
International in Luxembourg from 1996 until 2002 and was appointed chairman of
AEGON Ireland when it was launched in 2002. Since 2012, Peter has acted as a
consultant to a number of businesses within the financial services sector with
a particular emphasis on governance, risk management and financial controls.
Diversity
Tavistock is an equal opportunities employer and does not discriminate against
staff on the basis of disability, age, religious belief, gender, ethnicity or
sexual orientation.
Greenhouse gas emissions
The Group currently has minimal greenhouse gas emissions to report from its
operations and does not have responsibility for any other emission producing
sources, as defined by the Companies Act 2006 (Miscellaneous Reporting)
Regulations 2018. As a consequence, it has not published a GHG Emissions
Statement.
Communication with shareholders
The Board welcomes constructive engagement with shareholders. Each shareholder
receives a copy of the annual report, which contains the Chairman's Statement.
The annual and interim reports, together with other corporate press releases
are made available on the Company's website www.tavistockinvestments.com. The
Annual General Meeting provides a forum for shareholders to raise issues with
the Directors. The Notice convening the meeting is issued with 21 clear days'
notice. Separate resolutions are proposed on each substantially separate
issue.
Going concern
Given the Company's cash resources at the year-end date and the £14 million
of deferred consideration receivable from the sale of Tavistock Wealth in
2021, the Board remains confident that the business has sufficient cash
resources to meet its working capital requirements for the foreseeable future,
being at least twelve months from the date of approval of financial
statements, and to justify use of the going concern assumption as the
appropriate basis on which to prepare the Group's accounts.
Financial instruments
Details of the use of financial instruments by the Group are contained in Note
16 of the financial statements.
Share capital
During the year the Company bought back and cancelled 3.3 million of its own
shares. It also issued 2.48 million new shares upon the exercise of share
options. Full details of the changes to share capital during the year are
summarised in Note 17 to the accounts.
Charitable and Political Donations
The Group made £3,790 in charitable donations in the year (2022: £23,800).
Investment
In April 2023, the Company acquired the business of Precise Protect Limited, a
profitable and fast-growing protection business based in Bangor, Northern
Ireland. This business is expected to contribute significantly to the
Company's growth in the current financial year.
Dividends
In July 2022, the Company disbursed an interim dividend of 0.07p per share,
representing a notable 40% increase compared to the dividend issued in October
2021. The Company is issuing a subsequent interim dividend of the same value,
0.07p.
Auditors
In February 2023, the Company appointed RPG Crouch Chapman LLP to serve as the
Company's auditors. A resolution reappointing RPG Crouch Chapman LLP will be
proposed at the Annual General Meeting in accordance with S489 of the
Companies Act 2006.
Supplier payment policy
The Group's policy is to agree terms of payment with suppliers when entering
into a transaction, ensure that those suppliers are aware of the terms of
payment by including them in the terms and conditions of the contract and pay
in accordance with contractual obligations. Trade creditors at 31 March 2023
represented 28 days' purchases (2022: 27 days).
Internal control
The Group has adopted the QCA's Corporate Governance Code. The key elements of
the internal control systems, which have regard to the size of the Group, are
that the Board meets regularly and takes the decisions on all material
matters, the organisational structure ensures that responsibilities are
defined, and authority only delegated where appropriate, and that regular
management accounts are presented to the Board to enable the financial
performance of the Group to be analysed.
The Directors acknowledge that they are responsible for the system of internal
control, which is established in order to safeguard the assets, maintain
proper accounting records and ensure that financial information used within
the business or published is reliable. Any such system of control can,
however, only provide reasonable, not absolute, assurance against material
misstatement or loss.
Directors' responsibilities
The Directors are responsible for preparing the annual report and financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial period. Under that law the Directors have elected to prepare the
Group financial statements in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006 and in
accordance with UK adopted international accounting standards including
Financial Reporting Standard 101, the Financial Reporting Standard applicable
in the UK and Republic of Ireland and applicable law. Under company law the
Directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Group and
Company and of the profit or loss of the Group for that period.
The Directors are also required to prepare financial statements in accordance
with the rules of the London Stock Exchange for companies trading securities
on the Alternative Investment Market.
In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently,
· make judgements and estimates that are reasonable and prudent,
· for the Group financial statements, state whether they have been
prepared in accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006,
· for the parent Company financial statements, state whether applicable
UK adopted international accounting standards including Financial Reporting
Standard 101 have been followed, subject to any material departures disclosed
and explained in the financial statements; and
· prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Group and the parent Company will
continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial
statements are made available on a website. Financial statements are
published on the Company's website in accordance with legislation in the
United Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company's website is the responsibility of
the Directors. The Directors' responsibility also extends to the ongoing
integrity of the financial statements contained therein.
Directors' interests
The Directors' beneficial interests in the Ordinary Share Capital and options
to purchase such shares are as follows:
Ordinary shares of 1p each
31 March 2023 31 March 2022
Share options Shares Share options Shares
Executive Directors:
Oliver Cooke 30,000,000 30,600,000 30,000,000 30,367,756
Brian Raven 40,000,000 70,007,932 40,000,000 68,759,362
Johanna Rager 5,000,000 2,276,000 - -
Non-Executive Directors:
Roderic Rennison - 705,398 - 705,398
Peter Dornan - 250,000 - 250,000
Executive Directors Date of Grant Weighted Average Exercise Price No. as at 31(st) March 2023 No. granted during the year No. as at 31(st) March 2023
Brian Raven 14/06/2021 5.25p 40,000,000 - 40,000,000
Oliver Cooke 14/06/2021 5.25p 30,000,000 - 30,000,000
Johanna Rager 04/01/2023 6.65p 4,000,000 1,000,000 5,000,000
Directors' statements as to disclosure of information to auditors
The Directors have taken all of the steps required to make themselves aware of
any information needed by the Group's auditors for the purposes of their audit
and to establish that the auditors are aware of that information.
The Directors are not aware of any audit information of which the auditors are
unaware.
Approved by the Board of Directors and signed on its behalf by
Oliver Cooke
Chairman
19 September 2023
TAVISTOCK INVESTMENTS PLC
AUDIT COMMITTEE REPORT
FOR THE YEAR ENDED 31 MARCH 2023
On behalf of the Board, I am pleased to present the Audit Committee report for
the financial year ended 31 March 2023.
Principal Responsibilities of the Committee
· Ensuring the financial performance of the Group is properly reviewed,
measured and reported;
· Monitoring the quality and adequacy of internal controls and internal
control systems implemented across the Group;
· Receiving and reviewing reports from the Group's management and
auditors relating to the interim and annual accounts;
· Reviewing reports from the Company's Risk Committee and considering
risk management policies and systems;
· Advising on the selection, appointment, re-appointment and
remuneration of independent external auditors and scheduling meetings with
external auditors, independent of management where appropriate, for
discussions and reviews; and,
· Reviewing and monitoring the extent and independence of non-audit
services provided by external auditors.
Members of the Committee
The Committee members are the two Non-Executive Directors, Peter Dornan
(Committee Chairman) and Roderic Rennison, and Oliver Cooke who is a Chartered
Accountant and has previously served as a partner in public practice.
The Committee met twice during the year, with all members in attendance.
Audit Process
The audit process commenced with the preparation by the auditors of an audit
plan, which contained information regarding the proposed audit process,
timetable, targeted areas and the general scope of work and considered any
pertinent matters or areas for special inclusion.
Following the audit, an Audit Findings Report was prepared by the auditors and
submitted to the Audit Committee, and this was followed by a conference call
with the Committee to review and discuss the contents of the Report. The Audit
Committee then provided a report to the Board together with its
recommendations. For the year ended 31 March 2023, no major areas of concern
were highlighted.
Risk Management and Internal Control
As referred to under Principle 4 of the Corporate Governance Report, the Group
has established a separate Risk Committee, whose role is to identify, monitor
and report on the risks faced by the Company. The Audit Committee reviews
reports produced by the Risk Committee from time to time and considers that
the framework is operating effectively.
The Audit Committee approved the rotation of the Company's auditors and
oversaw the selection and appointment of RPG Crouch Chapman LLP as auditors.
The Audit Committee reviewed the non-audit services provided by the Company's
auditors and considered that there was no threat to their independence in the
provision of these services and that satisfactory controls were in place to
ensure this independence.
Internal Audit
At present, the Group does not have an internal audit function and the
Committee believes that despite this, management is able to derive assurances
as to the adequacy and effectiveness of internal controls and risk management
procedures.
Approved by the Committee and signed on its behalf by
Peter Dornan
Committee Chairman
19 September 2023
TAVISTOCK INVESTMENTS PLC
REMUNERATION COMMITTEE REPORT
FOR THE YEAR ENDED 31 MARCH 2023
Compliance
Described below are the principles that the Group has applied in relation to
Directors' remuneration.
The Remuneration Committee
For reasons of independence the only members of the Remuneration Committee are
the Company's two Non-Executive Directors, Roderic Rennison (Committee
Chairman) and Peter Dornan.
The Committee is mindful of the need to attract, retain and reward key staff.
It reviews the scale and structure of the Executive Directors' and senior
employees' remuneration, the terms of their service agreements and the extent
of their participation in share option schemes and any other bonus
arrangements.
The remuneration of, and the terms and conditions applying to, the
Non-Executive Directors are determined by the entire Board.
During the year under review, the Remuneration Committee met three times with
both members in attendance.
Service contracts
The term of the Directors' service contracts can be summarised as follows:
Oliver Cooke Start Date: 3 May 2013 Terminable on six months' notice
Brian Raven Start Date: 12 May 2014 To 31 March 2024, terminable thereafter on twelve months' notice
Johanna Rager Start Date: 11 January 2023 To 31 December 2024, terminable thereafter on twelve months' notice
Non-executive Directors
Roderic Rennison Start Date: 12 May 2014 Initial term 2 years, terminable at any time on three months' notice
Peter Dornan Start Date: 22 August 2017 Initial term 2 years, terminable at any time on three months' notice
Directors' remuneration
Details of each Director's remuneration are provided in Note 6 to the
financial statements entitled Staff Costs.
Directors' interest in shares
Details of the Directors beneficial shareholdings as at 31 March 2023 can be
found in the Directors Report.
Approved by the Committee and signed on its behalf by
Roderic Rennison
Committee Chairman
19 September 2023
TAVISTOCK INVESTMENTS PLC
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF TAVISTOCK INVESTMENTS PLC
FOR THE YEAR ENDED 31 MARCH 2023
Opinion
We have audited the financial statements of Tavistock Investments Plc (the
'Company') and its subsidiaries (the 'Group') for the year ended 31 March 2023
which comprise the Consolidated statement of comprehensive income, the
Consolidated statement of financial position, the Consolidated statement of
changes in equity, the Consolidated statement of cash flows, the Company
statement of financial position, the Company statement of changes in equity
and the related notes to the financial statements, including a summary of
significant accounting policies.
The financial reporting framework that has been applied in the preparation of
the Group financial statements is applicable law and International Financial
Reporting Standards as adopted in the United Kingdom (IFRS). The Company
financial statements have been prepared in accordance with applicable law and
United Kingdom Accounting Standards, including FRS 101 Reduced Disclosure
Framework (UK GAAP).
In our opinion:
· the financial statements give a true and fair view of the state
of the Group's and of the Company's affairs as at 31 March 2023 and of the
Group's loss for the year then ended;
· the Group financial statements have been properly prepared in
accordance with IFRS;
· the Company financial statements have been properly prepared in
accordance with UK GAAP; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and the parent company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed entities, and we
have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the entity's ability to continue to adopt the going concern
basis of accounting included:
· Review budgets and cash flows projections up to 31 March 2026;
· Comparison of budget to past performance;
· Sensitise cash flows for variations in trading performance and
working capital requirements;
· Consider if there is any other information brought to light
during the audit that would impact on the going concern assessment; and
· Review of working capital facilities and assess headroom
available in the projections.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Tavistock Investments Plc's
ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our approach to the audit
In planning our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements. In particular, we looked at
where the directors made subjective judgements, for example in respect of
significant accounting estimates. As in all of our audits, we also addressed
the risk of management override of internal controls, including evaluating
whether there was evidence of bias by the directors that represented a risk of
material misstatement due to fraud.
We tailored the scope of our audit to ensure that we performed sufficient work
to be able to issue an opinion on the financial statements as a whole, taking
into account the structure of the Group and the Company, the accounting
processes and controls, and the industry in which they operate. We performed
full-scope audits of the material components of the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement we identified (whether or not due to fraud), including those
which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team.
Each matter identified was addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. The key audit matters
identified are listed below.
Carrying value of intangible assets
At the year-end, the Group held £19.6m (2022: £18.3m) of intangible assets, Our work included:
of which £12.6m relates to goodwill, £4.9m to client lists, and £2.1m to
internally generated assets. • Reviewing the initial goodwill calculation, agreeing consideration
paid to the purchase agreement and the net assets acquired to the company
In accordance with IAS36 Impairment of Assets, entities are required to balance sheet at the date of acquisition;
conduct annual impairment tests for certain intangible assets.
• Reviewing management's goodwill impairment review and considering
Given the subjectivity of estimates involved, we consider the carrying value this for reasonableness, including challenging key assumptions in the model
of goodwill to be a key audit matter. and using sensitivity analysis where relevant; and
• Reviewing the individual books of business across the companies
and the impairment review prepared by management, flexing these accordingly to
review for any indicators of impairment.
Revenue recognition
Revenue recognition has a presumed risk of fraud under International Auditing Our audit work included:
Standards.
• Performing detailed walkthroughs to verify the operation of
The majority of fees are in relation to initial and ongoing services in terms controls in place;
of revenue recognised.
• Testing a sample of transactions throughout the year to agree to
Given the significant judgements in the estimated outcomes of open contractual external supporting documents;
positions at the period end and unsettled at the date of approval of the
financial statements, we consider revenue recognition to be a key audit • Performing analytical procedures by month and between each
matter. business unit, investigating significant fluctuations; and
• Performing cut off testing to ensure revenue has been recorded in
the correct period and reviewed the accuracy of accrued income at the
year-end.
Legal and provisions
As the Group operates in the regulated area of financial services, it is Our audit work included:
exposed to the risk of claims with respect to current and historic work
performed for clients. At the year-end, the Group recognised provisions of • Reviewing reasonableness of the provisions brought forward;
£6.0m (2022: £8.0m) with respect to such claims.
• Vouching expected claims/workings through to documentation;
Under IAS 37, provisions must be recognised when it is probably that an
outflow of cash or other economic resource will be required to settle the • Tracing claims completed in the year through to bank statements;
provision.
• Discussions with management about any open cases and claims;
Given the subjective nature of the estimates involved, we consider the
carrying value of legal provisions to be a key audit matter. • Reviewing and considering the adequacy of the disclosure within
the financial statements.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements. We consider materiality to be
the magnitude by which misstatements, including omissions, could influence the
economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
We have based materiality on 2% of revenue for the operating components. This
benchmark is considered to be the most significant determinant of the group's
financial performance used by the users of the financial statements. Overall
materiality for the Group as a whole was set at £0.7m. For each component,
the materiality was set at a lower level. The Company materiality was set at
£0.5m, based on 2% of gross assets, capped at 75% of group materiality as
that is considered the most appropriate measure for a holding company.
We agreed with the Audit Committee that we would report on all differences in
excess of 5% of materiality relating to the group financial statements. We
also report to the Audit Committee on financial statement disclosure matters
identified when assessing the overall consistency and presentation of the
consolidated financial statements.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report, other than the
financial statements and our auditor's report thereon. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared
in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not visited by us;
or
· the parent company financial statements are not in agreement with
the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities on
page 19, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group's and the parent company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue our opinion in an auditor's report. Reasonable
assurance is a high level of assurance, but does not guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below:
· We obtained an understanding of the legal and regulatory
frameworks within which the Company/Group operates focusing on those laws and
regulations that have a direct effect on the determination of material amounts
and disclosures in the financial statements. The laws and regulations we
considered in this context were the Companies Act 2006 and relevant taxation
legislation.
· We identified the greatest risk of material impact on the
financial statements from irregularities, including fraud, to be the override
of controls by management. Our audit procedures to respond to these risks
included enquiries of management about their own identification and assessment
of the risks of irregularities, sample testing on the posting of journals and
reviewing accounting estimates for biases.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
Auditor's Report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Mark Wilson MA, FCA
Senior Statutory Auditor
for and on behalf of RPG Crouch Chapman LLP
Chartered Accountants and Registered Auditors
5th Floor, 14-16 Dowgate Hill
London
EC4R 2SU
19 September 2023
RPG Crouch Chapman LLP is a limited liability partnership registered in
England and Wales with registered number OC375705.
TAVISTOCK INVESTMENTS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
Year Year ended
ended
31 March 31 March
2023 2022
Note £'000 £'000
Revenue 3 33,954 34,003
Cost of sales 3 (22,717) (22,053)
Gross profit 11,237 11,950
Administrative expenses 3 (12,174) (17,061)
Gain on sale of subsidiary - 35,778
(Loss)/Profit from Total Operations 4 (937) 30,667
MEMORANDUM ONLY- Adjusted EBITDA 141 1,372
Depreciation & Amortisation 9 & 10 (1,244) (1,051)
Share Based Payments (107) (1,010)
Provision for one off reorganisation costs 14 - (800)
Provision for new costs as a consequence of past reorganisation 14 - (2,250)
Regulatory provisions 14 342 (1,372)
Exceptional costs (69) -
Gain on sale of subsidiary - 35,778
(Loss)/Profit from Operations (937) 30,667
Finance income/(costs) 139 (144)
LLP members remuneration charged as an expense (551) (519)
Share of loss in associate (219) -
(Loss)/Profit before taxation (1,568) 30,004
Taxation 7 173 (363)
(Loss)/Profit after taxation and attributable to equity holders of the parent (1,395) 29,641
and total comprehensive income for the year
(Loss)/Profit per share
Basic 8 (0.25)p 5.01p
Diluted 8 (0.25)p 4.40p
No other comprehensive income during the year (2022 - £Nil)
The notes below form part of the Group financial statements.
TAVISTOCK INVESTMENTS PLC
Company number: 05066489
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
31 March 2023 31 March 2022
Note £'000 £'000 £'000 £'000
ASSETS
Non-current assets
Tangible fixed assets 9 1,971 1,732
Intangible assets 10 19,560 18,309
Investment in associates 11 10,035 -
Trade and other receivables 12 8,740 12,090
Total non-current assets 40,306 32,131
Current assets
Trade and other receivables 12 10,473 13,039
Cash and cash equivalents 9,733 15,274
Total current assets 20,206 28,313
Total assets 60,512 60,445
LIABILITIES
Current liabilities 13 (10,726) (6,722)
Non-current liabilities
Loan & Lease Liability 13 (999) (732)
Payments due regarding purchase of client lists 13 (923) (1,298)
Provisions 14 (6,004) (7,955)
Deferred taxation 15 (89) (262)
Total liabilities (18,741) (16,968)
Total net assets 41,771 43,477
Capital and Reserves
Share Capital 17 5,567 5,578
Share Premium 17 1,614 1,541
Capital Redemption Reserve 17 534 501
Retained Earnings 34,056 35,857
Total equity 41,771 43,477
The financial statements were approved by the Board and authorised for issue
on 19 September 2023.
Oliver Cooke
Chairman
The notes below form part of the Group financial statements.
TAVISTOCK INVESTMENTS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
Share Capital Share Premium Capital Redemption Reserve Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000
6,079 1,541 8,114 15,734
31 March 2021 -
Profit after tax and total comprehensive income - - - 29,641 29,641
Equity settled share based payments - 1,013 1,013
- -
Buy-back of shares (501) (2,607) (2,607)
- 501
Dividend payment - (304) (304)
- -
31 March 2022 5,578 1,541 501 35,856 43,477
Loss after tax and total comprehensive income -
-
- (1,395) (1,395)
Equity settled share based payments - 107 107
- -
Buy-back of shares (33) 73 (302) (230)
33
Dividend received - 373 373
- -
Closure of subsidiary - (192) (192)
- -
Dividend payment - (391) (391)
- -
Share options exercised 22 - 22
- -
31 March 2023 5,567 1,614 534 34,056 41,771
The notes below form part of the Group financial statements.
TAVISTOCK INVESTMENTS PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
Year ended Year ended
31 March 2023 31 March 2022
£'000s £'000s
Cash flow from operating activities
(Loss)/Profit from normal Operations (1,568) 30,004
Adjustments for:
Share based payments 107 1,010
Depreciation of tangible fixed assets 681 649
Amortisation of intangible assets 563 402
Movement on one-off reorganisation provision - 800
Provision for new costs as a consequence of past reorganisation - 2,250
Regulatory provisions (342) 1,372
Exceptional costs 69 -
Finance (income)/costs (139) 144
Tax paid - (397)
Gain on sale of subsidiary - (35,778)
Cash flows from operating activities before changes in working capital (629) 456
Decrease/(increase) in trade and other receivables 111 (3,318)
(Decrease)/increase in trade and other creditors (1,274) 3,977
Cash (used)/generated in Operations (1,792) 1,115
Investing activities
Intangible assets- client lists and internally developed assets (732) (434)
Purchase of tangible fixed assets (1,176) (1,354)
Purchase of associate (6,060) -
Deferred consideration payments (1,621) (1,543)
Cash received on sale of client list 100 -
Cash paid for subsidiary (1,515) -
Cash received on sale of subsidiary entities 7,461 19,288
Net cashflow (used)/generated from investing activities (3,543) 15,957
Financing activities
Finance income/(costs) 139 (144)
New leases 698 863
Lease repayment (445) (476)
Loan Repayments - (1,493)
CBILS repayment - (2,094)
Buy-back of shares (302) (2,607)
Dividend payment (391) (304)
Exercise of share options 95 -
Net cashflow from financing activities (206) (6,255)
Net change in cash and cash equivalents (5,541) 10,817
Cash and cash equivalents at start of the year 15,274 4,457
Cash and cash equivalents at end of the year 9,733 15,274
The notes below form part of the Group financial statements.
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Net (decrease)/increase in cash and cash equivalents (5,541) 10,817
New lease liability (698) (861)
Lease repayment 445 476
Repayment of loans - 3,587
Movement in net debt in the year (5,794) 14,019
Net debt at 1 April 2022 14,059 40
Net debt at 31 March 2023 8,265 14,059
The net debt comprises:
Year ended Year ended
31 March 2023 31 March 2022
£'000 £'000
Cash 9,733 15,274
Current leases (469) (483)
Non-current leases (999) (732)
Net debt at 31 March 2023 8,265 14,059
Reconciliation of net debt:
2022 Cashflows New Leases 2023
Lease liabilities 1,211 (446) 698 1,463
Long term debt 1,211 (446) 698 1,463
The notes below form part of the Group financial statements.
TAVISTOCK INVESTMENTS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
1. ACCOUNTING POLICIES
Principal accounting policies
Tavistock Investments Plc ("The Company") is a public company limited by share
capital, incorporated in the United Kingdom with registered company number
05066489 and its registered office is at 1 Queen's Square, Ascot Business
Park, Lyndhurst Road, Ascot, Berkshire, SL5 9FE. The principal accounting
policies applied in the preparation of these consolidated financial statements
are set out below. These policies have been consistently applied to all the
periods presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements have been prepared in accordance with UK
adopted International Financial Reporting Standards ("IFRS") in conformity
with the requirements of the Companies Act 2006.
The financial statements are presented in pounds sterling and all values are
rounded to the nearest thousandth (£'000), except when otherwise indicated.
Basis of Consolidation
The Group comprises a holding company and several individual subsidiaries and
all of these have been included in the consolidated financial statements in
accordance with IFRS10 Consolidated Financial Statements and the principles of
acquisition accounting as laid out by IFRS 3 Business Combinations.
Subsidiaries are consolidated from the date of their acquisition, being the
date on which the group obtains control and continue to consolidate until the
date such control ceases. Control comprises the power to govern the financial
and operating policies of the subsidiary so as to obtain benefit from its
activities.
Revenue recognition
Revenues within the advisory business are predominantly comprised of advisory
support commissions. Income is recognised and accrued for when control has
transferred, the resulting cash will then be received at the point the
underlying transaction settles.
Revenues within the investment management business are calculated as a
percentage of funds under management. Income is calculated daily and is
received and recognised monthly. The charges are collected directly from the
assets held and there are no significant payment terms. All revenues arise
over time and are received in arrears, none are linked to subsequent
performance obligations.
Intangible assets
Intangible assets include goodwill arising on the acquisition of subsidiaries
and represents the difference between the fair value of the consideration
payable and the fair value of the net assets that have been acquired.
Also included within intangible assets are various assets separately
identified in business combinations (such as FCA permissions, established
systems and processes, adviser and client relationships and brand value) to
which the Directors have ascribed a commercial value and a useful economic
life. The ascribed value of these intangible assets is being amortised on a
straight-line basis over their estimated useful economic life, which is
generally considered to be between 5 and 10 years.
During the year the Group has invested in the development of a number of key
initiatives designed to generate additional FUM inflows. Where appropriate,
this expenditure has been capitalised as intangible assets.
Intangible assets are initially recognised at cost.
Costs that are directly associated with the production of identifiable and
unique products controlled by the Group and capable of producing future
economic benefits are recognised as intangible assets. Direct costs include
employee costs and directly attributable overheads. After recognition, under
the cost model, intangible fixed assets are measured at cost less any
accumulated amortisation and any accumulated impairment losses.
Development costs are recognised as assets only if all of the following
conditions are met:
· an asset is created that can be separately identified,
· it is probable that the asset created will generate future economic
benefits; and
· the development cost of the asset can be measured reliably.
Client lists, regulatory approvals and systems and internally developed assets
are considered to have a finite useful life and are only amortised once ready
for use. If a reliable estimate of the useful life cannot be made, the useful
life shall not exceed 10 years.
Financial assets
Deferred consideration received, accrued income and receivables: These assets
are deemed to be non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They arise principally
through the provision of goods and services to customers (trade receivables),
but also incorporate other types of contractual monetary asset. They are
carried at amortised cost using the effective interest method.
Financial liabilities
Payments made under leases (net of any incentives received from the lessor)
have been recognised in accordance with IFRS 16 as follows:
The Group's eases primarily relate to properties. Lease terms are negotiated
on an individual basis and contain a wide range of different terms and
conditions. Property leases will often include extension and termination
options, open market rent reviews, and uplifts.
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
individual lessee company's incremental borrowing rate taking into account the
duration of the lease. The weighted average lessee's incremental borrowing
rate applied to lease liabilities recognised in the statement of financial
position at the date of initial application.
The lease liability is subsequently measured at amortised cost using the
effective interest method, with the finance cost charged to profit or loss
over the lease period to produce a constant periodic rate of interest on the
remaining balance of the liability.
The right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct costs incurred, less
any lease incentives received. The right-of-use asset is typically depreciated
on a straight-line basis over the lease terms. In addition, the right-of-use
asset may be adjusted for certain remeasurements of the lease liability, such
as market rent review uplifts. Please refer to Note 9 for further details.
Share based payments
Where share options are awarded to employees, the fair value of the options at
the date of grant is charged to the statement of comprehensive income on a
straight-line basis over the vesting period. Non-market vesting conditions are
taken into account by adjusting the number of options expected to vest at each
statement of financial position date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of options
that eventually vest. Market vesting conditions are factored into the fair
value of the options granted. The cumulative expense is not adjusted for
failure to achieve a market vesting condition.
Fair value is calculated using the Black-Scholes model, details of which are
given in Note 18.
Tangible fixed assets
Tangible fixed assets are stated at cost net of accumulated depreciation and
provision for impairment. Depreciation is provided on all tangible fixed
assets, at rates calculated to write off the cost less estimated residual
value, of each asset on a straight-line basis over its expected useful life.
The residual value is the estimated amount that would currently be obtained
from disposal of the asset if the asset were already of the age and in the
condition expected at the end of its useful economic life.
The method of depreciation for each class of depreciable asset is:
Computer
equipment
- 3 years straight line
Office fixtures, fittings &
equipment -
5 years straight line
Motor Vehicles
- 5 years straight line
Impairment of Assets
Impairment tests on goodwill are undertaken annually at the reporting date.
The recoverable value of goodwill is estimated on the basis of value in use,
defined as the present value of the cash generating units with which the
goodwill is associated. When value in use is less than the book value, an
impairment is recorded and is irreversible.
In assessing the carrying value of Assets, the Directors have used 5-year
forecasts and discounted the anticipated future cashflows by entity and assets
class over 5 years and then in perpetuity using a discount rate of 15%. In all
scenarios, the recoverable amount exceeded the carrying value.
Other non-financial assets are subject to impairment tests whenever
circumstances indicate that their carrying amount may not be recoverable.
Where the carrying value of an asset exceeds its estimated recoverable value
(i.e.the higher of value in use and fair value less costs to sell), the asset
is written down accordingly. Where it is not possible to estimate the
recoverable value of an individual asset, the impairment test is carried out
on the asset's cash-generating unit. The carrying value of tangible fixed
assets is assessed in order to determine if there is an indication of
impairment. Any impairment is charged to the statement of comprehensive
income. Impairment charges are included under administrative expenses within
the consolidated statement of comprehensive income.
Taxation and deferred taxation
Corporation tax payable is provided on taxable profits at prevailing rates.
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the Statement of Financial Position differs from
its tax base, except for differences arising on:
· the initial recognition of goodwill; and
· the initial recognition of an asset or liability in a transaction which
is not a business combination and at the time of the transaction affects
neither accounting nor taxable profit.
Recognition of deferred tax assets is restricted to those instances where it
is probable that future taxable profit will be available against which the
asset can be utilised. The amount of the asset or liability is determined
using tax rates that have been enacted or substantively enacted by the
reporting date and are expected to apply when the deferred tax
liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a legally
enforceable right to offset current tax assets and liabilities and the
deferred tax assets and liabilities relate to taxes levied by the same tax
authority on either:
· the same taxable Group company; or
· different Group entities which intend either to settle current tax assets
and liabilities on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant amounts
of deferred tax assets or liabilities are expected to be settled or recovered.
Provisions
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of past events, it is probable that an outflow of
resources will be required to settle the obligation, and the amount can be
reliably estimated. Provisions are measured at the present value of
management's best estimate of the expenditure required to settle the present
obligation at the end of the reporting period.
Where some or all of the expenditure required to settle a provision is
expected to be reimbursed by another party, the reimbursement is recognised
when, and only when, it is virtually certain that reimbursement will be
received if the Company settles the obligation. The reimbursement is treated
as a separate asset. The amount recognised for the reimbursement cannot exceed
the amount of the provision.
As referenced in Note 14, settlement in relation to the claims provision has
been made on a case by case basis in respect of the cost of defending claims
and, where appropriate, the estimated cost of settling claims. Where recovery
of the cost of settlement is expected to be virtually certain, a corresponding
asset is recognised. Any net provision expense is recognised in the Group's
statement of comprehensive income.
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of these financial statements has required management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and reported amounts of
revenues and expenses during the reporting period. These judgements and
estimates are based on management's best knowledge of the relevant facts and
circumstances, having regard to prior experience, but actual results may
differ from the amounts included in the financial statements. Information
about such judgements and estimations is contained below, as well as in the
accounting policies and accompanying notes to the financial statements.
Impairment of goodwill and other intangible assets
The Group is required to test, on an annual basis, whether goodwill has
suffered any impairment. Other intangible assets are tested whenever
circumstances indicate that their carrying value may not be recoverable. The
recoverable amount is estimated based on value in use calculations.
In assessing the carrying value of Goodwill the Directors have used 5-year
forecasts which have been discounted by entity over 5 years and then in
perpetuity using a discount rate of 15%. The forecast assumes no annual growth
in revenue after year one and a 2% annual increase in costs. Sensitivity
analysis was also performed alongside this to create various scenarios, with
different growth rates. In all scenarios, the recoverable amount exceeded the
carrying value.
Internally Developed Intangible Assets
Included in the amount capitalised in respect of key initiatives are
apportioned staff costs. Staff costs are capitalised where the relevant staff
member is directly involved in the product development process. Management
estimates the amount of time each employee has spent on each project during
the reporting period and prorate the staff costs accordingly.
Share based payments
The share-based payment charge to the Profit or Loss account is estimated from
the operation of the Black-Scholes Model in respect of share options granted
by the Company as referred to in more detail in Note 18.
Amortisation of Development costs and other Intangibles
Product development costs are being amortised over 10 years. The estimated
useful economic life of the intangible assets are based on management's
judgement and experience. When management identifies that the actual useful
economic life differ materially from the estimates used to calculate
amortisation, that charge is adjusted accordingly.
Claims provision
As outlined in Note 14, three provisions have been made in relation to
potential exposure in relation to historic advice.
3. SEGMENTAL INFORMATION
A segmental analysis of revenue and expenditure for the year is:
Group (Plc) Investment Management Advisory Business 2023 Group (Plc) Investment Management Advisory Business 2022
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 245 965 32,744 33,954 135 2,550 31,319 34,004
Cost of sales (336) (276) (22,105) (22,717) (303) (388) (21,362) (22,053)
Gross profit (91) 689 10,639 11,237 (168) 2,162 9,957 11,951
Attributed Expenses (4,069) (732) (7,539) (12,340) (3,213) (1,069) (7,348) (11,630)
Other Administrative expenses
Share based payments (107) (1,010)
Provision for one off reorganisation costs - (800)
Provision for new costs as a consequence of past reorganisation - (2,250)
Regulatory provisions 342 (1,372)
Exceptional costs (69) -
Gain on sale of subsidiary - 35,778
(Loss)/Profit from operations (937) 30,667
The segmental analysis above reflects the parameters applied by the Board when
considering the Group's monthly management accounts. The Directors do not make
reference to segmental analysis as part of the day-to-day assessment of the
business therefore have not disclosed a segmental consolidated statement of
financial position within the accounts.
During the year under review the Group's revenue was generated exclusively
within the UK.
In calculating the gain on sale of subsidiary, the deferred consideration of
£20 million has been discounted by £1.5 million to reflect the time cost of
money.
4. (LOSS)/PROFIT FROM OPERATIONS
2023 2022
£'000 £'000
This is arrived at after charging:
Staff costs (see Note 6) 8,711 9,322
Depreciation on tangible fixed assets 681 649
Amortisation of intangible fixed assets 563 402
Lease expense- property 545 414
Provision for one off reorganisation costs - 800
Provision for new costs as a consequence of past reorganisation - 2,250
Regulatory provisions (342) 1,372
Exceptional costs 69 -
Gain on sale of subsidiary - 35,778
Auditor's remuneration in respect of the Company 8 9
Audit of the Group and subsidiary undertakings 58 68
Auditor's remuneration- non-audit services- Interim 8 3
74 80
5. BUSINESS COMBINATIONS
5. BUSINESS COMBINATIONS
On 23 May 2022 the Group acquired LEBC Hummingbird Limited, a subsidiary of
LEBC Group Limited, obtaining 100% ownership of the ordinary shares. The
acquisition carried a value of £3 million, with £1.5 million settled in
immediate cash payment, while the remaining £1.5 million was contingent upon
deferred cash considerations. During its tenure within the Tavistock Group,
Hummingbird Limited showcased strong performance metrics, achieving a revenue
of £451,000, an EBITDA of £328,000, and a profit of £328,000.
Hummingbird Limited has specialised in providing research on asset class
allocations tailored for utilisation within funds and model portfolios. Its
services are meticulously designed to assist investment managers in aligning
their investment solutions with distinct risk profiles, as identified through
the administration of "attitude to risk" questionnaires completed by clients.
On 17 August 2022, Hummingbird Limited was divested back to LEBC Group Limited
under the same terms as the initial acquisition, amounting to £3 million. A
sum of £1.5 million in cash was reimbursed to Tavistock in accordance with
the established agreement.
6. STAFF COSTS
2023 2022
£'000 £'000
Staff costs for all employees, including Directors and key management consist
of:
Wages, fees and salaries 7,379 7,264
Social security costs 827 721
Pensions 398 327
8,604 8,312
Share based payment charge 107 1,010
8,711 9,322
2023 2022
The average number of employees of the group during the year was as follows: Number Number
Directors and key management 12 11
Operations and administration 149 133
161 144
The remuneration of the highest paid director was £474,769 (2022: £462,284).
The total remuneration of key management personnel was £2,438,258 (2022:
£2,268,787). Included in this figure are pension costs amounting to £242,535
(2022: £187,748).
Outstanding pension commitments included in the balance sheet amounted to
£41,173 (2022: £39,592).
All pension contributions represent payments into defined contribution
schemes.
Directors' Detailed Emoluments
Details of individual Directors' emoluments for the 2023 are as follows:
Salary & fees Benefits in kind & allowances Performance Bonus Pension contributions Total
£ £ £ £ 2023
O Cooke 211,369 35,349 24,000 31,680 302,398
B Raven 322,000 44,469 60,000 48,300 474,769
J Rager** 31,075 2,194 1,828 2,970 38,067
P Dornan* 30,000 - - - 30,000
R Rennison* 30,000 - - - 30,000
624,444 82,012 85,828 82,950 875,234
* Denotes non-executive Director.
** Joined Board on 26(th) January 2023
Details of individual Directors' emoluments for the 2022 are as follows:
Salary & fees Benefits in kind & allowances Performance Bonus Pension contributions Total
£ £ £ £ 2022
O Cooke 220,000 37,186 50,000 33,000 340,186
B Raven 280,000 40,284 100,000 42,000 462,284
P Dornan* 30,000 - - - 30,000
R Rennison* 30,000 - - - 30,000
560,000 77,470 150,000 75,000 862,470
Element Purpose and link to strategy Operation
Basic Salary To attract, retain and reward Executive Directors of a suitable calibre. Basic salaries are reviewed annually by the independent Remuneration
Committee. Factors considered by the Committee include, intra alia, individual
seniority/length of service, market comparisons, economic climate, wider staff
reviews.
BIK and allowances A package of benefits (car allowance, private health cover, death in service Car allowances are paid to individuals via the PAYE system. Insurance cover is
cover, defined pension contribution) is provided as part of a market provided either through membership of Group Schemes or by payment of
competitive remuneration package. subscriptions on behalf of the individuals.
Element Purpose and link to strategy Operation
Performance Bonus To maximise the benefit of the arrangements for the Company, half of the The maximum potential bonus is set by the Remuneration Committee at the start
performance bonus is linked to the reported results of the Group and the other of each year. Individual performance, and thus bonus entitlement, is assessed
half is linked to the achievement of other strategic objectives. and determined by the Committee after the year end date.
Pension Defined contributions are made to individual's nominated pension providers as The Company pays defined pension contributions directly to the nominated
part of a market competitive remuneration package. providers.
7. TAXATION ON (LOSS)/PROFIT FROM ORDINARY ACTIVITIES
2023 2022
£'000 £'000
Corporation tax charge for current year - 297
Corporation tax adjustment in respect of previous year - 53
Deferred tax (credit)/charge (35) 200
Deferred tax credit in respect of previous period (138) (187)
Tax (credit)/charge for the year (173) 363
The tax assessed for the year differs from the standard rate of
corporation tax in the UK applied to profit before tax.
On 10 June 2021, The Finance Bill 2021 received Royal assent. The Bill
confirms the increase in the corporation tax rate from 1 April 2023. From this
date, the rate will tapper from 19% for businesses of less than £50,000 to
25% with profits of over £250,000. This does not amount to a significant
impact on the deferred tax charge for the year. The closing deferred tax
balance at 31 March 2023 has been calculated at 25% (2022: 25%) being the
substantively enacted tax rate at the balance sheet date.
2023 2022
£'000 £'000
Total (Loss)/Profit on ordinary activities before tax (1,568) 30,004
(Loss)/Profit on ordinary activities at the standard rate of corporation tax (298) 5,701
in the UK of 19% (2022: 19%)
Effects of:
Expenses not deductible for tax purposes 52 278
Other timing differences (231) (32)
Differences between capital allowances and depreciation 1 251
Adjustments to prior periods deferred tax (2,445) (988)
Adjustments to prior corporation tax - 53
Non-taxable income - (6,731)
Adjust closing deferred tax to average rate of tax (137) (495)
Deferred tax not recognised 2,885 2,326
Tax (credit)/charge for the year (173) 363
8. (LOSS)/EARNINGS PER SHARE
2023 2022
(Loss)/Earnings per share has been calculated using the following:
(Loss)/Earnings (£'000) (1,395) 29,641
Weighted average number of shares ('000s) 556,601 591,916
(Loss)/Earnings per ordinary share (0.25)p 5.01p
Weighted average number of shares and share options that were exercisable at - 81,616
year end ('000s)
Diluted Earnings per ordinary share (0.25)p 4.40p
Basic earnings per ordinary share has been calculated using the weighted
average number of share in issue during the relevant financial periods.
9. TANGIBLE FIXED ASSETS
*ROU Leasehold property Motor Vehicles Computer equipment Office fixtures, fittings, and equipment Total
£'000 £'000 £'000 £'000 £'000
Cost
Balance at 1 April 2021 1,176 - 340 613 2,129
Additions 872 33 329 121 1,355
Disposals (338) - (37) (107) (482)
Transfers - - 47 12 59
Balance at 31 March 2022 1,710 33 679 639 3,061
Additions 819 - 80 50 949
Disposals (353) - (113) (231) (697)
Transfers** - - (441) 441 -
Balance at 31 March 2023 2,176 33 205 899 3,313
Accumulated depreciation
Balance at 1 April 2022 575 - 114 403 1,092
Depreciation 442 5 87 172 706
Disposals (338) - (37) (153) (528)
Transfers - - 47 12 59
Balance at 31 March 2022 679 5 211 434 1,329
Depreciation 482 7 76 157 722
Disposals (364) - (113) (231) (708)
Transfers** - - (45) 45 -
Balance at 31 March 2023 797 12 129 404 1,342
Net Book Value
At 31 March 2023 1,379 21 76 495 1,971
At 31 March 2022 1,031 28 468 205 1,732
*Right of Use.
**Transfers have been made between categories to correct immaterial brought
forward discrepancies.
Included in Office fixtures, fittings and equipment are assets acquired under
lease agreements with a net book value of £20,350 (2022: £65,218).
Included in Computer equipment are assets acquired under lease agreements with
a net book value of £Nil (2022: £6,555).
Included in ROU Leasehold property are assets acquired under lease agreements
with a net book value of £1,380,387 (2022: £1,041,733).
Included in Motor Vehicles are assets acquired under lease agreements with a
net book value of £21,506 (2022: £28,105).
Depreciation charged on leased assets was £472,986 (2022: £486,998).
10. INTANGIBLE ASSETS
Client Lists Goodwill Arising on Consolidation Internally Developed Assets Total
£'000 £'000 £'000 £'000
Cost
Balance at 1 April 2021 9,185 14,751 2,481 26,417
Additions 2,593 - 332 2,925
Disposals - (1,916) - (1,916)
Balance at 31 March 2022 11,778 12,835 2,813 27,426
Additions 1,331 - 583 1,914
Disposals (100) - - (100)
Balance at 31 March 2023 13,009 12,835 3,396 29,240
Accumulated amortisation
Balance at 1 April 2021 7,242 235 1,238 8,715
Amortisation 380 - 22 402
Balance at 31 March 2022 7,622 235 1,260 9,117
Amortisation 522 - 41 563
Balance at 31 March 2023 8,144 235 1,301 9,680
Net Book Value
At 31 March 2023 4,865 12,600 2,095 19,560
At 31 March 2022 4,156 12,600 1,553 18,309
Client Lists relate to identifiable relationships between acquired companies,
their adviser network and the associated client bases.
Internally Developed Assets predominately represent costs associated with
various initiatives.
GOODWILL
The carrying value of goodwill in respect of each cash generating unit is as
follows:
31 March 2023 31 March 2022
£'000 £'000
Financial Advisory business 12,600 12,600
12,600 12,600
In assessing the carrying value of Goodwill the Directors have used 5-year
forecasts and discounted the anticipated future cashflows by entity over 5
years and then in perpetuity using a discount rate of 15%. In all scenarios,
the recoverable amount exceeded the carrying value.
11. INVESTMENTS IN ASSOCIATES
Investments in Associates
Investments in associates
£'000
Cost
Balance at 31 March 2022 -
Additions 10,035
Balance at 31 March 2023 10,035
Net Book Value
At 31 March 2023 10,035
At 31 March 2022 -
In April 2022 the Company received regulatory approval from the FCA and
completed the acquisition of a 21% stake in LEBC Holdings Limited ("LEBC").
Consideration of £10m has been agreed, with £6m on initial purchase and an
additional £4m due on the first anniversary.
12. TRADE AND OTHER RECEIVABLES
Current
31 March 31 March
2023 2022
£'000 £'000
Trade receivables 393 109
Other prepayments and accrued income 2,228 2,136
Other receivables 7,852 10,794
10,473 13,039
Included within other receivables is the sum of £49k (2022: £1.03m) being
the estimated amount recoverable from insurers in connection with the Neil
Bartlett provision detailed in Note 14. Included in other prepayments and
accrued income is accrued income at year end of £1,360,977 (2022:
£1,637,583).
Included within other receivables due within one year is the sum of
£4,056.333 (2022: £6,410,256) being the amount due within one year as part
of the consideration on the sale of Tavistock Wealth Limited. The remaining
consideration of £13.33m has been discounted at a rate of 4% to reflect the
time value of money.
Also, included within other receivables is the sum of £2.2m (2022: 2.2m)
being the estimated amount recoverable from insurers and £0.7m being the
estimated amount recoverable from advisers in connection with the British
Steel provision detailed in Note 14.
Non-current
31 March 31 March
2023 2022
£'000 £'000
Deferred consideration due 8,740 12,090
8,740 12,090
Included within deferred consideration due in more than one year is the sum of
£8,739,583 (2022: £12,090,350) being the amount due after one year as part
of the consideration on the sale of Tavistock Wealth Limited.
13. LIABILITIES
31 March 31 March
2023 2022
£'000 £'000
Current liabilities
Trade payables 1,754 1,730
Accruals 1,371 1,520
Commissions payable 907 919
VAT and social security liabilities 352 252
Other payables 619 310
Payments due regarding purchase of client lists 1,254 1,508
Deferred consideration owed 4,000 -
Leases 469 483
10,726 6,722
31 March 31 March
2023 2022
£'000 £'000
Non-current liabilities
Payments due regarding purchase of client lists 923 1,298
Leases 999 732
1,922 2,030
14. PROVISIONS
Total
£'000
Balance at 1 April 2022 7,955
Additions 388
Payments to settle claims (150)
Provisions utilised (2,189)
Balance at 31 March 2023 6,004
There are three main provisions at the year-end date: the Bartlett provision,
the Restructuring Reserve provisions and the British Steel provision.
Bartlett provision
In December 2018, Mr Neil Bartlett one of the Group's former advisers was
found guilty of fraud and was sentenced to eight years imprisonment. As a
consequence of his actions, the subsidiary company within the Group with which
he was previously associated has been approached by a number of victims, the
majority of whom were previously unknown to the company, seeking to recover
monies stolen from them by Mr Bartlett.
All steps are being taken by the Group to refute these approaches and to
address them individually in an appropriate manner. Having consulted with the
Company's legal advisers, the Directors consider it appropriate that a
provision of £132k is made at the year-end date (2022: £1.45m). This
provision is matched in part by the provision referred to in Note 12, entitled
Trade and Other Receivables. The unmatched element of the provision has been
made in response to the actions of the FOS, as referred to in the Chairman's
Statement.
Restructuring Provisions
The restructuring provisions are made up of three principal components.
Firstly, a provision of £113,673 to cover additional costs associated with
the disposal of offices no longer being used by the Company.
Secondly, a provision of £120,698 to cover anticipated costs associated with
management restructure costs.
The third and largest provision relates to new costs arising as a consequence
of past restructuring. A provision of £1.6 million has been made to cover
additional payments anticipated to arise over a number of future years to meet
potential claims arising from advice given by appointed representative firms
whilst they operated under the Company's regulatory umbrella, prior to being
exited from the Group.
The first layer of claims protection is provided by the Company's captive
insurance cell. The captive cell provides up to a maximum of £750k of
protection in each financial year. Claims protection above this level is
purchased from the traditional insurance market. The Company is responsible
for meeting all costs associated with the operation of the captive cell. Thus,
if the claims covered by the above provision were to arise over a number of
financial years, and in each year were to amount to £750k or less, the
Company would be responsible for providing the captive cell with the funds
required to meet such claims.
British Steel Provision
A precautionary provision of £3.8 million (gross) has been made in compliance
with the FCA guidelines that were issued in anticipation of a mandatory,
industry-wide, review of past British Steel Pension Fund transfer cases.
This provision is matched in part by the provision referred to in Note 12,
entitled Trade and Other Receivables. The unmatched element of £930k has been
charged to the Statement of Comprehensive Income as an exceptional cost in the
prior year.
Further information regarding the provisions can be found in the Chairmans
Statement on page 4.
15. DEFERRED TAX
Total
£'000
Balance at 1 April 2022 (262)
Adjustment in respect of previous period 138
Deferred tax credit in the year 35
Balance at 31 March 2023 (89)
The Directors anticipate that the Deferred tax asset relating to losses
brought forward will be realised within the medium term.
The deferred tax provision comprises:
31 March 31 March
2023 2022
£'000 £'000
Deferred tax on intangibles (89) (262)
(89) (262)
For taxation purposes, the parent company of the Group, Tavistock Investments
Plc, has to date incurred losses amounting to £10.75m (31 March 2022
£9.28m), no deferred tax asset in connection with these losses has been
recognised in the accounts.
16. FINANCIAL RISK MANAGEMENT
The Group is exposed to risks that arise from its use of financial
instruments. These financial instruments are within the current assets and
current liabilities shown on the face of the statement of financial position
and comprise the following:
Credit risk
The Group is exposed to the usual credit risks associated with use of a
mainstream bank headquartered in the UK, NatWest Plc. However, the Board does
not consider it to be necessary to carry a specific provision against this
risk.
The Group is exposed to a credit risk associated with the deferred
consideration due on the disposal of Tavistock Wealth to Titan. However, the
Board does not consider it necessary to carry a specific provision against
this risk as Ares, one of the largest debt providers to the UK financial
services sector, is a Titan shareholder and is its principle financial backer.
The Group is exposed to a low level of credit risk primarily on its trade
receivables, which are spread over a range of Investment platforms and
advisers. Receivables are broken down as follows:
31 March 31 March
2023 2022
Deferred consideration due, accrued income and receivables £'000 £'000
Trade receivables 393 109
Accrued income 1,361 1,638
Other receivables 16,591 22,885
The table below illustrates the due date of trade receivables:
31 March 31 March
2023 2022
£'000 £'000
Current 195 18
31-60 days 174 36
61-90 days 3 5
91-120 days - 2
121 and over 21 48
393 109
Liquidity risk
Liquidity risk rises from the Group's management of working capital and the
finance charges and repayments of its liabilities.
The Group's policy is to ensure that it will have sufficient cash to allow it
to meet its liabilities when they become due.
The Group has no bank borrowing or overdraft facilities.
The Group's policy in respect of cash and cash equivalents is to limit its
exposure by reducing cash holding in the operating units and investing amounts
that are not immediately required in funds that have low risk and are placed
with a reputable bank.
Cash at bank and cash equivalents
At the year end the Group had the following cash balances: 31 March 31 March
2023 2022
£'000 £'000
9,733 15,274
Cash at bank comprises Sterling cash deposits held within a number of banks.
There is no cash held on deposit in special interest bearing accounts.
All monetary assets and liabilities within the Group are denominated in the
functional currency of the operating unit in which they are held. All amounts
stated at carrying value equate to fair value.
31 March 2023 Due within 1 year Due within 1-5 years
£'000 £'000 £'000
Financial liabilities at amortised cost
Trade payables 1,754 1,754 -
Accruals 1,371 1,371 -
Commissions payable 907 907 -
VAT and social security liabilities 352 352 -
Other payables 619 619 -
Payments due regarding purchase of client lists 2,177 1,254 923
Leases 1,467 468 999
8,647 6,725 1,922
31 March 2022 Due within 1 year Due within 1-5 years
£'000 £'000 £'000
Financial liabilities at amortised cost
Trade payables 1,730 1,730 -
Accruals 1,520 1,520 -
Commissions payable 919 919 -
VAT and social security liabilities 252 252 -
Other payables 310 310 -
Payments due regarding purchase of client lists 2,806 2,479 327
Leases 1,215 724 491
8,752 7,934 818
Capital Disclosures and Risk Management
The Group's management define capital as the Group's equity share capital and
reserves.
The Group has a requirement to maintain a minimal level of regulatory capital,
which in practice means the FCA requires the Group's core tier one capital,
which is composed primarily of retained earnings and shares, to exceed the
requirements as set out by the FCA. Compliance with minimum regulatory capital
is assessed internally monthly and reported to the FCA on a half yearly basis.
Should additional capital be required management ensure that this is
introduced in a timely manner.
The Group's objective when maintaining capital is to safeguard its ability to
continue as a going concern, so that in due course it can provide returns for
shareholders and benefits for other stakeholders.
The Group manages its capital structure and makes adjustments to it in the
light of changes in the business and in economic conditions. In order to
maintain or adjust the capital structure, the Group may from time to time
issue new shares, based on working capital and product development
requirements and current and future expectations of the Company's share price.
The Group monitors both its operating and overall working capital with
reference to key ratios such as gearing and regulatory capital requirements.
Interest rate risk
Interest rate risk is the risk that the value of financial instruments will
fluctuate due to changes in market interest rates. The Group considers the
interest rates available when deciding where to place cash balances. The Group
has no material exposure to interest rate risk.
17. SHARE CAPITAL AND SHARE PREMIUM
31 March 2023 31 March 2022
£'000 £'000
Called up share capital
Allotted, called up and fully paid
556,857,576 Ordinary shares of 1 pence each 5,567 5,578
(2022: 557,677,576 shares of 1 pence each)
Capital Redemption Reserve 501
534
6,101 6,079
Share Premium 1,541
1,614
7,715 7,620
Capital Redemption Reserve
In August 2022, in accordance with a mandate given by shareholders, the Board
arranged the buy-back of 3,000,000 of the Company's ordinary shares of 1p
each, representing 0.54% of the then issued share capital, at a price of 9.35
pence per share. Later in the financial year, in November 2022, the Board
arranged the buy-back of a further 300,000 of the Company's ordinary shares of
1p each, representing 0.05% of the then issued share capital, at a price of 7
pence per share. These shares were subsequently cancelled, and the nominal
value of the shares has been transferred to the Capital Redemption Reserve.
The following describes the nature and purpose of each of the Company's
reserves:
Reserve Description and purpose
Share Capital Amount subscribed for share capital at nominal value.
Share Premium Amount subscribed for share capital in excess of nominal value.
Retained Earnings Cumulative net gains and losses recognised in the consolidated statement of
comprehensive income.
Capital Redemption Reserve A statutory, non-distributable reserve
(https://uk.practicallaw.thomsonreuters.com/3-107-6889?originationContext=document&transitionType=DocumentItem&contextData=(sc.Default)&ppcid=5529b4e8cc5542f7bb359aa77618de12)
into which amounts are transferred following the purchase, and cancellation
of the company's own shares out of distributable profits.
18. SHARE BASED PAYMENTS
During the year the Company issued options 8,100,000 (2022: 76,950,000)
Ordinary shares.
All options outstanding at the year-end date have been valued using the
Black-Scholes pricing model. The weighted average of the assumptions used in
the model are:
31 March 31 March
2023 2022
Share price at grant 6.72p 4.76p
Exercise price 7.67p 5.24p
Expected volatility 117% 59%
Expected life 3.8 years 3.6 years
Risk free rate 3.4% 0.7%
Expected volatility has been determined by reference to the fluctuations in
the Company's share price between the
formation of its current Group structure and the grant date of the share
options.
31 March 2023 31 March 2022
Weighted average price (pence) Number Weighted average price (pence) Number
Outstanding at the beginning of the year 1.45 124,405,967 0.76 51,520,983
Granted during the year 6.22 8,100,000 1.87 76,950,000
Exercised during the year 2.50 (2,480,000) - -
Lapsed during the year 0.24 (8,901,400) 0.47 (4,065,016)
Outstanding at the end of the year 1.85 121,124,567 1.45 124,405,967
The average exercise price of the 81,445,067 options that had vested and were
exercisable at year end was 5.25p and their weighted contractual life was 4
years.
The weighted average fair value of each option granted during the current
period was assessed as being 6.22p and their weighted average contractual life
was 10 years.
The range in exercise prices of share options outstanding at the end of the
year is 2.35p to 7.75p (2022: 2.35p to 7.25p) and their weighted average
contractual life was 3.8 years (2022: 3.6 years)
The vesting conditions in relation to management are disclosed in the
Remuneration Report on pages 22.
19. LEASING COMMITMENTS
The Group's future minimum lease payments fall due as follows:
31 March 31 March
2023 2022
£'000 £'000
Not later than 1 year 468 465
Later than 1 year and not later than 5 years 999 784
1,467 1,249
Included in the above is £452k of Right of Use leasing commitments due within
1 year, and £982k due later than 1 year and not later than 5 years.
The interest expense in relation to Right of Use leasing commitments due
within 1 year is £38k, and £34 due later than 1 year and not later than 5
years.
20. RELATED PARTY TRANSACTIONS
During the year ended 2022 the former subsidiary Tavistock Wealth Limited
received fees of £1,549,955 under the terms of an agreement entered into with
Investment Fund Services Limited ("IFSL"). IFSL is a company of which Andrew
Staley, a significant shareholder in Tavistock Investments Plc, is a Director.
21. POST BALANCE SHEET EVENTS
In April 2023, the Company acquired the business of Precise Protect Limited, a
profitable and fast-growing protection business based in Bangor, Northern
Ireland. This business is expected to contribute significantly to the
Company's growth in the next financial year. The company has a network of over
200 advisers working with more than 37,000 UK clients. In the year ended 31
October 2022, Precise Protect reported a profit before taxation of £1.45
million on turnover of £6.5 million and net assets of £1.23 million.
TAVISTOCK INVESTMENTS PLC
Company number 05066489
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
At 31 March 2023 At 31 March 2022
ASSETS Note £'000 £'000 £'000 £'000
Non-current assets
Investments V 27,249 16,008
Tangible fixed assets VI 1,586 1,355
Intangible assets VII 555 74
Trade and other receivables VIII 8,740 12,090
Total non-current assets 38,130 29,527
Current assets
Trade and other receivables VIII 10,875 14,943
Cash and cash equivalents IX 3,038 7,884
Total current assets 13,913 22,827
Total assets 52,043 52,354
LIABILITIES
Current liabilities X (17,458) (10,096)
Non-current liabilities
Creditors: amounts falling due after more than one year XI (885) (626)
Total liabilities (18,343) (10,722)
Total net assets 33,700 41,632
Capital and reserves
Share Capital XII 5,567 5,578
Share Premium 1,614 1,541
Capital Redemption Reserve 534 501
Retained Earnings 25,985 34,012
Total equity 33,700 41,632
These accounts do not include a Cashflow Statement, or a Financial Instruments
note, as permitted by Section 1.8 of FRS 101.
The loss of the parent company for the year was £7,442,147 (2022: profit
£36,410,000).
The financial statements were approved by the Board and authorised for
issue on 19 September 2023.
Oliver Cooke
Chairman
The notes below form part of the Company financial statements.
TAVISTOCK INVESTMENTS
PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
Share Capital Share Premium Capital Retained Total
Redemption Earnings Equity
Reserve
£'000 £'000 £'000 £'000 £'000
At 31 March 2021 6,079 1,541 - (497) 7,123
Buy-back of shares (501) - 501 (2,607) (2,607)
Equity settled share based payments - - - 1,010 1,010
Dividend payment - - - (304) (304)
Profit after tax - - - 36,410 36,410
At 31 March 2022 5,578 1,541 501 34,012 41,632
Buy-back of shares (33) 73 33 (303) (230)
Equity settled share based payments - - - 107 107
Share options exercised 22 - - - 22
Dividend payment - - - (391) (391)
Dividend received - - - 373 373
Loss after tax - - - (7,813) (7,813)
At 31 March 2023 5,567 1,614 534 25,985 33,700
The notes below form part of the Company Financial Statements.
TAVISTOCK INVESTMENTS PLC
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
I. ACCOUNTING POLICIES
The principal accounting policies applied are summarised below.
Basis of preparation
The financial statements have been prepared under the historical cost
convention and in accordance with Financial Reporting Standard 101 Reduced
Disclosure Framework, the Financial Reporting Standard applicable in the
United Kingdom and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 101 Reduced
Disclosure Framework requires the use of certain critical accounting
estimates. It also requires management to exercise judgement in applying the
Company's accounting policies (see Note 2 in the Group financial statements).
Advantage has been taken by the Company of the exemptions provided by Section
5(c) of FRS101 not to disclose Group transactions in respect of wholly owned
subsidiaries.
All accounting policies that are not unique to the Company are listed on pages
33 to 36. All additional accounting policies have been applied as follows:
Going concern
The Directors are of the opinion that the Company has sufficient working capital for the foreseeable future, being at least twelve months from the date of approval of financial statements. On this basis, they consider it appropriate that the accounts have been prepared on a going concern basis.
Valuation of investments
Investments held as fixed assets are stated at cost less any provision for
impairment in value.
II. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Impairment of Investments
The Company is required to test, when impairment indicators exist, whether the
carrying value of its investment in its subsidiaries has suffered any
impairment.
In assessing the carrying value of Investments the Directors have used 5-year
forecasts and discounted the anticipated future cashflows by entity over 5
years and then in perpetuity using a discount rate of 15%. In all scenarios,
the recoverable amount exceeded the carrying value.
Share based payments
The share based payment charge to the Profit or Loss account has been
estimated using the Black-Scholes Model in respect of share options granted by
the Company, as referred to in more detail in Note 18.
III. LOSS FOR THE FINANCIAL PERIOD
The Company has taken advantage of the exemption allowed under s408 of the
Companies Act 2006 and has not presented its own profit and loss account in
these financial statements. The Company's loss for the year was £7,442,147
(2022: profit £36,410,000).
Included within this loss are provisions totalling of £Nil (2022:
£3,050,000) to cover the anticipated one-off costs relating to planned Group
restructuring, and new costs incurred as a consequence of past restructuring,
as described in the Strategic report on pages 7 to 9.
In July 2022, the Company disbursed an interim dividend of 0.07p per share,
representing a notable 40% increase compared to the dividend issued in October
2021. The Company is issuing a subsequent interim dividend of the same value,
0.07p.
All Group staff are employed by Tavistock Investments Plc and their costs are
recharged to the relevant subsidiaries. Details of the Company's staff costs
are shown in Note IV.
IV. STAFF COSTS
2023 2022
£'000 £'000
Staff costs for all employees, including Directors consist of: 2,348 1,732
Wages, fees and salaries 289 176
Social security costs 163 66
Pensions 2,800 1,974
The average number of employees of the Company during the year was as follows: 2023 2022
Number Number
Directors and key management 7 4
Operations and administration 31 16
38 20
During the year the Company incurred an additional £8.6 million (2022: £8.31
million) of staff costs relating to 161 employees (2022: 144 employees) which
were recharged to subsidiary companies within the Group.
V. INVESTMENTS
31 March 31 March
2023 2022
£'000 £'000
Subsidiary and associate undertakings
Cost
Balance at 1 April 2022 20,667 23,292
Additions 14,485 350
Release on disposal (3,025) (2,975)
Balance at 31 March 2023 31,127 20,667
Provisions for impairment
Balance at 1 April 2022 4,659 5,309
Impairment charge - (650)
Minority interest in associate 219 -
Balance at 31 March 2023 4,878 4,659
Carrying value of investments 27,249 16,008
At the year end the Company had the following wholly owned subsidiaries:
Registered Office Address Name Holding
1 Queens Square, Lyndhurst Road, Ascot, Berkshire, SL5 9FE Tavistock Private Client Limited Indirect
Tavistock Partners Limited Direct
Tavistock Partners (UK) Ltd Direct
The Tavistock Partnership Limited Direct
Tavistock Estate Planning Services Limited Direct
Tavistock Chater Allan LLP Indirect
King Financial Planning LLP* Direct
Tavistock Asset Management Limited Direct
Tavistock Holdings Limited Direct
Tavistock Services Limited Direct
Asset Lab Limited ** Direct
Tavistock Select LLP** Indirect
Duchy Independent Financial Advisers Limited** Direct
Cornerstone Asset Holdings Limited** Direct
* The Company owns 100% of King Financial Planning LLP and the
other member is entitled to 50% of the profit share.
** Dormant subsidiary during the year that is exempt from preparing
individual accounts by virtue of s394A of Companies Act 2006
VI. TANGIBLE FIXED ASSETS
*ROU Leasehold property Computer Equipment Office fixtures, fittings and equipment Total
£'000 £'000 £'000 £'000
Cost
Balance at 1 April 2022 1,391 404 534 2,329
Additions 757 16 25 798
Disposals (280) (99) (116) (495)
Balance at 31 March 2023 1,868 321 443 2,632
Accumulated depreciation
Balance at 1 April 2022 531 116 327 974
Depreciation charge 399 28 140 567
Disposals (280) (99) (116) (495)
Balance at 31 March 2023 650 45 351 1,046
Net book value
At 31 March 2023 1,218 276 92 1,586
At 31 March 2022 860 288 207 1,355
*Right of use
Included in ROU Leasehold property are assets acquired under lease agreements
with a net book value of £1,129,689 (2022: £861,000).
Included in Computer equipment are assets acquired under lease agreements with
a net book value of Nil (2022: £7,000).
Included in Office fixtures, fittings and equipment are assets acquired under
lease agreements with a net book value of £20,350 (2022: £65,000).
VII. INTANGIBLE ASSETS
Total
£'000
Software cost
Balance at 1 April 2022 75
Additions 497
Balance at 31 March 2023 572
Accumulated amortisation
Balance at 1 April 2022 1
Amortisation charge 16
Balance at 31 March 2023 17
Net book value
At 31 March 2023 555
At 31 March 2022 74
VIII. TRADE AND OTHER RECEIVABLES
Current 31 March 31 March
2023 2022
£'000 £'000
Trade debtors 32 23
Prepayments and accrued income 237 323
Deferred consideration due 7,159 9,586
Amounts owed by subsidiary undertakings 3,447 5,011
10,875 14,943
Non-current
31 March 31 March
2023 2022
£'000 £'000
Deferred consideration due 8,740 12,090
8,740 12,090
IX. CASH AND CASH EQUIVALENTS
31 March 31 March
2023 2022
£'000 £'000
Cash at bank and in hand 3,038 7,884
3,038 7,884
X. CREDITORS: amounts falling due within one year
31 March 31 March
2023 2022
£'000 £'000
Trade creditors 306 434
Accruals 460 768
Other tax and social security 353 252
Leases 386 381
Provision 5,638 6,664
Deferred consideration owed 4,000 -
Amounts owed to subsidiary undertakings 6,315 1,597
17,458 10,096
XI. CREDITORS: amounts falling due after one year
31 March 31 March
2023 2022
£'000 £'000
Leases 885 626
884 626
XII. SHARE CAPITAL
Details of the Company's share capital and the movements in the year can be
found in Note 17 to the Consolidated Financial Statements.
XIII. SHARE OPTIONS
EMI Share Option Scheme
Details of the share options outstanding at 31 March 2023 can be found in Note
18 in the Consolidated Financial Statements.
TAVISTOCK INVESTMENTS PLC
ADVISERS
Registrars Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7XX
Nominated Adviser Allenby Capital
& Broker 5 St Helen's Place
London
EC3A 6AB
Independent Auditors RPG Crouch Chapman LLP
5(th) Floor, 14-16 Dowgate Hill
London
EC4R 2SU
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END ACSNKCBBDBKBNCDRecent news on Tavistock Investments
See all newsREG - Tavistock Investment - Director/PDMR Shareholding
AnnouncementREG - Tavistock Investment - Director/PDMR Shareholding
AnnouncementREG - Tavistock Investment - Interim Results
AnnouncementREG - Tavistock Investment - Result of AGM
AnnouncementREG - Tavistock Investment - Notice of AGM
Announcement