REG - Tavistock Investment - Interim Results
06/12/2021 07:00
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RNS Number : 5810U Tavistock Investments PLC 06 December 2021
Tavistock Investments Plc
("Tavistock", "The Group" or the "Company")
Interim
accounts
6 December 2021
Tavistock (AIM:TAVI) is pleased to announce its unaudited financial results
for the six months ended 30 September 2021.
The Company also announces that copies of the interim results will be posted
to shareholders today. A copy of the interims together with an accompanying
letter from the Chairman will shortly be made available on the Company's
website (https://tavistockinvestments.com/ (https://tavistockinvestments.com/)
).
Financial highlights
Group
· Net assets of £49.8 million (31 March 2021: £15.0 million)
· Initial £20.0 million of consideration from sale of Tavistock
Wealth Limited ("TWL") to Titan Wealth Holdings Limited ("Titan") received in
August 2021
o Proceeds have enabled the Company to:
§ Repay all its outstanding borrowings of £3.53 million
§ Buy back and cancel 4.7% of the Company's issued share capital - enhancing
earnings per share and intrinsic value of shares remaining in issue
§ Pay an interim dividend of 0.05p per share, five times higher than maiden
dividend (2019: 0.01p per share)
§ Increase the net asset value per share to 8.6p (31 March 2021: 3p)
· Revenues up 27% at £17.0 million (H1 2020: £13.4 million)
· Adjusted EBITDA 13% lower at £1.1 million (H1 2020: £1.3
million) due to the one-off impact of staff salary sacrifice and government
furlough support during H1 2020 and disposal of TWL in August 2021
· Profit before tax at £35.5 million (H1 2020: £416k loss),
including present day value of the profit arising from the disposal of TWL to
Titan
Advisory business
· 37% increase in revenues to £14.7 million (H1 2020: £10.7
million)
o Advisory revenues anticipated to exceed total Group revenues for the full
financial year 2020
· Contribution to Group adjusted EBITDA up 56% to £1.5 million (H1
2020: £0.96 million)
· Continued recognition of best -in-class client service with
Tavistock Private Client Limited acknowledged as Best Financial Planning and
Wealth Management Firm in England at SME News' Finance Awards 2021
Investment Management business
· 13% reduction in revenues to £2.4 million (H1 2020: £2.7
million) and 6% reduction in EBITDA to £1.6 million (H1 2020: £1.7 million)
due to the Group benefitting from only five months' contribution from the
investment management business prior to completion of the sale to Titan
Brian Raven, Tavistock's Chief Executive, said: "The strategic partnership
with Titan and sale of TWL has transformed the shape of the business and its
prospects. It has enabled the delivery of immediate enhancement in value to
shareholders while providing the Company with the firepower to accelerate the
growth of the business through acquisitions, with some exciting prospective
targets already being considered.
"In addition, our advisory business continues to perform strongly and is
already on track to deliver revenues ahead of the entire Group revenues in the
prior year. We are in a strong position to continue developing a much larger
and more profitable distribution and wealth management group, to deliver
enhanced value to shareholders."
For further information
Tavistock Investments Plc Tel: 01753 867000
Oliver Cooke
Brian Raven
Allenby Capital Limited Tel: 020 3328 5656
(Nominated adviser and broker)
Corporate Finance:
Nick Naylor, Nick Athanas, Liz Kirchner
Sales and Corporate Broking:
Tony Quirke
Powerscourt Tel: 07711 380 007
Gilly Lock 020 7250 1446
Chloe Retief
TAVISTOCK INVESTMENTS PLC
CHAIRMAN'S STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021
In the period under review the Board successfully concluded a fundamental
transformation of the Company's standing and prospects.
This was achieved by entering into a ten-year strategic partnership with Titan
Wealth Holdings Limited ("Titan"). As a part of the partnership arrangements,
Titan acquired the Group's investment management business, Tavistock Wealth
Limited ("TWL"), for a consideration of up to £40 million, in cash, together
with a ten-year revenue sharing earn out. The cash element of the transaction
alone was equivalent to more than 2.5 times the Company's market
capitalisation immediately prior to the announcement of the deal.
The initial £20 million of the consideration was received at the end of
August 2021, when the transaction was formally completed. The balance of the
consideration of up to a further £20 million is payable in cash in annual
instalments over the next three years, linked to the maintenance of TWL's
revenues.
This transaction has enabled the Company to:
· repay £3.53 million to its bankers, NatWest, in full
satisfaction of all outstanding borrowings;
· buy back and cancel 4.7% of the Company's issued share capital,
thereby enhancing the earnings per share and thus the intrinsic value of all
the shares remaining in issue;
· pay an interim dividend to shareholders five times higher than
the maiden dividend paid to them in 2019; and
· increase the net asset value per share from under 3p at the end
of March 2021 to over 8p at 30 September 2021.
The Company is now well positioned to increase the scale of its business
through both continued organic growth and an accelerated acquisition programme
without significant further dilution for shareholders.
Several potential acquisitions are currently being considered by the board.
Financial performance during the period
Revenues from financial advisory support have grown strongly in the period, up
37% on the same period last year to £14.7 million (2020: £10.7 million). It
is anticipated that revenues from this area for the full financial year will
exceed the total revenues reported by the Group in the last financial year.
The contribution to the Group's adjusted EBITDA from this area has also grown
strongly in the period, up 56% on the same period last year to £1.5 million
(2020: £0.96 mill). Adjusted EBITDA is considered by the board to be the most
appropriate measure of the Group's performance because it removes the
distorting effect of one-off gains and losses from acquisitions, as well as
the impact of non-cash items.
The dedicated manner in which the Group's advisers look after the interests of
their clients is continuing to gain recognition within the financial services
industry. One of the Group's advisory businesses, Tavistock Private Client
Limited, has recently been acknowledged as the Best Financial Planning and
Wealth Management Firm in England at the SME News' Finance Awards 2021.
Revenues from the Group's investment management business were 13% down on last
year at £2.4 million (2020: £2.7 million) and the contribution to the
Group's adjusted EBITDA was down 6% on last year to £1.6 million (2020: £1.7
million). This was because the Group only benefitted from five month's
contribution from its investment management business (prior to completion of
the sale to Titan) during the period under review, compared to a full six
months' contribution during the same period last year.
The Group's revenues, at £17 million, were 27% higher than in the same period
last year (2020: £13.4 million) and its adjusted EBITDA for the period, at
£1.1 million, was 13% lower than the same period last year (2020: £1.3
million). However, it should be noted that in the comparable period last year
the Group benefited from approximately £400k of staff salary sacrifice and
government furlough support, as well as a further £460k of revenue from its
investment management business. Thus, on a like for like basis the Group's
performance continues to improve.
The reported profit before tax, after providing for the Group reorganisation
project, depreciation and amortisation and share based payments, was £35.5
million (6 months to September 2020: £416k loss). This result includes the
present-day value of the profit arising from the disposal of TWL to Titan.
At 30 September 2021, the Company had net assets of £49.8 million (31 March
2021: £15 million), which was equivalent in value to approximately 8.6 pence
per share based on the number of shares then in issue. This figure included
cash resources of £17.2 million (31 March 2020: £4.5 million) after further
purchases of client books, repayment of all bank debt, the payment of the
interim dividend to shareholders and the buy-back and cancellation of 4.7% of
the Company's issued share capital.
The Group's results can be summarised as follows:
6 Months ended 6 Months ended Change on last year's equivalent period
30 Sept '21 30 Sept '20
£'000s £'000s
Gross revenues 17,043 13,380 27% increase
Reported adjusted EBITDA 1,095 1,260 13% decrease
Depreciation & Amortisation (467) (326) 43% increase
One off costs of restructuring programme (500) (1,200) 58% decrease
Share based payments (269) (13)
Reported (Loss) from operations before disposal of TWL (141) (279) 49% decrease
Profit on disposal of TWL 35,786 - -
Profit/(Loss) from operations 35,645 (279) -
Profit/(Loss) per share 5.85p (0.07p) -
Net assets 49,817 14,988 215% increase
Including cash and cash equivalents 17,171 3,974 332% increase
Post Balance Sheet events
The Board received confirmation that the disposal of TWL to Titan qualifies
for Substantial Shareholding Exemption ("SSE"). As a consequence, no tax
charge will be incurred on receipt of the consideration of up to £40 million
in cash. This is clearly of significant benefit to the Company as in the
absence of the SSE, the transaction might have given rise to a tax charge of
approximately £7 million.
Future prospects
The Board's focus is on the continued increase in shareholder value. It
intends to accomplish this by delivering a growing dividend stream, completing
further share buy-backs and building a much larger and more profitable
business.
I look forward to updating shareholders in due course.
Oliver Cooke
Chairman
6 (th) December 2021
TAVISTOCK INVESTMENTS PLC
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021
Unaudited Unaudited
6 months ended 6 months ended
30 September 30 September
2021 2020
Note £'000 £'000
Revenue 2 17,043 13,380
Cost of sales (10,455) (7,660)
------------ ------------
Gross profit 6,588 5,720
Administrative expenses 2 (6,729) (5,999)
-------------- --------------
Loss from operations before disposal (141) (279)
Present value of profit on disposal of Tavistock Wealth 4 35,786 -
-------------- --------------
Profit/(Loss) from operations 35,645 (279)
Memorandum:
Adjusted EBITDA 1,095 1,260
Depreciation & amortisation (467) (326)
One off costs of restructuring programme (500) (1,200)
Share Based Payments (269) (13)
-------------- --------------
Profit/(Loss) from operations before disposal (141) (279)
Finance costs (115) (115)
Profit share due to fellow member of LLP (48) (22)
------------ ------------
Profit/(Loss) before taxation and attributable to equity holders of the parent 35,482 (416)
Taxation - -
------------ ------------
Profit/(Loss) after taxation and attributable to equity holders of the parent 35,482 (416)
and total comprehensive income for the period
====== ======
Profit/(Loss) per share
Basic and Diluted 3 5.85p (0.07)p
====== ======
TAVISTOCK INVESTMENTS
PLC
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2021
Unaudited Audited
30 September 2021 31 March 2021
£'000 £'000 £'000 £'000
ASSETS
Non-current assets
Tangible fixed assets 1,553 1,037
Intangible assets 5 16,499 17,703
----------------- -----------------
Total non-current assets 18,052 18,740
Current assets
Trade and other receivables 4 22,580 3,286
Cash and cash equivalents 17,171 4,457
----------------- -----------------
Total current assets 39,751 7,743
----------------- -----------------
Total assets 57,083 26,483
LIABILITIES
Current liabilities (5,748) (5,445)
Non-current liabilities
Loan & Lease liability (655) (3,297)
Payments due regarding purchase of client lists (523) (928)
Provisions (812) (831)
Deferred taxation (249) (249)
------------------ ------------------
Total liabilities (7,987) (10,750)
------------------ ------------------
Total net assets 49,817 15,733
========= =========
Capital and reserves attributable to owners
of the parent
Share capital 6 5,792 6,079
Capital Repayment Reserve 287 -
Share premium 1,541 1,541
Retained earnings 42,197 8,113
------------------ ------------------
Total equity 49,817 15,733
========= =========
TAVISTOCK INVESTMENTS PLC
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021
Share capital Share premium Capital repayment reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000
31 March 2020 13,426 6,001 - (4,023) 15,404
Loss after tax and total comprehensive income - - - (429) (429)
Equity settled share-based payments - - - 13 13
Dividend payment - - - - -
------------- -------------- ------------- --------------- --------------
30 September 2020 13,426 6,001 - (4,439) 14,988
-------------- -------------- ------------- -------------- --------------
Bfwd reserves of previously unconsolidated subsidiary - - - (181) (181)
Capital reduction (7,347) (4,460) - 11,807 -
Profit after tax, adjustments and total comprehensive income - - - 1,221 1,221
Equity settled share-based payments - - - (295) (295)
-------------- -------------- -------------- -------------- --------------
31 March 2021 6,079 1,541 - 8,113 15,733
-------------- -------------- ------------- -------------- --------------
Profit after tax and total comprehensive income - - - 35,482 35,482
(287) - 287 (1,365) (1,365)
Buy back of shares
Dividend payment - - - (302) (302)
Equity settled share-based payments - - - 269 269
-------------- -------------- -------------- -------------- --------------
30 September 2021 5,792 1,541 287 42,197 49,817
-------------- -------------- -------------- -------------- --------------
TAVISTOCK INVESTMENTS PLC
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021
Unaudited Unaudited
6 months ended 6 months ended 30 September 2020
30 September 2021
£'000 £'000 £'000 £'000
Cash flows from operating activities
Loss before tax excluding gain on sale of Tavistock Wealth (304) (416)
Adjustments for:
Share based payments 269 13
Depreciation on fixed assets 337 233
Amortisation of intangible assets 130 93
Provisions for one-off reorganisation costs 500 1,200
Net finance costs 115 115
----------------- -----------------
Cash flows from operating activities before changes 1,047 1,238
in working capital
Increase in trade and other receivables (19,235) (2,328)
Increase in trade and other payables 961 2,380
----------------- -----------------
Cash generated in operations 17,229 1,290
Investing activities
Present value of profit on disposal of Tavistock Wealth 35,786 -
Purchase of tangible fixed assets (870) (762)
Intangible assets - client lists and internally developed assets (837) (101)
Deferred consideration payments (1,082) (687)
----------------- -----------------
Net cash used from investing activities 32,997 (1,550)
Financing activities
Finance costs (115) (115)
New loans - 2,130
Leases 306 (135)
Loan repayments (3,590) (62)
Buy back of shares (1,365) -
Disposal of TWL Goodwill 2,010 -
Dividend payment (302) -
----------------- -----------------
Net cash used for financing activities (3,056) 1,818
----------------- -----------------
Net increase in cash and cash equivalents 12,714 1,558
Cash and cash equivalents at beginning of the period 4,457 2,416
------------------ ------------------
Cash and cash equivalents at end of the period 17,171 3,974
========= =========
TAVISTOCK INVESTMENTS PLC
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021
1. ACCOUNTING POLICIES
Basis of preparation
The interim condensed consolidated financial statements have been prepared in
accordance with the recognition and measurement requirements of International
Financial Reporting Standards (IFRS) and IFRIC interpretations issued by the
International Accounting Standards Board (IASB) adopted by the UK.
The accounts have been prepared in accordance with accounting policies that
are consistent with the March 2021 Report and Accounts and that are expected
to be applied in the Report and Accounts of the year ending 31 March 2022.
The financial information does not constitute statutory accounts within the
meaning of section 435 of the Companies Act 2006. Statutory accounts for
Tavistock Investments Plc for the year ended 31 March 2021 have been delivered
to the Registrar of Companies. The auditors' report on those accounts was
unqualified, did not draw attention to any matters by way of emphasis and did
not contain a statement under Section 498 (2) or (3) of the Companies Act
2006.
2. SEGMENTAL INFORMATION
A segmental analysis of revenue and expenditure for the period is:
Investment Management Advisory Group Unaudited 30 September 2021 Unaudited 30 September 2020
Support (Plc)
£'000 £'000 £'000 £'000 £'000
Revenue 2,378 14,652 13 17,043 13,380
Cost of Sales (226) (10,229) - (10,455) (7,660)
Administrative Expenses (728) (3,713) (1,520) (5,961) (4,799)
Group - - (768) (768) (1,200)
------------- -------------
Loss from operations before disposal (141) (279)
====== ======
The segmental analysis above reflects the parameters applied by the Board when
considering the Group's monthly management accounts. The Directors do not
consider a division of the statement of financial position to be appropriate
or useful for the purposes of understanding the financial performance and
position of the Group.
During the period under review the Group operated and earned revenue
exclusively within the UK.
3. EARNINGS PER SHARE
Unaudited Unaudited
6 months ended 6 months ended
30 September 2021 30 September 2020
Profit/(Loss) per share has been calculated using the following:
Profit/(Loss) from continuing operations (£'000) 35,482 (416)
Weighted average number of shares ('000s) 606,208 607,796
-------------- --------------
Basic profit/(loss) per ordinary share 5.85p (0.07)p
====== ======
4. INTANGIBLE ASSETS
Regulatory Goodwill Internally
Client Approvals Arising on Developed
Lists & Systems Consolidation Assets Total
£'000 £'000 £'000 £'000 £'000
Cost
Balance at 1 April 2021 (Audited) 9,185 - 14,751 2,481 26,417
Additions 315 - 367 159 841
Disposals - - (1,916) - (1,916)
------------- ------------- ------------- ------------ ---------------
Balance at 30 September 2021 9,500 - 13,202 2,640 25,342
(Unaudited) ------------- ------------- ------------ ------------ ---------------
Accumulated amortisation
Balance at 1 April 2021 (Audited) 7,242 - 235 1,238 8,715
Amortisation 118 - - 10 129
------------ ------------ ----------- ------------ ---------------
Balance at 30 September 2021 7,360 - 235 1,248 8,844
(Unaudited) ----------- ----------- ------------ ------------ ---------------
Net Book Value
At 1 April 2021 (Audited) 1,944 - 14,516 1,243 17,703
====== ====== ====== ====== =======
At 30 September 2021 2,140 - 12,967 1,392 16,499
(Unaudited) ====== ====== ====== ====== =======
5. SHARE CAPITAL
Unaudited Audited
30 September 2021 31 March
2021
£'000 £'000
Called up share capital
Allotted, called up and fully paid
5,791,677 Ordinary shares of 1 pence each 5,792 6,079
(31 March 2021: 607,795,801)
Capital Repayment Reserve 287 -
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