REG - Tavistock Investment - Interim Results
09/12/2024 07:00
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RNS Number : 3029P Tavistock Investments PLC 09 December 2024
Tavistock Investments Plc
("Tavistock", the "Company" or the "Group")
Interim Results deliver Progress and Enhanced Scope for Growth
9 December 2024
Tavistock (AIM: TAVI) announces its unaudited interim results for the six
month period ended 30 September 2024.
Key milestones in strategic repositioning:
In line with its strategy to increase shareholder value by optimising the
balance between regulatory risk and potential commercial reward, during the
period the Board successfully completed:
· the planned reduction in the Group's Appointed Representative
network;
· a highly profitable disposal of its network of self-employed
Registered Individual IFAs, enhancing development capital to provide a
springboard for growth;
· its reorganisation into a Group with profitable core businesses and
significantly improved cash resources, with a strategy to generate increasing
shareholder returns; and,
· the conditional acquisition of Alpha Beta Partners, a well-regarded
asset management business with approaching £3 billion of assets under
management and a retail investor focus complimentary with Tavistock.
An interim dividend of 0.09p per share is to be paid on 16 January 2025, which
is a 29% increase on the dividend that was paid in December 2023. The Record
Date for this dividend will be 27 December 2024 and the Ex-Dividend date will
be 24 December 2024.
Trading summary:
Reflecting the impact of the reduction in the Group's Appointed Representative
network, referred to above, the results for the period can be summarised as
follows:
· revenues of £19.6 million (H1 2023: £20.6 million);
· adjusted EBITDA of £0.7 million (H1 2023: £1.8 million), and
· reported loss from operations of £0.2 million (H1 2023: profit of
£0.9 million).
Brian Raven, Tavistock's Chief Executive, said: "I am pleased with the
significant progress we've made with the strategic refocussing of the Group's
activities, increasing our ability to provide solutions in the UK retail
investment market. I anticipate that the non-advised provision of investment
management services to the clients of third-party advice businesses and
directly to the public will become a substantial part of Tavistock's service
proposition. Our debt facility with Bank of Ireland and cash resources
following the disposal of our network of self-employed IFAs give us the
wherewithal to expand our scope and profitability and we are in active talks
with a number of targets."
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, Liz Kirchner, Daniel Dearden-Williams
Sales and Corporate Broking:
Tony Quirke
Flagstaff Communications tavistock@flagstaffcomms.com
(Financial PR/IR)
Tim Thompson
Alison Allfrey
Anna Probert
TAVISTOCK INVESTMENTS PLC
CHAIRMAN'S STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
The Board's strategy is to optimise the balance between regulatory risk and
potential commercial reward thereby increasing the intrinsic value of the
Company for the benefit of its shareholders.
I am therefore pleased to report that significant progress has been achieved
by the Board with the refocusing of the Group's proposition.
During the period under review, the Board successfully completed the planned
reduction in the Group's Appointed Representative network and negotiated a
highly profitable disposal of its network of self-employed Registered
Individual IFAs to The Saltus Partnership LLP ("Saltus"). This transaction is
addressed is greater detail below.
Financial performance during the period
The reduction of the Group's Appointed Representative network has inevitably
had an adverse impact on the level of gross revenue and reported EBITDA for
the period.
The Company's performance during the period, and during the equivalent period
last year, is summarised in the table below.
Adjusted EBITDA (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) is highlighted as the Board considers this, rather than
Operating Profit, to be the best measure of the Company's underlying
performance.
RESULTS FROM ONGOING ACTIVITIES 6 months ended 6 months ended Movement
30 Sept '24 30 Sept '23
£'000s £'000s
Gross revenues 19,620 20,560 4% decrease
Adjusted EBITDA 670 1773 62% decrease
Depreciation & Amortisation (807) (693) 16% increase
Share based payments (51) (116) 56% decrease
Reported (Loss)/Profit from Operations (188) 915
(Loss)/Earnings per ordinary share (0.18)p 0.04p
Net assets at Interim end 39,510 40,692 3% decrease
Cash resources at Interim end 2,909* 2,596 12% increase
*After the period end, the Company received the initial consideration payment
from Saltus (see details below) which increased its cash resources by £22
million.
Strategic repositioning
On 1 October 2024, the Company announced that it has entered into an agreement
for the sale of two of its subsidiary businesses: Tavistock Partners Limited
("TPL") and Tavistock Estate Planning Services Limited ("TEPS") to Saltus for
a cash consideration of up to £37.75 million.
The consideration was substantially higher than the market capitalisation of
the Company on AIM and the disposal of these businesses affords the Company an
opportunity to realise a significant profit on the investment that it has made
over past years in acquiring and developing these businesses.
Prior to completion of this transaction, the Board took certain steps to
re-organise the Group in order to transfer to TPL all of the current operating
assets and intellectual property within Tavistock Partners (UK) Limited,
including the benefit of client relationships, adviser contracts and other
contractual relationships.
All the completion conditions for the transaction were subsequently satisfied
and on 29 November 2024, the Company received the initial consideration
payment of £22 million. This provides the Company with significant working
and development capital for potential future acquisitions which will enable
the continued reshaping of the Group.
On 22 November 2024, the Company announced that it has exchanged contracts for
the acquisition of Alpha Beta Partners Limited ("ABP"), a well-regarded asset
management business based in London and Bath. ABP has some £3 billion of
assets under management and a strategic focus on retail investors served by
regulated advice businesses which is complementary to Tavistock's own business
positioning.
This acquisition strengthens Tavistock's asset management scale and solutions
provision in the UK retail investment market. It is a key step in the Group's
refocusing into a much more significant asset manager providing investment
solutions to third party advice firms and networks, as well as to retail
clients directly.
Led by Geoff Brooks and Andrew Thompson together with a team of experienced
industry professionals, ABP was established in 2017 to provide outsourced
investment propositions to regulated advice businesses and networks. ABP is
particularly noted for its "Dynamic Asset Allocation" process and modular
proposition, providing retail and wholesale investors with institutional
techniques rarely found in this market segment. The success of its
outcome-oriented investment solutions has been recognised by Defaqto's 5 Star
and 5 Diamond Ratings for the past 5 years.
The total consideration to be paid for ABP will be directly linked to its
financial performance over the next five years. There will be an initial
payment of £6.0 million at completion of the acquisition with the maximum
potential consideration capped at £18.0 million, payable in cash. Completion
of the transaction is subject to change in control approval by the Financial
Conduct Authority (the "FCA").
The acquisition is a logical next step for Tavistock, having completed the
planned reduction of the Group's network of appointed representative firms and
the disposal of its networks of self-employed Registered Individuals to
Saltus.
Following the Saltus transaction the Company has retained both its profitable,
employed adviser business, Tavistock Private Client, and its profitable
protection business, Tavistock Protect. The Board intends that the provision
of investment management services to the clients of third-party advice
businesses, and directly to the public on a non-advised basis, will become a
substantial part of the Group's service proposition.
Hence, the addition of ABP to the Group is particularly fitting, as it will
form the cornerstone of the Company's strategic focus on asset management.
Dividends
The Company is proposing to pay an interim dividend on 16 January 2025 of
0.09p per share, which is a 29% increase on the dividend that was paid in
December 2023. The Record Date for this dividend will be 27 December 2024 and
the Ex-Dividend date will be 24 December 2024.
Prospects
The Board's focus continues to be on optimising the Group's structure and
maximising shareholder value. The Board is in active discussions with a number
of acquisition targets and the Group is well capitalised thanks to its debt
facility with Bank of Ireland and cash resources following the disposal of its
network of self-employed Registered Individual IFAs.
I look forward to updating shareholders in due course.
Oliver Cooke
Chairman
9 December 2024
TAVISTOCK INVESTMENTS PLC
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
Unaudited Unaudited
6 months ended 6 months ended
30 September 30 September
2024 2023
Note £'000 £'000
Revenue 2 19,620 20,560
Cost of sales 2 (12,495) (12,827)
------------ ------------
Gross profit 7,125 7,733
Administrative expenses 2 (7,313) (6,818)
-------------- --------------
(Loss)/ Profit from Total Operations (188) 915
Adjusted EBITDA 670 1,773
Depreciation & Amortisation (807) (693)
Share Based Payment (51) (116)
Exceptional costs - (49)
-------------- --------------
Profit/(Loss) from Operations (188) 915
Finance costs (152) (131)
LLP members remuneration charged as an expense (649) (572)
Share of profit/(loss) in associate - 28
------------ ------------
(Loss)/ Profit before taxation (989) 240
Taxation - -
------------ ------------
(Loss)/ Profit after taxation (989) 240
------------ ------------
(Loss)/ Profit after taxation and attributable to equity holders of the Parent
and total comprehensive income for the period
(989) 240
====== ======
Loss per share
Basic 3 (0.18)p 0.04p
====== ======
Diluted 3 (0.18)p 0.04p
====== ======
The notes form part of the Unaudited Interim Condensed Consolidated Financial
Statements.
TAVISTOCK INVESTMENTS
PLC
COMPANY NUMBER: 05066489
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2024
Unaudited Audited
30 September 2024 31 March 2024
Note £'000 £'000 £'000 £'000
ASSETS
Non-current assets
Tangible fixed assets 1,193 1,514
Intangible assets 4 31,269 29,141
Investments in associates 5 10,179 10,179
----------------- -----------------
Total non-current assets 42,641 40,834
Current assets
Trade and other receivables 11,320 10,251
Cash and cash equivalents 2,909 4,118
----------------- -----------------
Total current assets 14,229 14,369
----------------- -----------------
Total assets 56,870 55,203
LIABILITIES
Current liabilities (9,274) (7,520)
Non-current liabilities
Loan & Lease liability (2,188) (2,829)
Payments due regarding purchase of client lists (2,624) (779)
Provisions (3,218) (3,571)
Deferred taxation (56) (56)
------------------ ------------------
Total liabilities (17,360) (14,755)
------------------ ------------------
Total net assets 39,510 40,448
========= =========
Capital and reserves
Share Capital 6 5,602 5,602
Share Premium 6 1,828 1,828
Capital Redemption Reserve 6 534 534
Retained Earnings 31,546 32,484
------------------ ------------------
Total equity 39,510 40,448
========= =========
The unaudited interim condensed consolidated financial statements were
approved by the Board and authorised for issue on
9 December 2024.
Oliver Cooke
Chairman
The notes form part of the Unaudited Interim Condensed Consolidated Financial
Statements.
TAVISTOCK INVESTMENTS
PLC
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
Share Capital Share Premium Capital Redemption Reserve Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000
31 March 2023 5,567 1,614 534 34,056 41,771
Loss after tax and total comprehensive income - - - (1,472) (1,472)
Equity settled share-based payments - - - 198 198
Issue of shares 35 214 - - 249
Dividend payment - - - (392) (392)
Closure of subsidiary - - - 94 94
------------- -------------- ------------- --------------- --------------
31 March 2024 5,602 1,828 534 32,484 40,448
-------------- -------------- ------------- -------------- --------------
Loss after tax and total comprehensive income - - - (989) (989)
Equity settled share-based payments - - - 51 51
-------------- -------------- -------------- -------------- --------------
Unaudited 30 September 2024 5,602 1,828 534 31,546 39,510
-------------- -------------- ------------- -------------- --------------
The notes on pages 7-9 form part of the Unaudited Interim Condensed
Consolidated Financial Statements
TAVISTOCK INVESTMENTS PLC
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
Unaudited Audited
Period ended Period ended 31 March 2024
30 September 2024
£'000 £'000
Cash flows from operating activities
Loss before tax (989) (1,306)
Adjustments for:
Share based payments 51 198
Depreciation on tangible fixed assets 308 730
Amortisation of intangible assets 499 818
Regulatory provisions - 857
Exceptional costs/income - 31
Finance costs 152 (234)
Minority interest in LEBC - (109)
----------------- -----------------
Cash flows generated from/(used in) operating activities 21 985
before changes in working capital
(Increase)/decrease in trade and other receivables (1,027) 5.159
Decrease/(Increase) in trade and other creditors 1,203 (8,776)
----------------- -----------------
Cash used in Operations 197 (2,631)
Investing activities
Intangible assets - client lists and internally developed assets (174) (476)
Purchase of tangible fixed assets (17) (317)
Purchase of associate - (4,000)
Deferred consideration payments (435) (1,432))
Amount owed on acquisition of subsidiary - (580)
Cash paid for subsidiary - (3,627)
Cash received on sale of subsidiary - 4,543
Cash received on acquisition of subsidiary - 416
----------------- -----------------
Net cashflow used in investing activities (626) (5,473)
Financing activities
Finance (costs)/income (152) 234
New leases - 257
Lease repayment (226) (530)
New loans - (583)
Loan repayments (402) 3,254
Issue of Share Capital - 250
Dividend payment - (392)
----------------- -----------------
Net cashflow generated from/(used in) financing activities (780) 2,489
----------------- -----------------
Net change in cash and cash equivalents (1,209) (5,615)
Cash and cash equivalents at start of period 4,118 9,733
------------------ ------------------
Cash and cash equivalents at end of period 2,909 4,118
========= =========
The notes form part of the Unaudited Interim Condensed Consolidated Financial
Statements.
TAVISTOCK INVESTMENTS PLC
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2024
1. ACCOUNTING POLICIES
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 pound sterling and all values are
rounded to the nearest thousandth (£'000), except when otherwise indicated.
The accounts have been prepared in accordance with accounting policies that
are consistent with the March 2024 Report and Accounts and that are expected
to be applied in the Report and Accounts of the year ending 31 March 2025.
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 2024 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:
Group Investment Management Advisory Unaudited 30 September 2023 Unaudited 30 September 2023
(Plc) Business
£'000 £'000 £'000 £'000 £'000
Revenue 26 424 19,169 19,620 20,560
Cost of sales (28) (217) (12,250) (12,495) (12,827)
------------- ------------- ------------- ------------- -------------
Gross profit (2) 208 6,919 7,125 7,733
------------- ------------- ------------- ------------- -------------
Attributed Expenses (2,474) (195) (4,593) (7,262) (6,653)
Other Administrative expenses
Share based payments (51) (116)
Regulatory provisions - (49)
------------- -------------
(Loss)/Profit from operations (188) 915
====== ======
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. (LOSS)/EARNINGS PER SHARE Unaudited Unaudited
6 months ended 6 months ended
30 September 2024 30 September 2023
Earnings/(Loss) per share has been calculated using the following:
(Loss)/Profit after taxation (£'000) (989) 240
Weighted average number of shares ('000s) 560,429 560,213
-------------- --------------
Loss/Earnings per ordinary share (0.18)p 0.04p
====== ======
Weighted average number of shares and share options 636,764 638,653
that were exercisable at period end ('000s)
-------------- --------------
Diluted Loss/Earnings per ordinary share (0.18)p 0.04p
====== ======
4. INTANGIBLE ASSETS Goodwill Internally
Client Arising on Developed
Lists Consolidation Assets Total
£'000 £'000 £'000 £'000
Cost
Balance at 1 April 2024 (Audited) 14,888 21,156 3,605 39,650
Additions 2,109 454 64 2,627
------------- ------------- ------------ ---------------
Balance at 30 September 2024 (Unaudited) 16,997 21,610 3,669 42,276
------------- ------------ ------------ ---------------
Accumulated amortisation
Balance at 1 April 2024 (Audited) 8,805 235 1,468 10,507
Amortisation 419 - 80 499
------------ ----------- ------------ ---------------
Balance at 30 September 2024 (Unaudited) 9,224 235 1,548 11,007
----------- ------------ ------------ ---------------
Net Book Value
------------ ------------ ------------ ------------
At 1 April 2024 (Audited) 6,083 20,921 2,137 29,141
====== ====== ====== =======
At 30 September 2024 (Unaudited) 7,773 21,375 2,121 31,269
====== ====== ====== =======
5. INVESTMENTS IN ASSOCIATES
Investments in Associates
Investments in Associates £'000
Cost
Balance at 1 April 2024 (Audited) 10,179
Additions -
------------
Balance at 30 September 2024 (Unaudited) 10,179
======
Net Book Value
At 30 September 2024 (Unaudited) 10,179
======
At 1 April 2024 (Audited) 10,179
======
6. SHARE CAPITAL Unaudited Audited
30 September 2024 31 March
2024
£'000 £'000
Called up share capital
Allotted, called up and fully paid
560,429,005 Ordinary shares of 1 pence each 5,602 5,602
(31 March 2024: 560,429,005)
Capital Redemption Reserve 534 534
====== ======
6,136 6,136
Share Premium 1,828 1,828
------------ ------------
7,964 7,964
====== ======
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