REG - Team PLC - Final Results
01/12/2021 07:05
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RNS Number : 1181U Team PLC 01 December 2021
1 December 2021
TEAM plc
(" TEAM " or the " Company ")
Final Results
TEAM plc (AIM: TEAM), the wealth, asset management and complementary financial
services group, announces its final results for the year to 30 September 2021.
Financial Highlights
o As at 30 September 2021, total client assets increased to £1.9 billion
(31 March 2021: £286 million)
o AUM increased to £295 million (31 March 2021: £286 million) (this will
increase to £372 million with the addition of AUA from Omega)
o Treasury Advisory AUA of £1.6 billion (31 March 2021: nil)
· For the year to 30 September 2021:
o Revenue was £1.5 million
o Adjusted loss before tax of £0.8 million*
o No borrowings and cash of £4.9 million, as at 30 September 2021
Operational Highlights
· March 2021, completed successful listing on AIM raising gross
proceeds of £7.5 million to support the creation of a leading independent
wealth and asset management business through a mix of organic and acquisition
led growth
· July 2021, completed the £2.95 million acquisition of JCAP, a
leading Jersey based provider of cash management services, focused on
improving the return and mitigating the risks associated with the management
of cash for institutions, professional advisers, trustees and high net worth
individuals
· November 2021, £4.0 million proposed acquisition of Omega Financial
Services (Jersey) Ltd ("Omega"), a Jersey-based IFA, specialising in
retirement planning, mortgage advice, life assurance and bespoke investment
advisory services (a separate announcement has also been released today with
further details)
· Strengthened investment management team with new senior hires and
continued to invest in client engagement, systems and controls
· Looking ahead, excellent pipeline of individual and team hires plus
further complementary acquisition opportunities
*Unadjusted Loss before tax of £1.7 million, adjustments for acquisition and
IPO related expenses
Commenting on the results Mark Clubb, Executive Chairman of TEAM, said:
"We are pleased to announce today both our results for the year alongside the
acquisition of Omega, a strong business as well as an entry point for us into
the IFA market and a platform to build upon whilst also being immediately
earnings enhancing. We came to the market in March to build a modern wealth
and asset management business and I am pleased to report that we are making
good progress towards this objective. The acquisitions and senior hires we
have made this year will be a significant step for TEAM towards becoming
cashflow positive in 2023 and we have an excellent pipeline of opportunities
to pursue, to underpin the future growth of the Group."
Enquiries
TEAM plc
Mark Clubb / Matthew Moore
Telephone: +44 (0) 1534 877210
Hannam & Partners
(Financial Adviser to TEAM)
Giles Fitzpatrick / Richard Clarke / Ernest Bell
Telephone: +44 20 7907 8500
Canaccord Genuity Limited
(Nominated Adviser and Broker to TEAM)
Bobbie Hilliam / Alex Aylen
Telephone: +44 20 7523 8000
Novella Communications
(Financial Public Relations)
Tim Robertson / Fergus Young
Telephone: +44 20 3151 7008
Information on TEAM
TEAM plc is building a new wealth, asset management and complementary
financial services group. With a focus on the UK, Crown Dependencies and
International Finance Centres, the strategy is to build local businesses of
scale around TEAM plc's core skill of providing investment management
services. Growth will be achieved via targeted and opportunistic acquisitions,
through team and individual hires, through collaboration with suitable
partners, and organic growth and expansion.
Chairman's Statement
Progress
I am pleased to be presenting the inaugural results of TEAM plc (the
"Company") and its subsidiaries, together, 'the Group' as a public company
following our listing in March 2021 at which time we set out our ambition to
become a leading wealth and asset management business. I am delighted to
confirm that we have made significant progress towards this goal
notwithstanding the challenges presented by the Covid pandemic.
In July we completed the acquisition of Jersey based treasury advisory
business JCAP and today we announced the exchange of contracts to acquire a
Jersey based IFA, Omega Financial Services (Jersey) Limited ("Omega"). These
two businesses, together with the organic growth achieved, and the further
development of our pipeline of potential transactions demonstrate we have
delivered on our early plans and clearly signals the future potential of the
Group.
Our financial results for the period demonstrate a significant improvement in
our revenues, and, while this has taken investment, we expect it to pay off in
future periods. Our revenues rose from £701k in the previous period to
£1,469k, while our operating loss extended to £1,742k (£415k). The
underlying loss, excluding the costs associated with the IPO and acquisitions,
increased to £1,052k from £275k. The group total net assets increased to
£7.4 million, up from £1.4 million, and cash balances at the year end were
£4.9 million (2020: £0.3 million). Financially we are well positioned to
continue with our growth plans.
Ambition
TEAM is building a new wealth, asset management and complementary financial
services group. With a focus on the UK, Crown Dependencies and International
Finance Centres, the strategy is to build local businesses of scale around
TEAM's core skill of providing investment management services. Growth will be
achieved via targeted and opportunistic acquisitions, through team and
individual hires, through collaboration with suitable partners, and organic
growth and expansion.
The acquisitions of both JCAP and Omega have expanded our range of products
and services, together with extending the scale of our addressable market.
Omega extends TEAM into wider financial advice, including pensions and
mortgage advice. Typically, one of the best ways for retail clients to invest
is via pensions and with increasing focus on self-reliance this will continue
to be a growth market. We will look to grow our adviser presence organically,
by recruitment and by selective acquisitions. Omega has a first-class growth
record, is most ably managed and is a foundation for our ambitions in this
sector.
Platform
We are headquartered in Jersey but focused more broadly. We have clients
residing in many different parts of the world. Our platform is particularly
applicable for the British "ex pat" communities benefitting from overseas
pension schemes such as QROPS, QNUPS and International Savings Schemes all of
which necessitate "offshore" custody and management.
We believe having Jersey as a base is an advantage - it is a highly regarded
international financial centre in a tax-neutral environment with strong
connectivity, stable regulatory authorities and an established marketplace for
investment services.
Our initial acquisitions have been in Jersey and these are forming the base
for the Company. As we progress, we will look to acquire businesses and
attract individuals and teams from outside of the Channel Islands.
Client assets and investment performance
A key indicator for our business is AUM and client satisfaction. Clients and
client service, together with investment performance are our priorities. I am
pleased to report we have grown AUM from the start of the year to £295
million and with the acquisition of JCAP we now have cash assets under advice
of £1.6 billion. Omega will bring a further £77 million of AUA, giving total
managed assets of £372 million.
I believe, like many, that we are closer to UK interest rates rising than we
have been for some time. Higher rates will place greater scrutiny on client
cash holdings and should encourage clients both existing and new to consider a
JCAP management solution, which includes diversity of deposits, often
"preferred rates" together with CASS reporting for those who require it. The
JCAP acquisition may prove to be very timely.
Part of AUM growth is investment performance for managed assets. Much work and
development has been completed on the TEAM Multi Asset Portfolio. We now have
three models, Balanced, Growth and Diversified Income, all of which have
performed creditably year to date. Importantly, we can truly display a
differentiated, well-articulated investment process that is being well
received in the market.
To prepare for a future that may not resemble the past, TEAM has developed a
clearly defined two-stage investment process:
1) A strategic macro-overlay that reflects our view of the world and governs
how, and where, we invest capital and risk.
2) A quantitative asset allocation model to execute this view and deliver
what we consider to be the most attractive asset class mix on a medium-to-long
term time horizon.
Within the building blocks of our asset management menu are our in-house
managed Funds.
At the beginning of June, we established the TEAM International Equity UCITS
Fund (Dublin registered). The Fund is a "mega cap" global equities portfolio.
Performance has started well.
Our Fixed Interest capabilities include the three KEOX funds. These have had a
satisfactory performance in what has been a very difficult part of the
investment world over the last twelve months, and funds managed have increased
from £84 million to £95 million over the year.
Transactions and pipeline
Both acquisitions announced in 2021 are significantly earnings enhancing and
are expected to move the Group towards profitability in 2023. As I have
written, both acquisitions extend the range of TEAM's investment services,
bring in capable senior personnel to the Group and have the potential to be
expanded organically and by further acquisition. Looking into 2022, we have an
exciting pipeline of complementary financial services businesses as potential
acquisition targets which we continue to develop.
I remain positive on the prospect of potential team or individual recruitment.
The easing of Covid restrictions is resulting in new approaches. I would add
that being a listed company has enhanced enquiry levels. The ability to reward
and incentivise with listed shares has a strong appeal to the entrepreneurial
candidate.
Internal organisation
Since acquiring TEAM Asset Management, Jersey, in January 2020, the business
has undergone substantial change, with focus on upgrading operational
procedures and service providers alongside the introduction of online access
to their accounts for all clients.
The pandemic placed many challenges in front of us, all of which we have
successfully met. I have to thank all those involved and would particularly
like to mention Matthew Boxall and Managing Director Tony Wilshin, who have
been invaluable. Tony's deep and long operational experience stands us in very
good stead for our future growth.
The past is the past and we are now about the future, a future we can be
optimistic about with a business we can all be proud of. A business with an
inclusive and merit-based culture. A business with good governance, ethics and
a long-term investment philosophy.
We are transparent and accountable, we now have an effective structure which
enables the management to be singularly focused on providing the best
investment advice, and by outsourcing the back office to a leading
administrator, the support and the digital interface with clients is market
leading. Providing an effective structure is also about Regulators,
particularly our local Jersey Financial Services Commission (JFSC). We have
and will continue to invest in this critical area.
We are embarking on the greatest inter-generational transfer of wealth,
following years of asset price inflation, especially in real estate, which has
concentrated wealth amongst the older generations. As this wealth filters
down, creating a new class of private clients, there are opportunities for a
modern wealth and asset manager to make significant inroads. I believe we are
modern, contemporary and highly relevant. That includes ESG considerations in
investment as well as the management of the Group.
Without the support of our shareholders, we would not have been able to have
achieved the progress that we have and their support allows us to plan for the
long term. In return, our aim is to reward them and, ultimately, that is how
we will be judged. I do not take this lightly and as a meaningful shareholder
myself, I look for us to grow in a considered and transparent manner.
I would also like to thank our staff both senior and junior, new and old, the
vast majority of whom are shareholders too. In this regard I consider them my
partners.
Mr J M Clubb
Executive Chair
30 November 2021
Strategic Report
Overview
The Directors' aim is to provide long term capital appreciation for
Shareholders by building a profitable and sustainable business. Growth will be
sought through winning new clients and targeted acquisitions, underpinned by
investment in the support infrastructure.
The Group's overall strategy is to promote the continued development of the
Group into a leading wealth and asset management business. It is expected that
the Group's growth will be achieved through:
· an acquisition driven strategy to consolidate the offshore and
onshore wealth and asset management market.
· a focus on delivering revenue and cost synergies, leveraging our
increasing scale and breadth of services to gain a greater share of client
wallet and economies of scale for clients and the Group.
· identifying complementary services such as specialist funds, cash
management, and corporate services.
· the expansion into complementary locations - onshore UK, Crown
Dependencies, other International Finance Centres, and
· AUM growth through team lifts, selective hires and targeted business
development in Jersey and other locations.
The Directors believe that the successful execution of a buy and build
strategy to acquire incremental scale is likely to have the most meaningful
impact on the future value of the Group. The Directors believe that there are
a number of asset managers who are significantly underperforming due to a
variety of factors including poor management, increased regulatory and
technology requirements, lack of capital and strategic vision.
The Listing
On 8 March 2021, TEAM plc was admitted to trading on the AIM market of the
London Stock Exchange.
The net proceeds of the fundraising receivable by the Company were
approximately £6.4 million. The net proceeds were applied principally as
follows:
· to fund the general working capital requirements of the Group.
· to repay the loans provided by Mr J M Clubb; and
· to finance acquisition opportunities that may arise from time to
time.
The Directors are of the opinion that Admission will be beneficial to the
Group for the following reasons:
· it will raise the profile of the Group.
· the Group will be better positioned to attract, recruit and retain
key employees.
· it will provide the Group with flexibility for further organic and
acquired growth, specifically by providing access to capital from
institutional investors. The Company will also be able to issue new shares in
a liquid asset as consideration in connection with acquisition opportunities,
a differentiator to the many private equity backed business in the sector.
Operational Strategy
TEAM has put in place an operating infrastructure, resulting in efficient and
effective regulatory compliance that has scalability to meet the organic
growth ambitions of the Directors. TEAM Asset Management clients are well
informed through regular communications via website publications, face to face
meetings or presentations. The Directors believe that TEAM Asset Management is
focused on customer service, operational efficiency, independent risk control
and compliance supervision and that the business model and operating systems
are scalable.
Acquisition of JCAP Limited
On 5 July 2021 TEAM plc acquired the entire share capital of JCAP Limited, a
leading Jersey based provider of cash management services, focused on
improving the return and mitigating the risks associated with the management
of cash for institutions, professional advisers, trustees and high net worth
individuals.
Highlights
· JCAP is a well-established and profitable Jersey business, and has
been known to Mr J M Clubb, Executive Chair of TEAM, since its establishment
in 2010.
· JCAP provides a range of cash management services to institutions,
professional advisers, trustees and high net worth individuals.
· It has long-term partnerships established with leading global
providers of treasury management and foreign exchange services, providing
diversification of income sources, and significant opportunities for high
profit margin growth.
· In the unaudited accounts for the year to 31 December 2020 JCAP
generated revenues of £1.0 million and made a post-tax profit of £0.4
million. Net assets at that date were £0.9 million.
· The total net consideration is up to £2.95 million, of which £2.2m
will be paid in cash and the remainder in new shares. The net tangible current
assets of JCAP are acquired on a pound for pound basis.
The acquisition has a compelling strategic rationale:
· fits with TEAM's strategy to acquire wealth, asset management and
complementary financial services business.
· clear synergistic revenue growth opportunities through providing cash
management services to the TEAM client base, and through the potential to
launch cash management products through the regulated fund business of TEAM.
· builds scale in the home market of Jersey.
Material financial benefits expected from the acquisition:
· a significant increase in the revenues of the Group, with the addition
of over £1.6 billion in assets under advice, and a significant step for TEAM
towards becoming cashflow positive.
· a combination of expected revenue and cost synergies, through client
referral, co-locating in TEAM's offices, and through using TEAM's governance
and control infrastructure.
· the net consideration represents a P/E multiple of 7.9 times the 2020
earnings.
Acquisition of Omega Financial Services (Jersey) Limited
Today we announced that we had exchanged contracts to acquire, subject to
regulatory approval, a Jersey based IFA, Omega Financial Services (Jersey)
Limited, a specialist in retirement planning, mortgage advice, life assurance
and bespoke investment advisory services.
The acquisition has a compelling strategic rationale:
· TEAM was established to become a leading independent wealth and
asset management business, via (amongst other paths) acquiring offshore wealth
management businesses which add to scale and breadth of services.
· Omega is a successful Jersey based IFA providing financial and
investment advice to 500+ discretionary only clients, with assets under
management of £77 million (as at 30 Sept 2021) and a solid track record of
profitability.
· on completion of the transaction, TEAM will have assets under
management ("AUM") of £372 million and assets under advice ("AUA") of £1.6
billion.
· the acquisition is a strong fit with TEAM's existing businesses and
investment expertise, expanding the Jersey based client base and AUM as well
as introducing IFA expertise into the Group.
Financial Highlights
· In the 12 months to 31 December 2020, Omega generated revenues of
£1.1 million and made a net profit before directors' payments of £0.85
million.
· Omega generates a run-rate EBITDA of approximately £0.7 million,
which on a pro forma basis is expected to be a significant step for TEAM
towards becoming cashflow positive;
· The payment at completion will be £1.98 million in cash and £0.02
million in new TEAM shares. The deferred component is split over two equal
payments, payable subject to certain performance conditions being met, made up
of £0.785 million in cash and £0.215 million in shares, for a total net
consideration of up to £4.0 million. The net tangible current assets of
Omega, less the regulatory capital required in the business, will be acquired
on a pound for pound basis.
· The upfront cash consideration will be funded from TEAM's existing
cash resources, and the deferred payments from existing cash resources, and
earnings from Omega.
Mr M C Moore
CFO and COO
30 November 2021
Financial Overview
A summary of the Group's performance for the financial year is set out below:
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Revenues 1,469 701
Cost of sales (267) (69)
Operating expenses (2,944) (1,047)
Operating loss (1,742) (415)
Operating loss before exceptional items (1,052) (275)
Exceptional items (690) (140)
Operating loss after exceptional item (1,742) (415)
Other income and charges (9) (52)
Loss before tax (1,751) (467)
Tax 45 5
Loss after tax (1,706) (462)
Adjusted EBITDA, excluding exceptional items, is set out below:
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Loss after tax (1,706) (462)
Interest 9 52
Tax (45) (5)
Depreciation 60 43
Amortisation of intangible assets 194 70
EBITDA (1,488) (302)
IPO related expenses* 449 140
Acquisition related expenses** 241 25
Adjusted EBITDA (798) (137)
Notes:
*On 8 March 2021 TEAM plc was admitted to AIM, costs relating to this exercise
are treated as exceptional.
** These are third party charges relating to the acquisition of Theta, JCAP
and Omega and the potential offer for Tavistock plc.
Financial analysis
The results for the period to 30 September 2021 when compared to the prior
period are as follows:
Revenue: TEAM Asset Management's fees are directly linked to its clients' AUM,
and so the market turbulence around March of 2020 had a negative impact on
revenues earned. By September 2020 global equity markets had broadly recovered
to their pre-pandemic highs, and the past 12 months has seen a steady bull
market in equities. New clients have continued to be attracted to TEAM Asset
Managements' offering, while the sizeable gains made through the recruitment
of teams from peers in Jersey were not seen this year. Some client losses were
experienced as was expected with the change in staff. The business has started
a fee review programme, and the benefits of moving clients to our new standard
tariffs are expected to show in the coming periods.
Discretionary Treasury Advisory* Total
£'m £'m £'m
As at 30 Sept 2020 291 - 291
As at 5 July 2021 - 1,343 1,343
New clients 12 - 12
Lost clients (29) - (29)
Other including market performance 21 257 278
Total AUM at 30 Sept 2021 295 1,600 1,895
Notes:
* Treasury clients are predominantly charged at fixed or capped fees per
client
The acquisition of JCAP on 5 July 2021 made its first contribution to the
Group. Its revenues are steady over the year, and since the acquisition
performance has been on plan.
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Investment Management fees 1,066 541
Commissions 207 160
Other 20 -
Treasury services 176 -
Total 1,469 701
Expenses: TEAM Asset Management has invested in its infrastructure, moving
into larger premises in St Helier to accommodate the greater staff and client
demands, and partnering with Pershing to provide an up to date custody and
administration service for clients. This, along with the recruitment of head
office staff in finance, compliance and operations, a full year of costs for
the plc directors recruited at the time of the IPO, as well as further
recruitment of investment professionals, has led to a significant increase in
the cost base of the business.
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Cost of sales 267 69
Staff costs 1,335 536
Non-staff costs 2,299 676
Adjusted total costs 3,901 1,281
IPO related expenses (449) (140)
Acquisition related expenses (241) (25)
Total 3,211 1,116
Exceptional Items: The costs associated with the professional advice required
for a successful IPO were largely accounted for in the year to September 2021
£449,000, (period ended 30 September 2020: £140,000). Costs relating to
acquisitions in the year totalled £241,000 (period ended 30 September 2020:
£25,000).
Statement of Financial Position: Total Equity as at 30 September 2021 of
£7.4m (2020: £1.4m) saw a significant increase following the subscription
and placing of 8.8 million new shares in the IPO, and the subsequent issue of
£0.6m of shares to part fund the acquisition of JCAP.
Cash Flows: Cash increased to £4.9m (2020: £0.3m) primarily through the
issue of new shares for £7.2m, which was used to fund the losses incurred in
the period, and the cash element of the initial consideration for the
acquisition of JCAP.
Key Performance Indicators
The key targets for the Directors are to:
· improve the operating performance of the Group to a cashflow positive
position;
· build the business to scale within Jersey, which we define as AUM of
over £500m and an operating surplus;
· integrate and deliver the cost and revenue synergies identified in
the acquired businesses, and
· build and convert our pipeline of acquisition opportunities. This will
enable the Directors to reapproach the shareholder base for further funding to
continue the inorganic growth plans of the Group. A necessary part of further
acquisitions will be raising additional financing, and this is expected to be
required for further acquisitions following Omega, which used a substantial
portion of the free cash within the Group.
Dividends: The Board does not propose to pay a dividend in respect of the financial year (period ended 30 September 2020: £nil).
Statement of Financial Position and Capital Structure: Total net assets were
£7.4m (2020: £1.4m) and net current assets £3.5m (2020: £0.2m). Cash
balances at year-end were £4.9m (2020: £0.3m). The calculated expenditure
requirement for TEAM Asset Management for the year ended 30 September 2021,
the only regulated entity in the Group, is £403,000.
Risks and uncertainties: Risk appetite is established, reviewed, and monitored by the Board. The Group, through the operation of its committee structure, considers all relevant risks and advises the Board as necessary. The Group maintains a comprehensive risk register as part of its risk management framework encouraging a risk-based approach to the internal controls and management of the Group.
The Group seeks to ensure that its risk management framework and control
environment is continuously evolving which the Board monitor on an ongoing
basis
Liquidity and capital risk: The Group's focus is on bringing the business to a positive cash flow position, whilst implementing its growth strategy. Before this goal is reached, the availability of sufficient liquid resources to meet the operating requirements of the business, and any deferred payments due to vendors of businesses to the Group, are closely monitored and a key element of any investment decisions taken.
Operational risk: Operational risk is the risk of loss to the Group resulting from inadequate or failed internal processes, people, and systems, or from external events.
Business continuity risk: The risk that serious damage or disruption may be
caused as a result of a breakdown or interruption, from either internal or
external sources, to the business of the Group. This risk is mitigated in part
by the Group having business continuity and disaster recovery arrangements.
Credit risk: The Board takes active steps to minimise credit losses including formal new business approval, and the close supervision of credit limits and exposures and the proactive management of any overdue accounts. Additionally, risk assessments are performed on an ongoing basis on all deposit taking banks and custodians and our outsourced relationships.
Non-compliance with laws and regulations risk: The Group has Compliance and Operations functions resourced with appropriately qualified and experienced individuals. The Directors monitor changes and developments in the regulatory environment and ensure that sufficient resources are available for the Group to implement any required changes.
Mr M C Moore
CFO and COO
30 November 2021
Corporate Governance
The Board recognises the importance of sound corporate governance and has
adopted the Corporate Governance Guidelines for Smaller Quoted Companies
published in 2018 by the Quoted Companies Alliance (the "QCA Code"). The
Directors anticipate that whilst the Company will continue to comply with the
QCA Code, given the Group's size and plans for the future, it will also
endeavour to have regard to the provisions of the UK Corporate Governance Code
as best practice guidance to the extent appropriate for a company of its size
and nature.
Below are the 10 key governance principles as defined in the QCA Code and
details of how TEAM plc addresses each of these principles.
1. Establish a strategy and business model which promotes long-term value for shareholders
How it should be applied:
The board must be able to express a shared view of the company's purpose,
business model and strategy. It should go beyond the simple description of
products and corporate structures and set out how the company intends to
deliver shareholder value in the medium to long-term. It should demonstrate
that the delivery of long-term growth is underpinned by a clear set of values
aimed at protecting the company from unnecessary risk and securing its
long-term future.
How the Company applies it:
The Board is responsible for the Group's strategy. The operation of the Board
is documented in a formal schedule of matters reserved for its approval which
is reviewed annually. This includes the Group's strategic aims and objectives.
Further, the Group's strategy is explained fully within our Strategic
Report.
2. Seek to understand and meet shareholder needs and expectations
How it should be applied:
Directors must develop a good understanding of the needs and expectations of
all elements of the company's shareholder base.
The Board must manage shareholders' expectations and should seek to understand
the motivations behind shareholder voting decisions.
How the Company applies it:
The Board is committed to regular shareholder dialogue with both its
institutional and retail shareholders.
The principal opportunity for the board to meet shareholders is at the
Company's AGM, to which shareholders are encouraged to attend.
The Company also has a dedicated email address which investors can use to
contact the company. The CEO is responsible for reviewing all communications
received from shareholders and determining the most appropriate response.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
How it should be applied:
Long-term success relies upon good relations with a range of different
stakeholder groups both internal (workforce) and external (suppliers,
customers, regulators and others). The board needs to identify the company's
stakeholders and understand their needs, interests and expectations.
Where matters that relate to the company's impact on society, the communities
within which it operates or the environment have the potential to affect the
company's ability to deliver shareholder value over the medium to long-term,
then those matters must be integrated into the company's strategy and business
model.
Feedback is an essential part of all control mechanisms. Systems need to be in
place to solicit, consider and act on feedback from all stakeholder groups.
How the Company applies it:
The Directors believe that, in addition to its shareholders, the main
stakeholders of the Company are its clients, its employees, the communities in
which it operates and its two regulatory bodies (the London Stock
Exchange, and the Jersey Financial Services Commission).
The Company acts with integrity, focuses on creating results and importantly
values people - from its members of staff to those who form the communities it
engages with.
The Company dedicates significant time to understanding and acting on the
needs and requirements of each of these Groups by way of meetings dedicated to
obtained feedback.
The Directors are available to discuss any matter stakeholders might wish to
raise.
4. Embed effective risk management, considering both opportunities and threats, throughout the organisation
How it should be applied
The board needs to ensure that the company's risk management framework
identifies and addresses all relevant risks in order to execute and deliver
strategy; companies need to consider their extended business, including the
company's supply chain, from key suppliers to end-customer.
Setting strategy includes determining the extent of exposure to the identified
risks that the company is able to bear and willing to take (risk tolerance and
risk appetite).
How the Company applies it
The Board is responsible for determining the nature and extent of significant
risks that may have an impact on the Group's operations, and for maintaining a
risk management framework. The Board is responsible for the management of risk
and regularly carries out a robust assessment of the principal risks and
uncertainties affecting the Group's business, discussed how these could affect
operations, performance and solvency and what mitigating actions, if any, can
be taken. There is an annual review of the business risk assessments.
5. Maintain the board as a well-functioning, balanced team led by the chair
How it should be applied
The board members have a collective responsibility and legal obligation to
promote the interests of the company and are collectively responsible for
defining corporate governance arrangements. Ultimate responsibility for the
quality of, and approach to, corporate governance lies with the chair of the
board.
The board (and any committees) should be provided with high quality
information in a timely manner to facilitate proper assessment of the matters
requiring a decision or insight.
The board should have an appropriate balance between executive and
Non-executive directors and should have at least two independent non-
executive directors. Independence is a board judgement.
The board should be supported by committees (e.g. audit, remuneration,
nomination) that have the necessary skills and knowledge to discharge their
duties and responsibilities effectively.
How the Company applies it
The Board is responsible for the overall management of the Group including the
formulation and approval of the Group's long-term objectives and strategy, the
approval of budgets, the oversight of Group operations, the maintenance of
sound internal control and risk management systems and the implementation of
Group strategy, policies and plans. While the Board delegates specific
responsibilities, there is a formal schedule of matters specifically reserved
for decision by the Board. Such reserved matters include, amongst other
things, approval of significant capital expenditure, material business
contracts and major corporate transactions. The Board meets regularly to
review performance.
The QCA Code recommends at least two members of the Board comprise
Non-executive directors determined by the Board to be independent. The Board
comprises of five directors, of whom two are executive and three are
non-executive. The Board considers all three of the Non-executives, to be
independent and, as such, the Company will comply with the requirements of the
QCA Code in this regard.
The Board recognises that the QCA states that save in exceptional
circumstances, a chairman should not also fulfil the role of chief executive.
The Company does not have a chief executive, but rely on Mr J M Clubb as
Executive Chair and Mr M C Moore as Chief Financial Officer and Chief
Operating Officer to fulfil the duties of a chief executive. The Board
believes this is appropriate due to the Company having limited financial and
operational scale at Admission. The role and responsibilities of Mr J M Clubb
and Mr M C Moore are supported by Shareholders. The Board however intends to
appoint a chief executive in the future, at the appropriate moment, and the
role of Mr J M Clubb as an executive director will be reviewed. The Company is
committed to having a majority of independent directors at all times.
With effect from Admission, the Board has established an audit and risk
committee (the "Audit and Risk Committee"), a nomination committee (the
"Nomination Committee") and a remuneration committee (the "Remuneration
Committee") with formally delegated responsibilities.
6. Ensure that between them the directors have the necessary up-to-date experience, skills, and capabilities
How it should be applied
The board must have an appropriate balance of sector, financial and public
markets skills and experience, as well as an appropriate balance of personal
qualities and capabilities. The board should understand and challenge its own
diversity, including gender balance, as part of its composition.
The board should not be dominated by one person or a group of people. Strong
personal bonds can be important but can also divide a board.
As companies evolve, the mix of skills and experience required on the board
will change, and board composition will need to evolve to reflect this
change.
How the Company applies it
The experience and knowledge of each of the Directors gives them the ability
to constructively challenge strategy and to scrutinise performance.
Mr J M Clubb brings leadership, sector expertise and experience of
substantially growing small businesses. Mr M C Moore brings sector expertise,
financial and operational leadership, and experience of acquisition led growth
strategies. Mr L P C Taylor, Mr M M Gray and Mr D J K Turnbull bring
additional strategic, regulatory, commercial, transaction and leadership
experience which will be invaluable as the Board pursues the Company's growth
strategy and continues to develop the Group.
Directors are expected to attend all meetings of the Board, which will all be
held in Jersey, and the committees on which they sit, and to devote
sufficient time to the Group's affairs to enable them to fulfil their duties
as Directors. In the event that Directors are unable to attend a meeting,
their comments on papers to be considered at the meeting will be discussed in
advance with the Chairman so that their contribution can be included in the
wider Board/committee discussion.
The Company Secretary ensures that all Directors are kept abreast of changes
in relevant legislation and regulations, with the assistance of the Company's
advisers where appropriate. The Executive Directors are subject to the
Company's performance development review process through which their
performance against predetermined objectives is reviewed and their personal
and professional development needs considered. The Directors are encouraged to
raise any personal development or training needs with the Chairman
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
How it should be applied
The board should regularly review the effectiveness of its performance as a
unit, as well as that of its committees and the individual directors.
The board performance review may be carried out internally or, ideally,
externally facilitated from time to time.
The review should identify development or mentoring needs of individual
directors or the wider senior management team.
It is healthy for membership of the board to be periodically refreshed.
Succession planning is a vital task for boards. No member of the board should
become indispensable.
How the Company applies it
A process of formal annual Board evaluation will take place for each period
going forward. In addition, the Non-executive Directors will meet, without the
Chairman present, and will evaluate his performance.
The Nomination Committee is required to give recommendations to the Directors
where there are vacancies or where it is felt that additional directors should
be appointed. For new appointments the search for candidates is conducted, and
appointments are made, on merit, against objective criteria and with due
regard for the benefits of diversity on the Board.
8. Promote a corporate culture that is based on ethical values and behaviours
How it should be applied
The board should embody and promote a corporate culture that is based on sound
ethical values and behaviours and use it as an asset and a source of
competitive advantage.
The policy set by the board should be visible in the actions and decisions of
the chief executive and the rest of the management team. Corporate values
should guide the objectives and strategy of the company.
The culture should be visible in every aspect of the business, including
recruitment, nominations, training and engagement. The performance and reward
system should endorse the desired ethical behaviours across all levels of the
company.
The corporate culture should be recognisable throughout the disclosures in the
annual report, website and any other statements issued by the company.
How the Company applies it
The Board monitors and promotes a healthy corporate culture and has considered
how that culture is consistent with the Company's objectives, strategy and
business model and with the description of principal risks and
uncertainties.
The Board has considered and assessed the culture as being inclusive,
transparent and collaborative with appropriate behaviours. The Group has a
Code of Conduct, an Anti-bribery and Corruption Policy, and policies and
procedures relating to whistleblowing stating the Company's commitment to
conducting its business with honesty and integrity, its expectation that staff
will maintain high standards, and encouraging prompt disclosure of any
suspected wrongdoing. All such policies are available to view in the staff
handbook.
The terms of reference of the Audit Committee include reviewing the adequacy
and security of the Company's arrangements for its employees and contractors
to raise concerns, in confidence, about possible wrongdoing in financial
reporting or other matters and keeping under review the Company's procedures.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board
How it should be applied
The company should maintain governance structures and processes in line with
its corporate culture and appropriate to its:
· size and complexity; and
· capacity, appetite, and tolerance for risk.
The governance structures should evolve over time in parallel with its
objectives, strategy, and business model to reflect the development of the
company.
How the Company applies it
The Board has an established Audit, Remuneration, Risk and Nomination
Committees which meet regularly in accordance with their terms of reference.
The details of these committees, including their terms of reference and
composition, are set out in our website. This detail also includes the roles
and responsibilities of each of the Directors.
The matters reserved for the board, are set out in the Board Terms of
Reference, and can be summarised as follows:
· Reviewing, approving, and guiding corporate strategy, major plans
of action, risk appetite and policies, annual budgets and business plans;
setting performance objectives; monitoring,
implementation and corporate performance; and overseeing major capital
expenditures, acquisitions and disposals.
· Monitoring the effectiveness of the Company's governance
arrangements and practices, making changes as needed to ensure the alignment
of the Company's governance framework with current best practices.
· Ensuring that appointments to the Board or its Committees
are effected in accordance with the appropriate governance process.
· Monitoring and managing potential conflicts of interest of
management, Board members, shareholders, external advisors, and other service
providers, including misuse of corporate assets and abuse in related party
transactions; and overseeing the process of external disclosure and
communications.
· The Board is also responsible for all other matters of such
importance as to be of significance to the Group as a whole because of their
strategic, financial, or reputational implications or consequences.
At this stage the board believes that the governance framework is appropriate
for a Company of its size, but it continues to keep this under review.
10. Communicate how the company is governed and is performing by maintaining a
dialogue with shareholders and other relevant stakeholders
How it should be applied
A healthy dialogue should exist between the board and all of its stakeholders,
including shareholders, to enable all interested parties to come to informed
decisions about the company.
In particular, appropriate communication and reporting structures should exist
between the board and all constituent parts of its shareholder base. This will
assist:
· the communication of shareholders' views to the board; and
· the shareholders' understanding of the unique circumstances and
constraints faced by the company.
It should be clear where these communication practices are described (annual
report or website).
How the Company applies it
The Company is committed to open dialogue with all its stakeholders. The
Executive Chair liaises with the Company's principal shareholders, regulators
and, where appropriate, clients and relays their views to the wider Board.
On the Company's website ('www.teamplc.co.uk') shareholders can find all
historical regulatory announcements, Interim Reports and Annual Reports.
Annual Reports and Annual General Meeting Circulars are posted directly to all
registered shareholders or nominees and results of Annual General Meeting
votes are also published on the Company's website. As described earlier, the
Company also maintains email and phone contacts which shareholders can use to
make enquiries or requests.
The Non-executive Directors are available to discuss any matter stakeholders
might wish to raise, and the Executive Chair and Non-executive Directors will
attend meetings with investors and analysts as required.
Following the Company's AGM, the results of all votes will be made available
on the website.
By order of the Board
Mr M C Moore
CFO and COO
30 November 2021
The Board and its Committees
The Board is responsible for the overall management of the Group including the
formulation and approval of the Group's long-term objectives and strategy, the
approval of budgets, the oversight of Group operations, the maintenance of
sound internal control and risk management systems and the implementation of
Group strategy, policies and plans. While the Board may delegate specific
responsibilities, there will be a formal schedule of matters specifically
reserved for decision by the Board. Such reserved matters will include,
amongst other things, approval of significant capital expenditure, material
business contracts and major corporate transactions. The Board meets regularly
to review performance.
The QCA Code recommends at least two members of the Board comprise
Non-executive directors determined by the Board to be independent. From
Admission, the Board is comprised of five directors, of whom two are executive
and three are non-executive. The Board considers all three of the
Non-executive directors to be independent and, as such, the Company complies
with the requirements of the QCA Code in this regard.
The Board recognises that the QCA states that save in exceptional
circumstances, a Chairman should not also fulfil the role of Chief Executive.
The Company does not have a Chief Executive but relies on Mr J M Clubb as
Executive Chairman and Mr M C Moore as Chief Financial Officer and Chief
Operating Officer to fulfil the duties of a Chief Executive. The Board
believes this is appropriate due to the Company having limited financial and
operational scale at Admission. The roles and responsibilities of Mr J M
Clubb and Mr M C Moore are supported by Shareholders. The Board, however,
intends to appoint a Chief Executive in the future, at the appropriate moment,
and the role of Mr J M Clubb as an executive director will be reviewed. The
Company is committed to having a majority of independent directors at all
times.
Since Admission, the Board has established an audit and risk committee (the
"Audit and Risk Committee"), a nomination committee (the "Nomination
Committee") and a remuneration committee (the "Remuneration Committee") with
formally delegated responsibilities. The reports of the chairs of these
committees are as follows:
The Audit and Risk Committee
The Audit and Risk Committee is chaired by Mr L P C Taylor. Its other members
are Mr M M Gray and Mr D J K Turnbull, with Mr M C Moore in attendance.
The Committee has primary responsibility for monitoring the quality of
internal controls and ensuring that the financial performance of the Company
is properly measured and reported on.
The Committee receives and reviews reports from the Company's management and
auditor relating to the interim and annual accounts and the accounting and
internal control systems in use throughout the Group. Further, the Committee
advises the Board on the Group's overall risk appetite and strategy, the risk
assessment processes, including in relation to remuneration and compliance
functions, and assisting in overseeing implementation of the adopted strategy.
The Committee meets at least three times a year at appropriate intervals in
the financial reporting and audit cycle and otherwise as required. The
Committee has unrestricted access to the Company's auditor.
The principal areas of focus during the year included the following items:
1. Review of internal controls and compliance procedures.
2. Review of the Annual Report and financial statements.
3. Approval of the management representation letter.
4. Review of the independence of the auditors, their fees and engagement
letter
The Committee met with the external auditors to review their Audit Plan, their
report and significant findings arising during the audit.
Role of the external auditors
The Committee monitored the relationship with the external auditors, Grant
Thornton Channel Islands, to ensure their independence and objectivity. Based
on that assessment the Committee recommended to the Board the re-appointment
of Grant Thornton Channel Islands. In assessing independence and objectivity,
the Committee considered the level and nature of services provided by Grant
Thornton Channel Islands as well as confirmation from them that they have
remained independent within the meaning of the Auditing Practice Board Ethical
Standards of Auditors.
The auditors did not carry out any non-audit services during the year.
Audit process
The external auditors prepared an Audit Plan for their review and audit of the
full year financial statements. The audit plan set out the scope of the audit,
areas of risk and audit timetable. Following their audit, the auditors
presented their findings to the Audit Committee.
Internal audit
The Group assessed the need for an internal audit function and considered that
in the light of the existing control environment within the business, there is
currently no requirement for a separate internal audit function.
Mr L P C Taylor
Chairman of the Audit & Risk Committee
30 November 2021
Nomination Report
The Nomination Committee is chaired by Mr D J K Turnbull and its other members
are Mr L P C Taylor, Mr M M Gray and Mr J M Clubb. Mr M C Moore acts as its
Secretary.
The Committee meets twice a year and otherwise as required.
The Nomination Committee assists the Board in discharging its responsibilities
relating to the composition of the Board. It is responsible for, and evaluates
on a regular basis, the balance of skills, experience, independence and
knowledge of the Board, its size, structure and composition, retirements,
and appointments of additional and replacement directors and will make
appropriate recommendations to the Board on such matters. The Nomination
Committee also considers succession planning, taking into account the skills
and expertise that will be needed on and beneficial to the Board in the
future.
In October 2021 the Committee met for the first since TEAM plc listed on AIM
and since the current board was appointed.
The Committee assessed and confirmed the individual and collective suitability
of Board members - the balance of skills, experience, independence and
knowledge of the board as well as its composition. The Chairman stated that
his assessment of all Directors was that they were performing well and The
Committee agreed. Collectively, it was agreed that the Board had operated
effectively, that The Executive had performed well in the context of COVID-19
and executing TEAM's strategy and that Non-Executives had provided appropriate
challenge and guidance.
It was agreed that the size of the Board is commensurate with the current size
of the business and that the composition provides TEAM with a balanced,
experienced, knowledgeable and informed group of directors who bring strategic
experience, foresight and challenge to the Executive. It was agreed that
overall it operates effectively and, as such, no changes were necessary at
this time to its membership. The Committee noted that it takes into account
the diversity or otherwise of the Board and will continue to do so.
The Committee reviewed succession planning and agreed that a sensible plan was
in place.
Mr D J K Turnbull
Chairman of the Nomination Committee
30 November 2021
Remuneration Report
The Directors present the Directors' Remuneration Report (the "Remuneration
Report") for the financial year ended 30 September 2021.
Composition and Role of the Remuneration Committee
As detailed within the Corporate Governance report, the Board has established
a Remuneration Committee which currently consists of all the Non-Executive
Directors, chaired by Mr M M Gray.
The committee determines and agrees with the Board the framework and policy of
Executive remuneration and the associated costs to the Group and is
responsible for the implementation of that policy. The committee determines
the specific remuneration packages for each of the Executive Directors and no
Director or Senior Executive is involved in any decisions as to their own
remuneration. The committee has access to information and advice provided by
the Executive Chairman and the CFO and has access to independent advice where
it considers it appropriate.
This report explains how the Group has applied its policy on remuneration paid
to Executive Directors.
Framework and Policy on Executive Directors' Remuneration
The Group's remuneration policy is designed to provide competitive rewards for
its Executive Directors, taking into account the performance of the Group and
the individual Executives, together with comparisons to pay conditions
throughout the markets in which the Group operates. It is the aim of the
committee to attract, retain and motivate high calibre individuals with a
competitive remuneration package. It is common practice in the industry for
total remuneration to be significantly influenced by bonuses.
The remuneration packages are constructed to provide a balance between fixed
and variable rewards. Therefore, remuneration packages for Executive Directors
normally include basic salary, bonuses, benefits in kind and share based
rewards. In agreeing the level of basic salaries and annual bonuses the
committee takes into consideration the total remuneration that Executives
could receive.
Basic Salary
Basic salaries are reviewed on an annual basis or following a significant
change in responsibilities. The committee seeks to establish a basic salary
for each Executive determined by individual responsibilities and performance,
taking into account comparable salaries for similar positions in companies of
a similar size in the same market.
Incentive Arrangements
Bonuses
These are designed to reflect the Group's performance, taking into account the
performance of its peers, the market in which the Group operates and the
Executive's contribution to that performance.
Performance related contractual incentive scheme
These are designed to reward performance by the Executive Directors.
Share based rewards
As referred to in the Directors' Report, the Group does not have any option
nor an Employee Share Ownership Trust (ESOT).
Other Employee Benefits
Depending on the terms of their contract the Executive Directors and are
entitled to a range of benefits, including contributions to individual
personal pension plans, private medical insurance and life assurance.
Service Contracts and Notice Periods
The Executive Directors are employed on rolling contracts subject to six
months' notice from either the Executive or the Group, given at any time.
Service contracts do not provide explicitly for termination payments or
damages, but the Group may make payments in lieu of notice. For this purpose,
pay in lieu of notice would consist of basic salary and other relevant
emoluments for the relevant notice period excluding any bonus.
External Appointments undertaken by Executive Directors
In the committee's opinion, experience of other companies' practices and
challenges is valuable for the personal development of the Group's Executive
Directors and for the Company. It is therefore the Group's policy to allow
Executive Directors to accept Non-Executive Directorships at other companies,
provided the time commitment does not interfere with the Executive Directors'
responsibilities within the Group. Fees are retained by the individual
Executive Director.
Non-Executive Directors
All Non-Executive Directors have a letter of appointment for an initial period
of twelve months and thereafter on a rolling basis subject to three months'
notice by either the Non-Executive Director or the Group, given at any time.
In the event of termination of their appointment they are not entitled to any
compensation.
Non-Executive Directors' fees are determined by the Executive Directors having
regard to the need to attract high calibre individuals with the right
experience, the time and responsibilities entailed, and comparative fees paid
in the market in which the Group operates. They are not eligible for pensions.
Management Incentive Plan
On 6th January 2021, the Company established TEAM Midco Limited in order to
grant share awards under the Management Incentive Plan ("MIP"). On that date,
share awards within TEAM Midco Limited were made to participants of the MIP.
These were Mr J M Clubb 375 A Ordinary Shares in TEAM Midco Limited (the "A
Ords") 2021 Shares, Mr M C Moore 438 A Ords and J Jones Series 125 A Ords. The
shares were issued at market value with total subscription price of the shares
being £3,001.60. The Company cancelled these share awards on 30 November 2021
and bought back the A Ords as their grant was not in line with disclosure
contained within the Company's AIM Admission Document dated 2 March 2021. As
set out in the AIM Admission Document, awards will be made to the management
team of the Company to ensure all employees are well motivated and identify
closely with the success of the Group.
Directors' Emoluments
The remuneration of each Director as listed on page 47, in the Company
Information section, during the year ended 30 September 2021 is set out below:
Pension Pension
Contribution Contribution
Year ended Period ended year ended Period ended
Salary Benefits Bonus 30 Sept 2021 30 Sept 2020 30 Sept 2021 30 Sept 2020
£ £ £ £ £ £ £
Executive
J M Clubb 67,498 1,938 20,000 89,436 58,086 4,667 -
M C Moore *** 93,331 4,939 40,000 138,270 - 7,467 -
Non-Executive
L P C Taylor *** 14,581 - - 14,581 - - -
M M Gray *** 14,581 - - 14,581 - - -
D J K Turnbull *** 14,581 - - 14,581 - -
L Smith * 3,750 - - 3,750 6,000 - -
L Trevellyan ** 4,166 - - 4,166 6,610 - -
A Stanton * 2,085 - - 2,085 3,333 - -
214,573 6,877 60,000 281,450 74,029 12,134 -
Notes:
* resigned 1 March 2021
** resigned 27 January 2021
*** appointed 1 March 2021
The highest paid Director for 2021 was Mr M C Moore receiving emoluments of
£138,270 (2020: J M Clubb £58,086).
Mr J M Clubb has a salary of £200,000, of which he has elected to waive half,
ahead of the Group generating a positive cash flow.
Directors' Interests in Management Incentive Plan shares
Total Total
30 Sept 2021 30-Sep-20
Director No. No.
J M Clubb 375 -
M C Moore 438 -
813 -
The management incentive plan does not qualify as an employee share option
scheme as the shares were purchased at fair value. There are no voting rights
attached to these shares.
Director's Report for the year ended 30 September 2021
The directors present their report and the consolidated financial statements
for TEAM plc (the "Company") and its subsidiaries (the "Group") for the period
ended 30 September 2021.
Change of Company name
The company changed its name from Ponterrin Holdings Limited to TEAM plc
effective from 12 October 2020.
Incorporation
The Company was incorporated on 4 July 2019. The Company is a registered
public company limited by share capital and was incorporated and registered in
Jersey, Channel Islands. The Company registration number is 129405.
Directors of the Company
The Directors who held office during the year and their interest in the shares
of the Company were as follows:
30 Sept 2021 30 Sept 2020
Appointed Resigned Number of shares Number of shares
A Stanton 3 Feb 2020 1 March 2021 - -
L Trevellyan 3 Feb 2020 27 Jan 2021 - -
J L G Smith 3 Feb 2020 1 March 2021 - -
J M Clubb 4 July 2019 3,432,500 37,011
M C Moore 1 March 2021 - -
M M Gray 1 March 2021 22,727 -
D J K Turnbull 1 March 2021 17,045 -
L P C Taylor 1 March 2021 17,045 -
Further details of Directors' service contracts, remuneration, share interests
and interests in options over the Company's shares can be found in the
Remuneration Report on page 27.
Major Shareholdings
At the date of publication of this report, the Company had been notified of
the following shareholdings of 3% or more of the share capital:
Ordinary shares %
Pershing (CI) Nominees 6,439,033 37.0%
Chase Nominees Limited 1,653,409 9.6%
HSBC Global Custody Nominees 1,363,636 7.9%
Lance Trevellyan 839,844 4.9%
Metropolitan Guarantee Limited 763,502 4.4%
Pershing Nominees Limited 568,181 3.3%
Prima Investment Limited 568,181 3.3%
Political Contributions
The Group and Company did not make any political donations or incur any
political expenditure during the year (2020: nil)
Going concern
After making enquiries, the Directors have formed a judgement, at the time of
approving the financial information, that there is a reasonable expectation
that the Group has adequate resources to continue in operational existence for
the foreseeable future. For this reason, the Directors continue to adopt the
going concern basis in preparing the financial information.
Certain activities of the Group are regulated by the Jersey Financial Services
Commission, the statutory regulator for financial services business in Jersey
which has responsibility for policy, monitoring and discipline for the
financial services industry. The JFSC requires the regulated entities' capital
resources to be adequate; that is sufficient in terms of quantity, quality and
availability, in relation to its regulated activities. The Directors monitor
the regulatory capital resources on a monthly basis, and they have developed
appropriate scenario tests and corrective management plans which they are
prepared to implement to address any potential deficit as required. Further
actions open to the Directors include incremental cost reductions, or further
capital raising.
In March 2020, the World Health Organization declared the outbreak of novel
coronavirus disease ("COVID-19") as a pandemic. At its peak, the pandemic
caused unpredicted losses in national economies globally, however, its impact
is currently in decline due to major medical advances in vaccination programs
and governments and businesses have been moving back to normality.
The Directors have adjusted certain aspects of Group's operations to protect
employees while still meeting customers' needs for their services. The
Directors will continue to monitor the situation closely and it is possible
that we will implement further measures. The Directors have considered the
impact of COVID-19 on the Group and are of the view that it remains a going
concern after revising forecasts for the period to September 2023 and
reviewing the impact of COVID-19 on the working capital of the Group.
Events after the Reporting Period
On 30 November 2021, TEAM exchanged contracts with the shareholders of Omega Financial Services (Jersey) Limited to acquire 100% of the issued and to be issued share capital of the business. For further details refer to page 10 and the section on Omega in the Strategic Report.
Annual General Meeting (AGM)
The resolutions being proposed at the AGM include usual resolutions dealing
with the ordinary business of the AGM. A description of all the resolutions is
set out within the Notice of AGM document.
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the annual
report and the consolidated financial statements in accordance with applicable
law and regulations.
Companies (Jersey) Law 1991 requires the directors to prepare financial
statements for each financial year. Under that law the directors have elected
to prepare the financial statements in accordance with the requirements of
International Financial Reporting Standards ('IFRS') as issued by the
International Accounting Standards Board ('IASB'). Under Companies (Jersey)
Law 1991 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 company and group and of the profit or loss of the company and group for
that period. In preparing these financial statements, the directors are
required to:
• select suitable accounting policies and apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether applicable Accounting Standards 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 company and group 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 Companies
(Jersey) Law 1991. They are also responsible for safeguarding the assets of
the company and group and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Disclosure of information to the auditors
Each of the persons who are directors at the time that this Directors' Report
is approved has confirmed that:
• so far as that director is aware, there is no relevant audit information
of which the company's and group's auditor is unaware, and
• that director has taken all the steps that ought to have been taken as a
director in order to be aware of any relevant information and to establish
that the company's and group's auditor is aware of that information.
This report was approved by the Board on 30 November 2021and signed on its
behalf by:
Mr J M
Clubb
Mr M C Moore
Executive
Chair
CFO and COO
Independent Auditor's Report
To the members of TEAM Plc
Opinion
We have audited the consolidated financial statements of TEAM Plc (the
"Company") and its subsidiaries (the "Group"), which comprise the Consolidated
Statement of Comprehensive Income, Consolidated Statement of Financial
Position, Consolidated Statement of Changes in Equity, Consolidated Statement
of Cash Flows for the year then ended and Notes to the consolidated financial
statements, including a summary of significant accounting policies. The
consolidated financial statements framework that has been applied in their
preparation is applicable law and International Financial Reporting Standards
(IFRSs) as issued by the International Standards Board (IASB).
In our opinion, the consolidated financial statements:
· give a true and fair view of the state of the Group's affairs as
at 30 September 2021 and of the Group's loss for the year then ended;
· are in accordance with IFRSs as issued by the International
Standards Board (IASB); and
· comply with the Companies (Jersey) Law 1991.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(ISAs) and applicable law. Our responsibilities under those standards are
further described in the 'Auditor's responsibilities for the audit of the
consolidated financial statements' section of our report. We are independent
of the Group in accordance with the International Ethics Standards Board for
Accountants' International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code), together with
the ethical requirements that are relevant to our audit of the consolidated
financial statements in Jersey, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the IESBA Code. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Our approach to the audit
Overview
Materiality
Overall materiality was £389,977, which represents 5% of the Group's net
assets (2020: 7% of the Group's net assets, £92,000).
Audit scope
· We conducted our audit of the consolidated financial statements based
on information provided by the appointed service providers to the Group to
whom the directors have delegated the provision of certain functions,
including bookkeeping and financial statements preparation.
· Our audit opinion covers the consolidated financial statements of the
Group only. We have not been engaged to provide individual statutory opinions
on the financial statements of the Company.
The Company is a Jersey-incorporated company which is listed on AIM.
Key audit matter
· There is a risk that the purchase of the subsidiary was not in
accordance with the requirements of IFRS 3, Business Combinations.
Audit scope
As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the consolidated financial statements. In
particular, we considered where the Directors made subjective judgements; for
example, in respect of significant accounting estimates that involved making
assumptions and considering future events that are inherently uncertain. As in
all of our audits, we also addressed the risk of the Directors override of
internal controls, including among other matters, consideration of whether
there was evidence of bias that represented a risk of material misstatement
due to fraud.
We tailored the scope of our audit in order to perform sufficient work to
enable us to provide an opinion on the consolidated financial statements as a
whole, taking into account the structure of the Group, the accounting
processes and controls, and the industry in which the Group operates.
Materiality
The scope of our audit was influenced by our application of materiality. An
audit is designed to obtain reasonable assurance as to whether the
consolidated financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They 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 consolidated
financial statements.
Based on our professional judgement, we determined certain quantitative
thresholds for materiality, including the overall Group materiality for the
consolidated financial statements as a whole as set out in the table below.
These, together with qualitative considerations, helped us to determine the
scope of our audit and the nature, timing and extent of our audit procedures
and to evaluate the effect of misstatements, both individually and in
aggregate on the consolidated financial statements as a whole.
Overall group materiality £389,977 (2020: £92,000)
How we determined it 5% (2020: 7%) of the Group's net assets
Rationale for the materiality benchmark We believe that net assets is a primary measure used by the shareholders in
assessing the performance of the Group. It is also a generally accepted
measure used for companies in this industry. Our measurement percentage
decreased by 2% from prior year in consideration of the fact that TEAM Plc was
listed in AIM in 2021.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the consolidated financial statements of
the current period. These matters were 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 matter How the matter was addressed in our audit
There is a risk that the purchase of the subsidiary was not in accordance with We confirmed the extracted information from the sale and purchase agreement
the requirements of IFRS 3, Business Combinations. into the goodwill and intangible assets calculation and valuation.
We traced the cash consideration paid to bank statements and tested accuracy
of the acquired assets and liabilities fair value assessment by referencing to
JCAP Limited's accounting records and subsequent transactions.
We assessed the reasonableness of management's inputs, assumptions and
estimates regarding the intangible asset valuation calculations. We have
reviewed the reasonableness of the excess earning model used in the
calculation by comparing the basis for it with the actual amounts incurred in
the current period.
We reviewed the transaction-related disclosures in the financial statements in
accordance with IFRS 3, Business Combination and other relevant standards.
Key Observations
We have not identified any issues in respect of the calculation, accounting
treatment and disclosures relating to the acquisition of subsidiary during the
year.
Other information in the Annual Report
The Directors are responsible for the other information. The other information
comprises the information included in the 'Annual Report and Consolidated
Financial Statements', other than the consolidated financial statements and
our auditor's report thereon. Our opinion on the consolidated 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 consolidated
financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to
which the Companies (Jersey) Law, 1991 requires us to report to you if, in our
opinion:
· proper accounting records have not been kept by the Group; or
· the Group financial statements are not in agreement with the
accounting records; or
· we have not received proper returns adequate for our audit from
branches not visited by us; or
· we have not obtained all the information and explanations, which
to the best of our knowledge and belief, are necessary for the purposes of our
audit.
Responsibilities of the directors for the consolidated financial statements
As explained more fully in the Statement of Directors' Responsibilities set
out on page 30, the Directors are responsible for the preparation of the
consolidated financial statements which give a true and fair view in
accordance with IFRSs as issued by the International Standards Board (IASB),
and for such internal control as the Directors determine is necessary to
enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are
responsible for assessing the 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 to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs will
always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with ISAs, we exercise professional judgment
and maintain professional scepticism throughout the audit. We also:
· Identify and assess the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal
control.
· Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control.
· Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by the
Directors.
· Conclude on the appropriateness of the Directors' use of the going
concern basis of accounting and, based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions that may cast
significant doubt on Company's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention
in our auditor's report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor's report. However, future events or conditions may cause
the Company to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated with the directors, we determine those matters
that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Use of our report
This report is made solely to the Company's members, as a body, in accordance
with Section 113A of the Companies (Jersey) Law 1991. 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.
Jason Richard Lees-Baker
For and on behalf of Grant Thornton Limited
Chartered Accountants
St Helier
Jersey
Date: 30 November 2021
Consolidated Statement of Comprehensive Income
Year to Period to
30 Sept 2021 30 Sept 2020
Note £'000 £'000
Revenues 3 1,469 701
Cost of sales (267) (69)
Operating expenses 4,5 (2,944) (1,047)
Operating loss (1,742) (415)
Operating loss before exceptional items (1,052) (275)
Exceptional items (690) (140)
Operating loss after exceptional item (1,742) (415)
Other income and charges 7 (9) (52)
Loss on ordinary activities before tax (1,751) (467)
Taxation 8 45 5
Loss for the year/ period and total comprehensive (1,706) (462)
loss
Loss per share (basic and diluted) 20 (0.15) (8.13)
Consolidated Statement of Financial Position
30 Sep 2021 30 Sep 2020
Note £'000 £'000
Non-current assets
Intangible assets 9 3,745 989
Property, plant & equipment 10 528 44
Deferred tax 8 89 43
Long term deposit 12 50 50
4,412 1,126
Current assets
Trade, other receivables and prepayments 13 561 307
Cash and cash equivalents 4,921 253
5,482 560
Trade and other payables: amounts falling due within one year 14 (2,032) (316)
Net current assets 3,450 244
Total assets less current liabilities 7,862 1,370
Trade and other payables: amounts falling due after one (424) -
year
Net assets 7,438 1,370
Equity
Stated Capital 16 9,606 9
Share premium reserves - 1,823
Retained loss (2,168) (462)
Total Equity 7,438 1,370
The consolidated financial statements on pages 36 to 59 were approved and
authorised for issue by the Board of Directors on the 30 November 2021 and
were signed on its behalf by:
Mr J M
Clubb
Mr M C Moore
Executive
Chair
CFO and COO
Consolidated Statement of Changes in Equity
Share Share Stated Retained
capital premium capital loss Total
£'000 £'000 £'000 £'000 £'000
At 1 October 2020 9 1,823 - (462) 1,370
New share Capital - 163 553 - 716
Cost of shares issued through IPO - (443) - - (443)
Conversion of shares (9) (1,543) 1,552 - -
Share premium received from IPO - - 7,501 - 7,501
Loss for the year - - - (1,706) (1,706)
At 30 September 2021 - - 9,606 (2,168) 7,438
Share Share Stated Retained
capital premium capital loss Total
£'000 £'000 £'000 £'000 £'000
At 4 July 2019 - - - - -
New share Capital 9 1,823 - - 1,832
Loss for the year - - - (462) (462)
At 30 September 2020 9 1,823 - (462) 1,370
Consolidated Statement of Cash Flows
Year to Period to
30 Sept 2021 30 Sept 2020
Note £'000 £'000
Cash flows from operating activities
Loss for the year before tax (1,751) (467)
Adjustments to cash flows from non-cash items:
Depreciation and amortisation 6 254 113
Finance costs 9 52
Trade and other receivables (net of effects from acquisition of subsidiaries) (107) (289)
Trade and other payables (net of effects from acquisition of subsidiaries) 139 228
Net cash outflow from operating activities (1,456) (363)
Cash flows from investing activities
Acquisition of subsidiary net of cash acquired (1,659) (772)
Acquisition of property, plant and equipment (53) (11)
Net cash outflow from investing activities (1,712) (783)
Cash flows from financing activities
Lease liability paid (57) (36)
Issue of share capital 7,221 9
Share premium on issue of shares - 1,426
Net cash flow from financing activities 7,164 1,399
Net increase in cash and cash equivalents 3,996 253
Cash and cash equivalents at beginning of year/ period 253 -
Cash and cash equivalents from subsidiaries at acquisition 672 -
Cash and cash equivalents at end of year/ period 4,921 253
The consolidated statement of cash flow of the Group for the year ended 30
September 2021 is set out above. The only changes in liabilities other than
from financing cash flows are in respect of leases, details of additions and
disposals of which are given in note 10.
Non-cash items:
During the period, a subsidiary was acquired for a total consideration of
£3,706,227, which comprised of cash consideration of £2,968,727 (£1,309,351
payable post yearend) and share capital exchange of £737,500. The cash flow
of acquisition of subsidiary above is netted off by the cash acquired of
£671,650.
Notes to the Consolidated Financial Statements
1. General information
TEAM plc (the "Company") is a Registered Public Company limited by share
capital incorporated and registered in Jersey, Channel Islands on 4 July 2019.
The registered Company number is 129405. The principal place of business is 6
Caledonia Place, St Helier, Jersey, JE2 3NG.
The principal activity of the Group is the provision of investment management
services.
These financial statements are presented in Pound Sterling (£), rounded to
the nearest thousand (£'000), which is the currency of the primary economic
environment in which the Group operates.
2. Accounting policies
Summary of significant accounting policies and key accounting estimates
The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been consistently
applied to the period presented, unless otherwise stated.
Statement of compliance
These consolidated financial statements have been prepared in accordance with
the requirements of International Financial Reporting Standards (IFRS) as
issued by the International Accounting Standards Board (IASB) and the
requirements of the Companies (Jersey) Law 1991. The Group's consolidated
financial statements have been prepared under the historical cost convention,
with the exception of financial instruments, which are stated in accordance
with IFRS 9 Financial Instruments: recognition and measurement.
The preparation of financial statements in compliance with IFRS requires the
use of certain critical accounting estimates. It also requires The Directors
to exercise judgement in applying the Group's accounting policies. The areas
where significant judgements and estimates have been made in preparing the
financial statements are disclosed in more detail under the critical
accounting judgements policy.
Consolidated financial statements
The consolidated financial statements incorporate the financial statements of
the Company and subsidiary entities controlled by the Company made up to 30
September 2021 (2020: period from 4 July 2019 to 30 September 2020). Control
is achieved where the Company is exposed, or has rights, to variable returns
from its involvement with an investee company and has the ability to affect
those returns through its power over the other entity; power generally arises
from holding a majority of voting rights.
New standards and interpretations not yet adopted
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January
2022:
· Property, Plant and Equipment: Proceeds before Intended Use
(Amendments to IAS 16);
· Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS
1, IFRS 9, IFRS 16 and IAS 41); and
· References to Conceptual Framework (Amendments to IFRS 3).
The Group does not believe that the standards not yet effective, will have a
material impact on the consolidated financial statements.
For annual reporting periods beginning on or after 1 January 2020, the
following are newly effective requirements:
· IAS 1 Presentation of Financial Statements and IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors;
· IFRS 3 Business Combinations (Amendment - Definition of Business);
· Conceptual Framework for Financial Reporting (Revised);
· Covid-19-Related Rent Concessions - Amendment to IFRS 16.
Going concern
After making enquiries, the Directors have formed a judgement, at the time of
approving the financial statements, that there is a reasonable expectation
that the Group has adequate resources to continue in operational existence for
the foreseeable future. For this reason the Directors continue to adopt the
going concern basis in preparing the financial statements.
The Directors have adjusted certain aspects of Group's operations to protect
employees while still meeting customers' needs for their services. The
Directors will continue to monitor the situation closely and it is possible
that we will implement further measures. The Directors have considered the
impact of COVID-19 on the Group and are of the view that it remains a going
concern after revising forecasts for the period to September 2023 and
reviewing the impact of COVID-19 on the working capital of the Group.
Critical accounting estimates and judgements
The Group makes certain estimates and assumptions in the preparation of
financial statements. Estimates and judgements are continually evaluated based
on historical experience and other factors, including expectations of future
events that are believed to be reasonable that best reflects the conditions
and circumstances that exist at the reporting date.
The principal estimates and judgements that could have an effect upon the
Group's financial results are the useful economic lives of property, plant and
equipment, the impairment of trade receivables and intangible assets and the
provision for income and deferred taxes. Further details of these estimates
and judgements are set out in the related accounting policies for these items.
Revenue recognition
The Group has applied IFRS15 - Revenue from Contracts with Customers. IFRS 15
establishes the principles that an entity applies when reporting information
about the nature, amount, timing and uncertainty of revenue and cash flows
from a contract with a customer. Applying IFRS 15, an entity recognises
revenue to depict the transfer of promised services to the customer in an
amount that reflects the consideration to which the entity expects to be
entitled in exchange for those services.
The Group recognises revenue on the transfer of services in accordance with
the contractual terms entered into with clients. Fees and commissions are
received on a variety of different payment terms.
· Commission: Trading and foreign exchange commission income is
recognised on a trade date basis
· Management Fees: Portfolio and investment management, introductory
and sponsor fees are recognised on an accrual basis over time.
· Treasury services: Treasury fees are recognised on an accrual basis
over time.
Segment reporting
IFRS 8 requires that an entity disclose financial and descriptive information
about its reportable segments, which are operating segments or aggregations of
operating segments. Operating segments are identified on the basis of internal
reports that are regularly reviewed by the Board to allocate resources and to
assess performance. Using the Group's internal management reporting as a
starting point the single reporting segment set out in note 3 has been
identified.
Foreign currency transactions and balances
In preparing the financial statements of the Group, transactions in currencies
other than the entity's functional currency (foreign currencies) are recorded
at the rates of exchange prevailing on the dates of the transactions. At each
reporting date, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the balance
sheet date.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items are included in statement of total
comprehensive income in operating expenses.
Tax
The tax expense for the period represents the sum of the tax currently payable
and the deferred tax.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised.
The carrying amount of deferred tax assets are reviewed at each reporting date
and reduced to
the extent that it is no longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be recovered. Deferred tax
is calculated at the tax rates that are expected to apply in the period when
the liability is settled, or the asset is realised.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
Property, plant and equipment
Property, plant and equipment are stated in the Statement of Financial
Position at cost, less any subsequent accumulated depreciation and subsequent
accumulated impairment losses. Cost includes expenditure that is directly
attributable to the acquisition of items.
Fully depreciated assets are retained in the cost and the related accumulated
depreciation until they are removed from service. In the case of disposals,
assets and related depreciation are removed from the financial statements at
the net amount less proceeds from disposal are charged or credited to the
statement of income.
Depreciation
Depreciation is charged so as to write off the cost or valuation of assets
over their useful economic lives, using the straight-line method
Asset
class
Depreciation rate
Computer hardware
5 years
Equipment
4 years
Computer software
3 years
Right of use assets
Over the term of the lease
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method.
The cost of acquisition is measured as the aggregate of the fair values, at
the date of exchange, of the assets given, liabilities incurred or assumed,
and equity instruments issued by the Group in exchange for control of the
acquiree. The acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS 3 are
recognised at their fair value at the acquisition date.
Intangible assets
The value of the customer relationships has been calculated using the excess
earnings approach discounted using the Group's incremental borrowing rate. The
average life of a customer relationship has been set based on the customer
base and represents both the period over which the value of such relationships
have been calculated and the amortisation period of the intangible asset
arising. The Group amortises intangible assets over the following periods:
Customer
relationships
5 -10 years
At each reporting date, the Group reviews the carrying amounts of its
intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any).
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised as an expense immediately.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other
short-term highly liquid investments that are readily convertible to a known
amount of cash and are subject to an
insignificant risk of change in value. Such investments are those with
original maturities of three months or less.
Trade receivables
Trade and other receivables are recognised initially at fair value. They are
subsequently measured at amortised cost using the effective interest method,
less provision for impairment.
A provision for the impairment of trade receivables is based on the lifetime
expected credit loss, based on past and forward-looking information.
Payables
Payables are obligations to pay for goods or services that have been acquired
in the ordinary course of business. Trade and other payables are measured at
initial recognition at fair value and are subsequently measured at amortised
cost using the effective interest rate method
Leases
Under IFRS 16, the Group recognises right-of-use assets and liabilities for
significant leases.
The Group has elected and applied the exemption not to recognise right-of-use
assets and lease liabilities for short-term leases of equipment. The Group
recognises the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
At inception of a contract under IFRS 16, the Group assesses whether a
contract is, or contains a lease. A contract contains a lease if the contract
conveys the right to control the use of an identified asset for a period of
time in exchange for consideration.
The Group recognises a right-to-use asset and lease liability at the lease
commencement date.
The right-to-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 direct costs incurred and an
estimate of costs to restore the underlying asset, less any incentives
received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the end of the lease term.
The lease liability is initially measured at the present value of the lease
payments that are not paid, discounted using the interest rate implicit in the
lease, or if that rate cannot be readily determined, the Group's incremental
borrowing rate.
The lease liability is subsequently measured at amortised cost using the
effective interest rate method.
The Group presents right-of-use assets in property, plant and equipment and
lease liabilities in loans and borrowings in the Statement of Financial
Position.
Financial instruments
The Group has adopted IFRS 9 in respect of financial instruments.
Financial assets, including trade and other receivables and cash and bank
balances, are initially recognised at transaction price, unless the
arrangement constitutes a financing transaction, where the transaction is
measured at the present value of the future receipts discounted at a market
rate of interest. Such assets are subsequently carried at amortised cost using
the effective interest method. At the end of each reporting period financial
assets measured at amortised cost are assessed for lifetime expected credit
losses based on past and forward-looking information. If an asset is impaired
the impairment loss is the difference between the carrying amount and the
present value of the estimated cash flows discounted at the asset's original
effective interest rate. The impairment loss is recognised in the Statement of
Comprehensive Income. If there is a decrease in the impairment loss arising
from an event occurring after the impairment was recognised, the impairment is
reversed. The reversal is such that the current carrying amount does not
exceed what the carrying amount would have been had the impairment not
previously been recognised. The impairment reversal is recognised in the
Statement of Comprehensive Income.
Financial assets are derecognised when (a) the contractual rights to the cash
flows from the asset expire or are settled, or (b) substantially all the risks
and rewards of the ownership of the asset are transferred to another party or
(c) despite having retained some significant risks and rewards of ownership,
control of the asset has been transferred to another party who has the
practical ability to unilaterally sell the asset to an unrelated third party
without imposing additional restrictions.
Basic financial liabilities, including trade and other payables, bank loans,
loans from fellow group companies and preference shares that are classified as
debt, are initially recognised at transaction price, unless the arrangement
constitutes a financing transaction, where the debt instrument is measured at
the present value of the future payments discounted at a market rate of
interest.
Debt instruments are subsequently carried at amortised cost, using the
effective interest rate method.
Trade payables are obligations to pay for goods or services that have been
acquired in the ordinary course of business from suppliers. Accounts payable
are classified as current liabilities if payment is due within one year or
less. If not, they are presented as non-current liabilities. Trade payables
are recognised initially at transaction price and subsequently measured at
amortised cost using the effective interest method. Financial liabilities are
derecognised when the liability is extinguished, that is when the contractual
obligation is discharged, cancelled or expires.
Stated capital
Ordinary shares are classified as equity. Equity instruments are measured at
the fair value of the cash or other resources received or receivable, net of
the direct costs of issuing the equity
instruments. If payment is deferred and the time value of money is material,
the initial measurement is on a present value basis.
Share premium reserves
Share premium reserves represents the excess of the value received for shares
issued over their nominal value less transaction costs and amounts used to
fund bonus issues.
Retained losses
Retained losses represent the cumulative earnings or losses of the Group, less
any dividends declared.
3. Operating Segments
IFRS 8 operating segments are to be identified on the basis of internal
reports about components of Group that are regularly reviewed by management,
including the Chief Finance Officer and the Chief Operating Officer, to
allocate resources to the segments and to assess their performance. The Group
continues to identify a single reportable segment and within this single
reportable segment, total revenue for the year from continuing operations is
as follows;
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Revenue
Fees 1,066 541
Commissions 207 160
Cash and risk management 176 -
Other revenue 20 -
1,469 701
4. Staff costs
The aggregate payroll costs (including directors' remuneration) were as
follows:
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Wages and salaries 1,335 536
1,335 536
The average number of employees (including directors) during the year was 14
(2020: 9).
5. Directors' remuneration
The Directors' remuneration for the year was as follows:
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Executive
J M Clubb 89 58
M C Moore *** 138 -
Non-Executive
L P C Taylor *** 15 -
M M Gray *** 15 -
D J K Turnbull *** 15 -
L Smith * 4 6
L Trevellyan ** 4 7
A Stanton * 2 3
281 74
* resigned 1 March 2021
** resigned 27 January 2021
*** appointed 1 March 2021
Directors' Interests in Management Incentive Plan shares
Total Total
30 Sept 2021 30-Sep-20
Director No. No.
J M Clubb 375 -
M C Moore 438 -
813 -
6. Operating loss
Arrived at after charging:
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Auditors' remuneration - audit fees 27 17
Auditors' remuneration - other services - 21
Costs relating to the admission of the shares 449 140
Amortisation of intangibles 194 70
Depreciation of property, plant and equipment 10 6
Depreciation of right of use asset 50 37
Interest on right of use asset 5 2
7. Interest payable and similar expenditure
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Interest payable - Right of use asset 5 2
Pershing deposit - Fair value 2 50
Other interest payable 2 -
9 52
8. Taxation
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Deferred tax
Deferred tax charge (45) (5)
(45) (5)
The differences are reconciled below
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Loss before tax applicable to financial service companies from date of (458) (96)
acquisition to year end
Tax for financial service companies at 10% (45) (10)
Effect of permanent expense not deductible in determining taxable profit (tax 9 5
loss)
Effect of temporary expense not deductible in determining taxable profit (tax 1 1
loss)
Tax increase from effect of unrelieved tax losses carried forward 35 4
Total tax decrease - -
Deferred tax assets and liabilities
Year to Period to
30 Sep 2021 30 Sep 2020
£'000 £'000
Losses carried forward 86 40
Capital allowances 3 3
89 43
9. Intangible assets
The value of the customer relationships for TEAM Limited has been calculated
using the excess earnings approach discounted using the incremental borrowing
rate of 10.26%. The average life of a customer relationship has been set at
ten years and represents both the period over which the value of such
relationships have been calculated and the amortisation period of the
intangible asset arising. Based on management's assessment, the intangible
assets recoverable value is higher than its carrying amount as at 30 September
2021, hence the intangible asset is not impaired.
On 5 July 2021 TEAM plc acquired the entire share capital of JCAP Limited
("JCAP"), a company incorporated and registered in Jersey, Channel Islands
which provides treasury services. The total consideration paid for JCAP was
£3,706,227 which comprises of cash of £2,968,727 and shares amounting to
£737,500. Included in the Statement of Comprehensive Income are £29,007 in
transaction costs relating to this acquisition. The primary reason for the
acquisition was to enable the Group to provide a cash management service to
its clients and is part of the strategy of the Group.
The value of the customer relationships for JCAP Limited has been calculated
using the excess earnings approach discounted using the weighted average cost
of capital of 14% based on management review. The average life of a customer
relationship has been set at five years and represents both the period over
which the value of such relationships have been calculated and the
amortisation period of the intangible asset arising. Based on management's
assessment, the intangible assets recoverable value is higher than its
carrying amount as at 30 September 2021, hence the intangible asset is not
impaired.
Since being acquired at 5 July 2021, JCAP Limited, has earned a profit of
£80,617 for the three-month period ended 30 September 2021.
Any goodwill arising through business combinations is allocated to individual
assets of its subsidiaries including identified intangible assets. A summary
of the fair values of each major class of consideration in relation to JCAP
Limited is listed in the next table
As at
30 June 2021
£'000
Categorisation of assets: JCAP Limited
Intangible asset: customer contracts 1,759
Goodwill 1,191
Cash and cash equivalents 672
Trade and other receivables 147
Trade and other payables (63)
3,706
Total Total
TEAM JCAP customer intangible
Limited Limited relationships Goodwill assets
£'000 £'000 £'000 £'000 £'000
Cost
At 1 October 2020 1,059 - 1,059 - 1,059
Acquired through business combinations - 1,759 1,759 1,191 2,950
At 30 September 2021 1,059 1,759 2,818 1,191 4,009
Amortisation
At 1 October 2020 70 - 70 - 70
Charge for the year 106 88 194 - 194
At 30 September 2021 176 88 264 - 264
Carrying Amount
At 30 September 2021 883 1,671 2,554 1,191 3,745
At 30 September 2020 989 - 989 - 989
10. Property, plant and equipment
Equipment
Right of use assets and fixtures Computer hardware Computer software Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 October 2020 166 6 26 5 203
Additions 491 33 20 - 544
Disposals (166) (2) (1) (5) (174)
At 30 September 2021 491 37 45 - 573
Depreciation
At 1 October 2020 138 5 12 4 159
Disposals (166) (2) (1) (5) (174)
Transfer category - (3) 3 - 0
Charge for the year 50 4 5 1 60
At 30 September 2021 22 4 19 - 45
Carrying Amount
At 30 September 2021 469 33 26 - 528
At 30 September 2020 28 1 14 1 44
The right-to-use asset is in relation to the property, 6 Caledonia Place, St
Helier, Jersey, JE2 3NG which it currently occupies. The lease term ends on 30
April 2030. The previous lease at Royal Court Chambers, 10 Hill Street, St
Helier, Jersey, JE2 4UA ceased on 30 April 2021.
11. Subsidiary undertakings
Proportion held by Group Proportion held by Subsidiary Proportion held by Group Proportion held by Subsidiary
Undertakings Country of incorporation Holding 30 Sep 2021 30 Sep 2021 30 Sep 2020 30 Sep 2020
TEAM Midco Limited Jersey Ordinary 100% 0% 0% 0%
JCAP Limited Jersey Ordinary 100% 100% 0% 0%
TEAM Limited Jersey Ordinary 100% 100% 100% 0%
TEAM (UK) Management Services Limited U.K. Ordinary 100% 100% 0% 0%
TEAM Nominees Limited Jersey Ordinary 100% 100% 100% 100%
TEAM Midco Limited was incorporated on 11 December 2020 and the loss for the
period ended 30 September 2021 was £55,978. The net assets at the 30
September 2021 were £4,495,774.
The JCAP profit from 5 July 2021 ('date of acquisition') to 30 September 2021
was £81,392 and the net assets at the 30 September 2021 were £837,618.
TEAM Limited loss for the year ended 30 September 2021 was £412,319 (Period
ended 30 September 2020: loss £95,793) and its net asset position as at 30
September 2021 were £854,164 (2020: £544,875).
TEAM (UK) Management Services Limited was incorporated on 18 November 2020 and
the profit for the period ended 30 September 2021 was £nil. The net assets at
the 30 September 2021 were £1.
TEAM Nominees Limited acts as a nominee company, holding client assets in safe
custody on behalf of its parent company. TEAM Nominees Limited does not trade
and its net assets at the 30 September 2021 amounted to £2 (2020: £2).
12. Long-term deposit
On 6 August 2020, the Company entered into a client agreement with Pershing
(Channel Islands) Limited ("Pershing"), whereby Pershing is to provide the
company with the following services:
§ clearing and settlement services in relation to permitted investments;
§ execution of transactions to permitted investments and foreign exchange
transactions in connection with executed trades; and
§ custody and nominee services.
The total amount held by Pershing on a deposit account, on behalf of the
company during the year was £100,000 (2020: £100,000). The client agreement
shall be binding for a period of 7 years from the 6 August 2020 and may be
terminated by way of writing notice of not less than 180 days following the
end of the 7 years' period.
The company has opted to classify its Pershing deposit under the amortised
cost, given that there isn't a fair value methodology to determine the market
value of the deposit.
The present value of the deposit at the 30 September 2021 was £49,490 (2020:
£50,227) based on a discount rate of 14% (2020: 10.26%). The discount rate of
14% is based on the Group's weighted average cost of capital (2020: based on
borrowing rate).
13. Trade and other receivables
30 Sep 2021 30 Sep 2020
£'000 £'000
Due within one year
Trade receivables 330 249
Accrued income 156 -
Prepayments 75 58
561 307
Impairment of receivables
30 Sep 2021 30 Sep 2020
£'000 £'000
Trade receivables - -
At the year ended 30 September 2021 the value of invoices that were past due
was £nil (period ended 30 September 2020: £nil).
14. Trade and other payables
30 Sep 2021 30 Sep 2020
Note £'000 £'000
Due within one year
Lease liability 15 43 34
Payables 158 251
Social security and other taxes 39 31
Other Payables 1,494 -
Accruals 298 -
2,032 316
Due greater than one year
Lease liability 15 424 -
424 -
Included in other payables is £1,493,726 of deferred consideration in
relation to the purchase of JCAP Limited (period ended 30 September 2020:
£nil).
15. Lease liabilities
The amount of interest on the lease liabilities recognised as an expense
during the period was £5,400 (2020: £2,099). TEAM moved premises during the
year and now occupies a property 6 Caledonia Place, St Helier, Jersey, JE2
3NG. The lease repayments are £70,000 per annum. The lease term ends on 30
April 2030.
30 Sep 2021 30 Sep 2020
£'000 £'000
Maturity analysis
Not later than one year 43 34
Between one and five years 145 -
Greater than 5 years 279 -
467 34
16. Stated capital
30 Sep 2021 30 Sep 2020
No. No.
Allotted, called and fully paid shares
Ordinary shares 17,299,795 93,000
30 Sep 2021 30 Sep 2020
£'000 £'000
Allotted, called and fully paid share capital
Opening balance 9 -
Ordinary share capital of £0.10 each - 9
Transferred (9) -
- 9
30 Sep 2021 30 Sep 2020
£'000 £'000
Share Premium
Opening balance 1,823 -
Premium in year 163 1,823
Cost of shares issued through IPO (443) -
Transferred (1,543) -
- 1,823
30 Sep 2021 30 Sep 2020
£'000 £'000
Stated capital
Opening balance - -
Transferred 1,552 -
Share premium received from IPO 7,501 -
New Capital subscribed 553 -
9,606 -
On 8 March 2021 TEAM plc listed on the AIM and at this date the share capital
and share premium was transferred to stated capital. At the date of admission
there were 16,559,334 shares issued of no par value.
17. Related party transactions
Key management personnel are the same as the Directors. Remuneration of the
Directors is disclosed in note 5 to the financial statements.
18. Financial instruments
30 Sep 2021 30 Sept 2020
£'000 £'000
Categorisation of financial instruments
Financial assets measured at amortised cost: 330 249
Trade receivables
Cash and cash equivalents 4,921 253
5,251 502
Financial liabilities measured at amortised cost: (158) (251)
Trade payables
Other payables (1,494) -
Lease liability (467) (31)
(2,119) (282)
19. Capital management
The Group's objectives when managing capital are to safeguard their ability to
continue as a going concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders and maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or
adjust the capital structure, the Group may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell
assets to reduce debt.
In addition, the Company's subsidiary TEAM Limited is a regulated entity in
Jersey, subject to certain capital requirements which the Company needs to
manage. There is a requirement for TEAM Limited to maintain a minimum of
£25,000 paid up share capital and a surplus of adjusted net liquid asset
(ANLA) over the expenditure requirement in a ratio of 110%. The ANLA is
reviewed monthly by management. TEAM Limited has not breached the capital and
ANLA requirement in the current period.
Credit risk management
The maximum exposure to credit risk at the end of the reporting period is the
carrying amount of each class of financial assets mentioned above. Revenue is
generated daily and cash is received in arrears, typically within 30 days from
the quarter end. The Group does not believe there is significant credit risk.
In addition, the financial assets are neither past due or impaired.
Foreign currency risk management
The Group is exposed to immaterial assets which are denominated in foreign
exchange currency, hence the Group is not significantly exposed to foreign
exchange currency risk.
Market risk management
The Group is mainly exposed to market risk in respect of variations in
customer asset values and therefore the management fees that the Group
receives. There has been no material change to the Group's exposure to market
risks or the manner in which it manages and measures the risks.
Interest risk management
The Group has no borrowings exposed to variable interest rates and is
therefore not exposed to interest rate risk in that respect.
Liquidity risk management
The Group manages liquidity risk by maintaining adequate reserves and by
continuously monitoring the capital requirements of the Group. As at 30
September 2021, the surplus of financial assets over financial liabilities was
£3,132,000 (2020: £220,000).
Remaining maturities of financial liabilities:
Less than Between Greater than
one year 2-5 years 5 years Total
£'000 £'000 £'000 £'000
Trade payables 158 - - 158
Other payables 1,494 - - 1,494
Lease liabilities 43 145 279 467
At 30 September 2021 1,695 145 279 2,119
Less than Between Greater than
one year 2-5 years 5 years Total
£'000 £'000 £'000 £'000
Trade payables 251 - - 251
Other payables - - - -
Lease liabilities 31 - - 31
At 30 September 2020 282 - - 282
20. Earnings per share
The Group has calculated the weighted-average number of outstanding ordinary
shares for the period as follows:
Date Number of shares Time weighting Weighted average number of shares
Weighted Average Number of Shares 2021
Balance brought forward 01-Oct-20 93,000 12/12 93,000
Shares issued 19-Oct-20 3,600 12/12 3,600
Shares issued 06-Jan-21 900 9/12 675
Bonus issue of 82 for 1 06-Jan-21 7,897,500 9/12 5,923,125
Shares issued 06-Jan-21 41,000 9/12 30,750
Initial Public Offering 08-Mar-21 8,523,334 7/12 4,971,945
Shares issued 02-Jul-21 740,461 3/12 185,115
17,299,795 12 months 11,208,210
Date Number of shares Time weighting Weighted average number of shares
Weighted Average Number of Shares 2020
Balance brought forward 04-Jul-19 - -
Shares issued 04-Jul-19 100 15/15 100
Shares issued 19-Dec-19 45,800 10/15 30,533
Shares issued 01-Jan-20 41,400 9/15 24,840
Shares issued 01-Jun-20 4,464 4/15 1,190
Shares issued 01-Jul-20 1,236 3/15 247
93,000 15 months 56,910
Loss per share
30 Sep 2021 30 Sep 2020
£'000 £'000
Loss per share
Loss for the financial period and total comprehensive loss (1,706,309) (461,998)
Weighted average number of shares 11,208,210 56,910
(0.15) (8.13)
The Parent Company does not have any contingent issuable shares as at year
end, hence diluted loss per share is the same as the basic loss per share
Adjusted Loss per share
Year to Period to
30 Sep 2021 30 Sept 2020
£'000 £'000
Loss after tax (1,706) (462)
Interest 9 52
Tax (45) (5)
Depreciation 60 43
Amortisation of intangible assets 194 70
EBITDA (1,488) (302)
IPO related expenses 449 140
Acquisition related expenses 241 25
Adjusted EBITDA (798) (137)
30 Sep 2021 30 Sep 2020
£'000 £'000
Adjusted loss per share
Adjusted EBITDA (798,000) (137,000)
Weighted average number of shares 11,208,210 56,910
(0.07) (2.42)
21. Ultimate controlling party
In the opinion of the Directors, there is no single ultimate controlling
party.
22. Events after the statement of financial position date
On 30 November 2021, TEAM exchanged contracts with the shareholders of Omega
Financial Services (Jersey) Limited to acquire 100% of the issued and to be
issued share capital of the business. For further details refer to page 10 and
the section on Omega in the Strategic Report.
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