REG - Team PLC - Final Results
28/03/2024 07:00
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RNS Number : 6037I Team PLC 28 March 2024
28 March 2024
("TEAM " or the "Company ")
Final Results
TEAM plc (AIM: TEAM), the wealth, asset management and complementary financial
services group, is pleased to announce its final audited results for the year
to 30 September 2023.
Financial Highlights
· Revenues increased 151% to £5.3m (FY 22: £2.1m)
· Adjusted EBITDA loss of £0.7m (FY 22: £0.8m)
· Group assets under management / advice up 51% at £833m (FY 22:
£551m)
· £1.9m cash in bank as at 30 September 2023
Acquisitions
· June 2023, acquired Globaleye the international wealth management
business headquartered in Dubai with regulatory licences and approvals in
Singapore, Malaysia, South Africa, and United Arab Emirates.
· December 2023, acquired Neba Wealth, provider of a regulatory and
operational structure for self-employed financial advisors and Neba Singapore,
a promoter of funds and products to international IFA's around the world.
· Completion of strategic acquisitions, and the Company now well-placed
to deliver growth organically and through individual and strategic adviser
team hires
Operational Highlights
· Re-organised the business into three divisions:
o Investment Management - AUM £289m
o Advisory - AUA £365m
o International - AUA £180m
· Continuing to build a stable and scalable investment management
capability in Jersey, alongside acquiring distribution channels in
international growth markets. Predominantly the ex-pat communities around the
world.
· Significant inflows of capital from Advisory clients into MPS
services provided by the Investment Management division
· Group expanding with total number of employees, up from 33, to 87 as
at 30 September 2023. Further meaningful qualified and experienced recruitment
continues.
· Focus on expanding the number of financial advisors in the
International division and targeting ex-pat professional clients working in
Asia, Africa and the Middle East
Current trading
· 28 Feb AUM/A up to £1.0 Billion
· Material re-organisation of International division to create one
branded division with an experienced, regional senior management structure in
place.
The Company also gives notice that its Annual General Meeting ('AGM') will be
held at 6 Caledonia Pl, St Helier, Jersey JE2 3NG, Jersey on Wednesday 17(th)
April 2024 at2.00 pm. The Notice of AGM will be sent to shareholders and the
Notice of AGM and annual report and accounts for 2023 will be made available
to download later today from the Company's website https://www.teamplc.co.uk.
Commenting on the results Mark Clubb, Executive Chairman of TEAM, said:
"This has been another active period for TEAM. We are picking up the pace and
the shape of the business is emerging with Jersey as the central fund
management engine operating out of a highly regulated jurisdiction with a
strong international reputation for fiduciary responsibility. Alongside this
in Jersey, our financial planning advisory hub is combining well and is
positioned to deliver dependable organic growth going forward. The recent
acquisitions of Globaleye and Neba have been combined into the International
Division creating a new platform, branded as Neba Private Clients, aimed at
supporting expatriates of all nationalities, who have very specific wealth
management and advice needs which we specialise in solving. The current
financial year has started well."
For further information, please contact:
Team plc Tel: +44 1534 877210
Mark Clubb / Matthew Moore
Shore Capital (Nominated Advisor & Joint Broker) Tel: +44 20 7408 4090
Tom Griffiths / Iain Sexton (Corporate Advisory)
Guy Wiehahn (Corporate Broking)
Oberon Capital (Joint Broker to TEAM) Tel: +44 20 3179 0500
Michael Seabrook, Adam Pollock, Jessica Cave
Hannam & Partners (Financial Advisor to TEAM) Tel: +44 20 7907 8500
Giles Fitzpatrick / Ernest Bell / Richard Clarke
Novella Communications (Financial PR) Tel: +44 20 3151 7008
Tim Robertson / Safia Colebrook team@novella-comms.com (mailto:team@novella-comms.com)
About TEAM plc
TEAM plc is building a new wealth, asset management and complementary
financial services group. With a focus on Jersey 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, team and individual
hires, collaboration with suitable partners, and by organic growth and
expansion.
TEAM plc has three principal activities, Investment Management, Advisory, and
International.
Investment Management provides discretionary investment management services,
model portfolios, bespoke portfolios and fund management services via fixed
income and equity fund vehicles. Total assets managed as at 30 September 2023
were £289 million (30 September 2022: £233 million).
Advisory - primarily for individuals resident in Jersey, investment
consultancy services to wealthy individuals and trusts and treasury advisory
service for institutions, professional advisers, trustees and high net worth
individuals. Total assets advised on as at 30 September 2023 were £365
million (30 September 2022: £318 million).
International is the Group's financial advisory, fund distribution division
and insurance brokering services covering Africa, the Middle East and Asia.
Total assets advised on as at 30 September 2023 were £180 million (30
September 2022: £nil).
At 30 September 2023, the Group had 87 staff (30 September 2022: 33), with 52
in the UAE, 29 in Jersey, 3 in Singapore and 1 each in the UK, South Africa
and Malaysia (30 September 2022: 32 in Jersey and 1 in the UK). There were
also 10 self-employed advisers, 8 with BVI contracts and 2 in Jersey.
Executive Chairman's Statement
Last year I wrote about "path to progress" and looking forward to "further
progress" which we have delivered. This year it's about "Escape velocity" and
"Direction of travel", terms kindly introduced to me by Mr Andy Brough.
"Escape velocity" is the speed required for an object to escape gravitational
pull and move into space. "Direction of travel" is the momentum of your
propulsion to "escape".
Businesses are very similar to that. Once you break through the barrier of
costs, gaining brand recognition, establishing your place in the market, and
in TEAM's case, breaking barriers of regulatory licences and approvals, then
the spaceship is able to glide with very little energy and it all becomes
about navigation.
While TEAM has broken through many barriers since we listed, we are not yet at
the magical "gliding" point of being cash positive, but we are close to that
"escape velocity". Momentum is accelerating as we become bigger.
When TEAM Plc listed on the AIM market, revenues were £713,000 (June 2022)
and assets under management were £291 million. As at end September 2023,
reported revenues were £5.3 million and assets under management and advice of
£838 million.
Soon we will have the scale to "escape". Since April last year, towards £100
million has come into the Model Portfolio Service ("MPS"). We have all the
basics in place: licences, approvals, advisers, a value proposition, and we
are building a solid track record.
TEAM's Advisory division focuses on financial planning for Jersey Islanders -
to be further strengthened by an upcoming acquisition. Our presence in
Guernsey is soon to be established, headed by new senior recruit, Mark
Chipperfield, alongside a small acquisition.
Jersey is also the base for our cash and asset management capabilities.
Importantly, including our MPS range, available on international platforms and
core to our value proposition.
Our International business is supported by a network of offices, advisers and
regulatory approvals and similarly offers a holistic service, encompassing
pensions, life cover and mortgage advice for locals and expatriates of all
nationalities.
Internationally, we have hubs in Singapore, Kuala Lumpur, Abu Dhabi, Dubai,
Durban, and Nairobi in addition to Jersey. TEAM International is extremely
well-managed by John Beverly who very successfully founded our recent
acquisition, Neba. His ambitions include aggressively growing adviser numbers
in these territories.
Our aim is to be in a great many more places and jurisdictions, including
Europe (MiFid II) and further afield in markets such as the Cayman Islands and
Bermuda. We will expand into new jurisdictions.
Our 'systematic active' investment management process serves our clients well.
Our models will be unitised by the second half of the current financial year
under a Dublin "ManCo" provided by Waystone. The primary motivation behind
launching the TEAM UCITS fund range is to deliver enhanced protection and
outcomes for our clients. There are clear, robust rules around the securities
we can and cannot invest in, a sharp focus on liquidity, diversification
ratios to reduce portfolio risk, and strong risk management and investment
limits. In addition, the guidance around information disclosure is clear.
TEAM Multi Asset Performance, as at 29-Sep-2023
From TEAM's perspective, UCITS funds will significantly broaden our global
opportunity set, allowing us to flex our asset allocation muscles through a
blend of active and passive investments. Most importantly, every client
invested across our UCITS range will receive the same performance outcome
underpinned by our best ideas and over 200 years plus of combined market
expertise.
Our drivers for growth are very simple. The main driver being clients, and
their propensity to save or invest in their futures, principally, retirement.
The aspiration of financial security and a provision for the future is not
going to shrink. I would argue it will grow as self-reliance becomes more
prevalent. And in the emerging world, much of TEAM's world, everyday people in
the ex-pat communities, and not just British, are getting wealthier.
Our model is highly scalable and will benefit from the "network effect." The
more clients and advisers, the more opportunities for interaction, or
communication. There is very little marginal increase in cost for each new
client and the associated revenues. The power of compounding springs to mind.
Our share price performance has been disappointing. As has the AIM or the
London Stock Exchange's market for smaller companies. On a forward
price-to-earnings and price-to-book basis, small-caps trade at a 30% discount
to their 15-year median.
Meanwhile, in the Private Equity sector inflows keep accelerating. Last year
private equity backed entities acquired circa 100 UK based companies in our
sector. This consolidation is expected to continue through 2024.
An estimated $4 trillion is available to be deployed globally in the sector,
almost a third of the entire private capital industry ($13 trillion) with over
40 houses continuing to tap into the highly fragmented wealth sector for more
acquisitions.
Within the industry MPS is growing at double digit rates. Within the confines
of the UK, industry experts expect on-platform MPS AUM to reach £200 billion
by 2026, assuming that growth remains at pre-2022 levels of 25% p.a. TEAM has
a well evolved MPS solution which will be augmented by our Dublin Manco
proposition.
Our board is very clear on how and what we can achieve in the long term. We
are uniquely positioned to succeed. Our story is informed and evidence driven.
We are confident that our competitive position will get even stronger as we
execute on our strategy.
Despite the current share price being disappointing, the state of the markets,
etc, we want to stay listed. This is because in our international markets,
being listed on the London Stock Exchange is valuable. It's about reputation
and the comfort that a high level of governance provides. This helps us with
recruiting talented investment managers and on-going client engagement.
But we are not just a financial "model." We are a culture. We have great
people, and we are continuously challenging our people.
Our strategic aspirations are simple. More advisers serving more clients. We
are confident that we have a business that will continue to grow and that we
will achieve escape velocity. If we achieve that we will create a business
that is valuable to shareholders whilst providing our clients with excellent
service.
I truly thank all my colleagues. My job is to ensure that they have the
resources and training to allow them to demonstrate how great they are to our
clients and to their peers.
To our clients, thank you. Thank you for your support.
To our shareholders, thank you. Your support will be fully rewarded through us
delivering fabulous shareholder value growth. "Escape velocity" is within
touching distance.
I am a substantial shareholder and I have never been more excited and
passionate about our business. I will continue to buy more TEAM shares.
Mr J M Clubb
Executive Chair
27 March 2024
Performance and Strategic Report
Introduction
The Directors present their Strategic Report on the Group for the year ended
30 September 2023.
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 overall strategy is to promote the continued development of the Group into
a leading international wealth and asset management business. It is expected
that the Group's growth will be achieved through:
· an acquisition driven strategy to bring into the Group complementary
offshore and onshore wealth management and financial planning businesses;
· 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 and delivering 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
· client growth through team and selective hires and targeted business
development.
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 also believe that
expansion in the faster growing international markets, rather than the slower
growing UK and Crown Dependencies markets, will also benefit the development
of the Group.
Key Performance Indicators (KPIs)
As TEAM is in the initial stages of delivering the strategic plan for the
business, the Board has yet to set longer term measures for the assessment of
the performance of the business.
The key targets for the Directors are to:
· manage the business with a high standard of corporate governance;
· 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 £500 million 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. A
necessary part of further acquisitions will be raising additional financing,
which is expected to be required for any further acquisitions to be made by
the Group.
These measures, along with revenue, cost, and profitability measures, will be
developed into longer term KPIs for the business, to which future Board
remuneration will be aligned.
Principal 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 and each operating entity 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 monitors 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. Each trading entity conducts a business risk assessment to identify all risks faced, and to put in place effective mitigating controls and procedures. These are reviewed regularly.
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 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.
S.172 Statement
As a Jersey company, TEAM plc does not fall under the UK Companies Act 2006
(the "CA 2006"), but we do follow the requirements under section 172 CA 2006
by which the Directors have a duty to promote the success of the Company for
the benefit of shareholders as a whole. In doing so, the Directors have regard
to the likely consequences of any decision in the long-term; the desirability
of the Company for maintaining a reputation for high standards of business
conduct; and the need to act fairly as between members of the Company.
The Board considers that its primary stakeholders are shareholders, employees,
clients, suppliers and regulators. We set out below how we engage with our
stakeholders:-
Shareholders - contact with our shareholders is through a number of avenues
which include the Annual Report, Annual General Meeting, one-to-one meetings
and telephone conversations. Matters under discussion include strategy and its
execution and generating strong returns.
Employees - the Board engages with employees through a variety of methods,
including regular face-to--face meetings with the management teams of the
operating entities. The executive Directors are more actively engaged with
staff, and are known personally to the management team.
Clients - the Group through its subsidiaries aims to provide investment and
advisory services that meet the needs of its clients. The Group's subsidiary
management teams update the Board on a regular basis on matters of client
service and performance, and new client requirements.
Suppliers - the Company places reliance on external third party providers for
certain activities and services. The selection process and engagement with
these parties is undertaken by senior management to ensure the smooth
operation and delivery of services to the Company.
Regulators - three of the Company's subsidiaries are regulated by the JFSC,
and there are regulated entities operating in Singapore, the UAE, South
Africa, and the Federal Territory of Labuan (in Malaysia). Regular ongoing
communication with the regulators is maintained by the boards of the
respective operating companies and regular management information is supplied
as required. All Board members and key individuals of the regulated entities
are approved in their roles by the respective regulators, as are the
significant shareholders in TEAM plc.
The Performance and Strategic Report on pages 9 - 11 has been approved by the
Board and signed on its behalf.
Mr M C Moore
Chief Financial and Operating Officer
27 March 2024
Financial Overview
A summary of the Group's performance for the financial year is set out below:
Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Revenues 5,323 2,120
Cost of sales (924) (414)
Operating expenses (6,474) (3,271)
Operating loss (2,075) (1,565)
Operating loss before exceptional items (1,853) (1,436)
Exceptional items (222) (129)
Operating loss after exceptional items (2,075) (1,565)
Fair value gains/(losses) on financial instruments 1,680 -
Share award expense (13) -
Other income and charges (35) (23)
Loss before tax (443) (1,588)
Tax (2) 64
Loss after tax (445) (1,524)
Adjusted EBITDA, excluding exceptional items, is set out below:
Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Loss after tax (445) (1,524)
Interest 35 23
Tax 2 (64)
Depreciation 171 81
Amortisation of intangible assets 995 543
EBITDA 758 (941)
Acquisition related expenses* 222 129
Share award expense 13 -
Fair value adjustments (1,680) -
Adjusted EBITDA (687) (812)
Notes:
* These are third party charges relating to the acquisitions of subsidiary
businesses and investigation expenses relating to potential transactions that
did not lead to a transaction.
Financial analysis
The results for the year to 30 September 2023 when compared to the prior year
were as follows:
Revenues
Total revenues rose 151% to £5.3 million (FY 22: £2.1 million) with a
significant increase from the first full year of contribution from the
Advisory businesses acquired in 2022 and four months' contribution from
Globaleye.
Investment Management saw a steady year of operational improvement and
excluding a reversal of revenues incorrectly booked in previous periods (£0.1
million, FY 22: nil), revenues increased 2%. Including the revenue reversal
the headline revenues decreased 7% to £0.95 million (FY 22: £1.02 million).
The model portfolio service for clients was extended to five investment
platforms, and has been successfully adopted by the clients of the Advisory
division.
New business income in the Advisory division was lower than that recorded in
previous years as client activity in Jersey was subdued. This was seen across
the market and follows from the loss in confidence of potential clients in
making longer term financial planning arrangements against the background of
unhelpful macro-economic developments, in particular high interest rates and
high cost inflation. There are signs that activity is starting to return to
more normal levels as equity markets have performed well, inflation is falling
and the expectation is for downwards moves in interest rates.
Our Treasury Services business, which is included in the Advisory division,
recorded revenues in 2023 of £1.0 million (FY 22: £0.8 million). During the
year a settlement was reached with a client for non-payment of fees following
the cancellation of a long-term contract. This led to a one-off settlement of
£0.65 million, less third party expenses, while the ongoing revenues
generated have fallen. This has had a knock on impact on the carrying value of
the business within the group. The Treasury Service business has faced a
more positive market, with the increase in the returns on cash making the
asset class of more interest to investors, though this is not yet turning into
material new client wins. Progress is being seen with new services being
provided to current clients, and while a return to the historic levels of
revenue is some way away, the Treasury Service business has remained
profitable.
Overall Advisory reported revenues of £3.0 million (FY 22: £1.1 million), a
178% increase.
We are now reporting a third division, International, which includes the
Globaleye business acquired on 31 May 2023, and will include the Neba
businesses from their acquisition in December 2023. International has made
revenues for the four months of £1.3 million (FY 22: nil). Our original
assessment of the expected financial performance of the Globaleye Group was in
hindsight too optimistic, and a significant restructuring has taken place to
put the business back on a path to making a profit in its own right, and to
making a significant contribution to the Investment Management division.
Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Investment Management 951 1,025
Advisory 3,040 1,094
International 1,332 -
Other - 1
Total 5,323 2,120
Client assets
Total client assets increased year-on-year by 51% from £551 million to £834
million as at 30 September 2023. This was through the significant flow into
MPS services provided by the Investment Management division from Advisory
clients, material new client wins in the investment consultancy services
within the Advisory division, and the inclusion of the acquired Globaleye
financial planning businesses.
Investment Advisory International * Total
Management
£'m £'m £'m £'m
As at 30 Sept 2022 233** 318 - 551
Net Inflows 44 47 - 91
Other including market performance 12 (1) - 11
From acquired businesses - - 180 180
Total AUM/A at 30 Sept 2023 289 364 180 833
* We have taken the client AUA figure for International from 1 January 2024,
which was the first date on which a reliable estimate could be made of the
underlying client assets.
** The opening balance has been restated to remove funds managed by TEAM that
were solely held by existing clients and earned no additional fees.
Investment Management
The total Investment Management AUM as at 30 September 2023 was £289 million
(30 September 2022: £233 million), a 24% increase on last year.
The most significant change in the year was the flow of client assets into the
MPS. By 30 September 2023 the assets managed with the models were up to £70
million, from £12 million at the start of the year. This was predominantly
driven by the transfer of clients in the Advisory business switching from an
investment advisory service delivered by the Advisory division to the MPS
delivered by the Investment Management division. By 30 September 2023 £64
million of Advisory clients were investing with the Investment Management
division.
Investment performance was above market peers, and the flagship multi-asset
range of solutions delivered steady risk-adjusted returns over the prior
twelve months amidst difficult market conditions.
The KEOX ESG Bonds Fund gained 1.3% in share price during the financial year
2023, while the total assets fell 0.5% to close at £80 million (£80
million). Bond markets were pushed and pulled throughout the period as central
banks warned interest rates will be "higher for longer" to tame inflation but
forward-looking economic data signalled slowing growth will soon enable
policymakers to ease up and change course.
The business is in the process of launching a unitised version of its model
portfolios, which will make the service accessible to investors and savers in
products that do not allow investments to be held via the five investment
platforms on which TEAM now runs the models. These are expected to be launched
in H2 2024 and be of most interest to the clients of the International
division.
Advisory
Two financial advice businesses were acquired in July and August 2022, and
recorded their first full year of contribution to 30 September 2023. During
the year the business has been addressing known historic issues with Omega's
corporate governance controls, policies and procedures and has made good
progress in addressing the historic deficiencies. The business continues to be
under review by the Jersey regulator, and further work is required to close
down this chapter. The integration of the two advice businesses is now
complete, with both operating from the same premises, with the same policies
and procedures, under the Concentric Wealth brand. It is the intent of the
Group to simplify its corporate structure to reduce the ongoing operational
challenges of running separate legal and regulated entities, which will enable
further cost cutting.
International
The market for international financial advisory services in the Middle East,
SE Asia and Africa remain strong, with a significantly higher growth rate
expected when compared to the UK and Europe.
TEAM International is targeting professional clients seeking high-end advisory
and private banking services, without the over-encumbering minimum asset
required by the private banks. Many of these potential clients have portfolios
of between £1-5 million yet are unable to be onboarded by the private banks
as they do not meet their minimum criteria. This presents an opportunity for
TEAM International.
In December 2024, after the financial year end, TEAM acquired Neba Financial
Solutions Limited in Labuan and Neba Financial Solutions Private Limited in
Singapore. The branding used - Neba Private Clients - is being adopted across
the Globaleye entities. It is expected that the TEAM model portfolios,
especially the unitized version, will lead to significant opportunities for
the distribution of the TEAM funds and make a material contribution to the
profitability of the Investment Management division.
Expenses
Total expenses rose by 101% to £7.4 million (FY 22: £3.6 million) with the
inclusion of the two Advisory businesses for a full year (two months in 2022)
and Globaleye for four months (nil for 2022).
Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Cost of sales 924 414
Staff costs 3,359 1,678
Non-staff costs 3,337 1,722
Adjusted total costs 7,620 3,814
Acquisition related expenses (222) (129)
Total 7,398 3,685
As at 30 September 2023, the total staff in TEAM was 87, up from 33 at 30
September 2022, and staff costs were up 99% to £3.3 million (FY 22: £1.7
million). Cost of sales was 123% higher at £0.9 million (FY 22: £0.4
million), a result of the commissions paid to the self-employed advisors in
Globaleye, which is a feature of the operating model for that business.
Non-staff costs were up 96% at £3.3 million (30 September 2022 £1.7
million), reflecting the full year contributions from Advisory, high inflation
in services seen in Jersey, and the costs from Globaleye for the four months
included.
Adjustments to EBITDA
Acquisition related expenses were £222k (FY 22:: £129k) and included the
legal, regulatory and financial advice fees relating to the acquisition of
Globaleye, and from the cancelled acquisition of Thornton Associates Limited.
Share award expenses were £13k (30 September 2022: £nil) and reflect the
cost of equity to be issued to the executive directors which vested during the
period.
Fair value adjustments were a gain of £1,680k (30 September 2022: £nil),
being the reduction in the consideration payable to vending shareholders of
certain acquired subsidiaries (see note 15).
Profits
The adjusted EBITDA was a loss of £0.4 million (FY 22: loss £0.8 million), an improvement of 50%. The most significant elements were 1) the inclusion of the losses in Globaleye (£0.1 million), 2) the client settlement at JCAP (revenue of £0.7 million) and 3) the contributions from the full year of ownership of the financial advice businesses in Jersey.
Tax
Regulated financial services businesses in Jersey pay a flat corporation tax
rate of 10%. The Treasury Services business is not regulated and has a nil tax
rate. The Globaleye entities are subject to tax rates of 17% (Singapore), 3%
(Labuan), between 7 and 27%% (South Africa), and 0% (UAE and BVI). The
reduction in the tax recovery in the year reflects the group relief now
available for current period losses from the Investment Management division to
the Advisory division. The deferred tax asset of £152k (FY 22: £156k) is
expected to be utilised against the future profits generated in the Investment
Management Division.
Earnings per share
The headline loss per share decreased to 2.0p from 7.9p, a 75% reduction. The
adjusted loss per share decreased 26% to 3.1p from 4.2p.
Cash Flows
Cash increased to £1.9 million (30 September 2022: £1.7 million) as
operating losses of £0.4 million (FY 22: £1.3 million) were incurred, cash
balances of £0.9 million were acquired in Globaleye (FY 22: £0.6 million),
and the loan note of £0.4 million was issued. There were minimal deferred
cash payments made in the period relating to acquisitions of £20k (FY 22:
£1.5 million), while the cash spent on acquisitions in the period was nil
(FY22: £3.5 million).
Statement of Financial Position
Net assets decreased by 6% to £8.2 million (FY 22: £8.7 million), following
the acquisition of the Globaleye companies and no issue of new shares (FY 22:
£2.7 million) less the £0.4 million of losses (FY 22: £1.5 million).
Going concern
The group incurred a consolidated net loss of £445,000 during the year ended
30 September 2023 and, as of that date, its consolidated current liabilities
exceeded its consolidated current assets by £3,319,000. This indicates that
the company may not be a going concern.
The Directors have prepared financial projections along with sensitivity
analyses of reasonably plausible alternative outcomes, covering clients and
assets, cost inflation, the take up of Group services and the potential
acquisition of further businesses. The forecasts demonstrate that the
Directors believe that the Group will require additional financial resources
to meet the cash requirements of the Group before it is expected to reach a
cash flow positive state. The Board therefore is actively managing the cost
base of the Group, curtailing expenditure on further acquisitions, it is
considering options to improve the current revenue yields earned, and
preparing alternatives to raise further funding as and when required,
including within the next 12 months. This could include further use of loan
notes, and the potential for a targeted equity raise from the current
shareholder base.
Taken together, while the plans to mitigate the cash required, and the plans
to raise further funding, are both not certain, they do give the Board
sufficient confidence to consider the going concern basis to be appropriate
for the accounts.
Dividends
The Board does not propose to pay a dividend in respect of the financial year ended 30 September 2023 (FY 22: £nil).
Mr M C Moore
CFO and COO
27 March 2024
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, 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, 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
obtaining 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 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 can 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, discussing 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 Chairman
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 Chairman 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
is comprised 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 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 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 present. 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 or Chairman 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 always having a majority of independent
Directors.
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. If Directors are unable to attend a meeting, their comments on
papers to be considered at the meeting will be discussed in advance with the
Chair 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 Chair.
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 took place during the period. In
addition, the Non-executive Directors met, without the Chair present, to
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 its stakeholders,
including shareholders, to enable all interested parties to come to informed
decisions about the Company.
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 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 its website.
By order of the Board
Mr M C Moore
CFO and COO
27 March 2024
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. 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 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 present. 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 or Chairman 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 always having a majority of independent
Directors.
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 Report
The Audit and Risk Committee is chaired by Philip Taylor. Its other members
are Michael Gray and David Turnbull, with Matthew 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 received and reviewed reports from the Company's management and
auditor for 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
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 also discusses Audit & Risk matters at meetings of the Board.
The Committee has unrestricted access to the Company's auditor.
The principal areas of focus during the year included the following items:
1. Reviewed the terms of reference for the Committee to monitor the
Committee's compliance.
2. Reviewed the internal control and compliance procedures, including
monitoring of progress on matters requiring improvement.
3. Reviewed the Interim and Annual Report and financial statements.
4. Approved the management representation letter.
5. Review of the financial projections and related funding requirements of the
Group.
6. Review of the independence of the auditor, their fees and engagement
letter.
8. The Committee discussed the Audit Plan, the auditor's report and
significant issues arising during the audit with the auditor.
9. Reviewed the terms of the acquisition of Globaleye and the associated risks
with the Executive Directors. We received assurance that the risks could be
appropriately mitigated.
Appointment of the external auditor
The Committee reviewed the arrangements for the audit of the annual accounts
and decided to request expressions of interest from several audit firms.
Following a review the Committee recommended to the board that Moore Stephens
Audit & Assurance (Jersey) Limited be appointed in their place, and the
board followed that recommendation.
Role of the external auditor
The Committee monitored the relationship with the external auditor to ensure
their independence and objectivity. Based on that assessment, the Committee
recommends to the Board the re-appointment of Moore Stephens Audit &
Assurance (Jersey) Limited. In assessing independence and objectivity, the
Committee considered the level and nature of services provided by Moore
Stephens Audit & Assurance (Jersey) Limited as well as confirmation from
them that they have remained independent within the meaning of the IESBA Code
of Ethics.
The auditor did not carry out any non-audit services during the year.
Audit process
The external auditor prepared an audit plan for the Committee's review. The
audit plan set out the scope of the audit, areas to be tested and audit
timetable. Following the audit, the auditor presented their findings to the
Audit Committee.
No major areas of concern were highlighted by the auditor during the year.
The principal matters discussed with the audit Committee were the valuation
of and accounting for intangible assets and the going concern basis for the
preparation of the accounts.
Internal audit
The Group assessed the need for an internal audit function and considered that
in the light of the existing control environment and the financial position of
the business there is currently no requirement for a separate internal audit
function.
Mr L P C Taylor
Chairman of the Audit & Risk Committee
27 March 2024
Nomination Report
The Nomination Committee is chaired by David Turnbull and its other members
are Philip Taylor, Michael Gray and Mark Clubb. Matthew Moore acts as its
secretary.
The Nomination Committee assists the Board in discharging its responsibilities
relating to the composition of the Board. It is responsible for, and
evaluates, 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, considering the skills and expertise that will
be beneficial to the Board in the future.
The Committee met three times during the year. Each time it reviewed the terms
of reference, discussed the individual and collective suitability of Board
members, whether the Board had operated effectively, the Executive had
performed, and the non-executives had provided appropriate challenge and
guidance. It was agreed that the size of the Board was 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 and, as such,
no changes were necessary to its membership although this should be reviewed
regularly as the Group grows. Succession planning was also discussed at each
meeting. The Committee noted that it considers the diversity or otherwise of
the Board and will continue to do so.
There was a focus in the October 2022 meeting on management responsibility and
accountability for subsidiary businesses. The acquisition strategy of the
Group has been very active and there are challenges associated with it, not
least in some overseas territories where the standards of management,
transparency, record keeping and corporate governance are not necessarily
commensurate with those in more developed financial centres. These challenges,
the organisation of the Group and management responsibilities within it were
specifically discussed and reviewed in the August 2023 meeting.
Mr D J K Turnbull
Chairman of the Nomination Committee
27 March 2024
Remuneration Report
The Directors present the Directors' Remuneration Report (the "Remuneration
Report") for the financial year ended 30 September 2023.
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 the Non-Executive
Directors, chaired by Mr 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. The Committee meets at least twice a year.
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, considering 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 Committee takes the remuneration and employment conditions of its broader
employee population into account when setting the remuneration policy for its
Executive Directors. The Committee also considers its responsibilities to its
shareholders and wider economic environment and market developments.
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,
cognisant of 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, considering 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
The Group does not have any options nor an Employee Share Ownership Trust
(ESOT).
Other Employee Benefits
Depending on the terms of their contract, the Executive Directors 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 thirty-six 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 ("MIP")
On 12 May 2022. the Company set up the TEAM plc MIP to ensure selected
employees of the Company are well motivated and identify closely with the
success of the Group. There were no changes to the Directors' interests in the
MIP in the period. The exercise period for the MIP commences on 11 May 2024
and remains open for two years. A new MIP is expected to be put in place for
the period commencing after 11 May 2024.
Directors' Emoluments
The remuneration of each Director as listed on page 58, in the Company
Information section, during the year ended 30 September 2023 is set out below:
Pension Pension
Contribution Contribution
Year ended Year ended year ended Year ended
Salary Benefits Bonus 30 Sept 2023 30 Sept 2022 30 Sept 2023 30 Sept 2022
£ £ £ £ £ £ £
Executive
J M Clubb 132,500 5,414 25,000 162,914 142,072 10,867 9,500
M Moore 182,500 4,505 100,000 287,005 208,468 15,200 12,792
Non-Executive
L P C Taylor 25,000 - - 25,000 25,000 - -
M M Gray 25,000 - - 25,000 25,000 - -
D J K Turnbull 25,000 - - 25,000 25,000 -
390,000 9,919 125,000 524,919 425,540 26,067 22,292
The highest paid Director for 2023 was Mr M C Moore receiving emoluments of
£287,005 (30 September 2022: M C Moore £208,468). For the period to
September 2023, Mr Moore was awarded a bonus of £40,000 payable in cash, and
£60,000 in new Ordinary TEAM shares, vesting over the following three years.
The costs of the share award will be reflected in the Consolidated Statement
of Comprehensive Income as they vest.
Mr J M Clubb has a salary of £250,000, of which he has elected to waive
£115,000, earning an effective salary of £135,000. The amount of salary
waived decreased by £10,000 over the year to 2023 and is expected to decrease
as the business makes progress towards generating a positive cash flow. From
April 2024 Mr Clubb's effective salary will rise to £165,000, as the amount
waived falls to £85,000. Mr Clubb also waived a share award bonus of
£100,000 for the year to 30 September 2023, while accepting a cash bonus of
£25,000. The costs of the share award will be reflected in the Consolidated
Statement of Comprehensive Income as they vest.
The intention is that when the business moves into a positive cash flow
position then the sums waived will be caught up. In the past two years Mr
Clubb has waived total remuneration of £340,000.
Directors' Interests in Management Incentive Plan shares
30 Sept 2023 30-Sep-22
Director No. No.
M C Moore 650 650
650 650
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.
Directors' Report for the year ended 30 September 2023
Introduction
The Directors present their report and the consolidated financial statements
for TEAM plc (the "Company") and its subsidiaries (the "Group") for the year
ended 30 September 2023.
Results
The financial statements are set out on pages 44 to 72.
Dividend
The Directors do not propose to pay a dividend for the year ended 30 September
2023 (30 September 2022: £nil).
Capital Structure
Full details of the issued share capital, along with movements during the
year, are set out in note 17 on page 68.
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' Shareholdings
The Directors who held office during the year and their interest in the shares
of the Company were as follows:
30 Sept 2023 30 Sept 2022
Appointed Number of shares Number of shares
J M Clubb 4 July 2019 3,838,000 3,768,750
M C Moore* 1 March 2021 - -
M M Gray 1 March 2021 47,727 47,727
D J K Turnbull 1 March 2021 33,645 33,645
L P C Taylor 1 March 2021 33,645 33,645
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 28. *Mr Moore holds 650 shares in the Management
Incentive Plan.
Major Shareholdings
At the date of publication of this report, the Company had been notified of
the following shareholdings of 3% or more of its issued share capital:
Ordinary shares % of issued share capital
Strategic Venture Partners Europe 6,208,667 20.69
Mark Clubb 3,838,000 12.79
Schroders plc 2,069,284 6.90
Canaccord Genuity (Marlborough Funds) 1,706,626 5.69
Metropolitan Guarantee Limited 763,502 3.47
Political Contributions
The Group and Company did not make any political donations or incur any
political expenditure during the year (30 September 2022: nil)
Going concern
The group incurred a consolidated net loss of £445,000 during the year ended
30 September 2023 and, as of that date, its consolidated current liabilities
exceeded its consolidated current assets by £3,319,000. This indicates that
the company may not be a going concern.
The Directors have prepared financial projections along with sensitivity
analyses of reasonably plausible alternative outcomes, covering clients and
assets, cost inflation, the take up of Group services and the potential
acquisition of further businesses. The forecasts demonstrate that the
Directors believe that the Group will require additional financial resources
to meet the cash requirements of the Group before it is expected to reach a
cash flow positive state. The Board therefore is actively managing the cost
base of the Group, curtailing expenditure on further acquisitions, it is
considering options to improve the current revenue yields earned, and
preparing alternatives to raise further funding as and when required,
including within the next 12 months. This could include further use of loan
notes, and the potential for a targeted equity raise from the current
shareholder base.
Taken together, while the plans to mitigate the cash required, and the plans
to raise further funding, are both not certain, they do give the Board
sufficient confidence to consider the going concern basis to be appropriate
for the accounts.
Likely future developments
The Directors are focused on bringing the Group to a cashflow positive
position and to be able to pay a dividend to shareholders over the medium
term. In the early years of the TEAM business plan, this was not expected, nor
has it been the outcome. This was due to the startup costs associated with the
business plan, the costs associated with running a plc entity with a listing
on the AIM market, together with the losses made in the investment management
division. The acquisitions made or arranged by the Group, along with a
pipeline of hiring revenue generating individuals and earnings enhancing
acquisitions, together with the expected delivery of revenue and cost
synergies from the acquired subsidiaries, are expected to achieve this aim.
Events after the Reporting Period
On 28 September 2023, TEAM announced the issue of a loan note which at the
year end had raised £425,000. As of the date of these accounts the loan
note is now at £1,135,000.
On 12 December 2023 TEAM announced the acquisition of two businesses, Neba
Financial Solutions Limited (Neba Wealth) and Neba Financial Solutions Private
Limited (Neba Singapore) for a total initial consideration of £1.181 million,
satisfied by the issue by the Company of a loan note which is convertible into
new TEAM shares.
On 27 December 2023 TEAM plc announced that it had exchanged contracts to
acquire the entire issued share capital of Homebuyer Financial Services
Limited, a Jersey based financial planning business, for total consideration
of £2.4 million payable in cash. The acquisition is subject to various
conditions, including fundraising by TEAM plc. As at the date of signing, the
process is continuing.
On 27 December 2023 TEAM announced that Thornton's management team had decided
to remain independent, and TEAM agreed to an amicable cancellation of the
proposed acquisition.
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 being posted separately.
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 consolidated
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 situation
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 the 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 the Group's auditor is aware of that
information.
This report was approved by the Board on 27 March 2023 and signed on its
behalf by:
Mr J M
Clubb
Mr M C Moore
Executive
Chair
CFO and COO
Directors' Biographies
Jonathan Mark Gordon Clubb
EXECUTIVE CHAIRMAN
Mark began his 27 year career in investment banking at Hoare Govett and has
held various senior management roles at UBS Philips and Drew and BZW (latterly
Credit Suisse First Boston). In 1997 Mark, together with six partners, founded
London-based investment banking boutique, Altium Capital Partners. Following a
management buyout of Altium Capital Partners in 2008, Mark returned to Jersey
and has spent the last 12 years in investment management, including at private
client stockbroker, Collins Stewart, later acquired by Canaccord Genuity Inc.
Matthew Charles Moore
CHIEF FINANCIAL OFFICER & CHIEF OPERATING OFFICER
Matthew is a chartered accountant with a wealth of experience in senior leadership and financial roles, having been CFO at Close Investments, CFO and COO at Origen Financial Services (an Aegon Group company) and CFO and COO at Ascot Lloyd, a vertically
integrated UK wealth management firm founded by Oaktree, a leading private equity investor. Matthew adds significant acquisition and integration expertise to TEAM. He was responsible for acquisitions at Bellpenny, and subsequently Ascot Lloyd, and
previously worked in the acquisitions team at Close Wealth Management, prior to which he held various roles in M&A at Commerzbank Securities and ING Barings.
Louis Philip Chetwynd Taylor
INDEPENDENT NON-EXECUTIVE DIRECTOR & SENIOR INDEPENDENT DIRECTOR
Philip has over 40 years' experience in the finance industry, beginning his
career at PwC in London. Philip is currently a lay member of the States of
Jersey Public Accounts Committee and as a Director of a property development
company. Philip was the Senior Partner of PwC Channel Islands and a Global
Leader of the PwC Quality Assurance Programme. Philip has previously served as
Chairman of the States of Jersey Treasury Advisory Company a Commissioner of
the JFSC, as a Member of the Conduct and Case Management Committees of the UK
Financial Reporting Council, as a Member of Jersey Financial Services Advisory
Board and as Director of number of listed and other financial services
companies.
David James Ker Turnbull
INDEPENDENT NON-EXECUTIVE DIRECTOR
He is currently Chairman of Fiduciary Settlements Ltd and a Non-Executive
Director of mnAI Data Solutions Ltd.
David was previously a Managing Director at Salomon Brothers (now Citigroup)
where he held various senior positions within the firm including Global
Co-Head of Japanese Equities and Global Head of European Equities. David also
served on the European Management Committee, Global Equity Committee and
Global Business Practices Committee. Prior to Salomon Brothers, David worked
for Rowe and Pitman in London and Tokyo. In 1999 David cofounded and was Chief
Operating Officer of Antfactory, a global technology investment firm; in
addition, he founded and acted as Chief Executive of its Japanese subsidiary,
Ant Capital.
From 2002 to 2010, David was a fund manager focused on Asia, first at Prodigy
Capital, where he was a Founding Partner, and then at Morant Wright. David is
a former Senior Advisor to the Industrial and Commercial Bank of China, has
advised several other companies, particularly in the financial sector, and
served on several company boards including Whittard of Chelsea.
Michael Mckenzie Gray
INDEPENDENT NON-EXECUTIVE DIRECTOR
Michael has over 20 years' management experience in banking. Michael founded
MMG Consulting Ltd in 2015, an advisory consultancy firm based in Jersey.
Currently, Michael serves as a non-executive director for Triton Investment
Management Limited (a Swedish private equity Group), GCP Infrastructure
Investments Limited (a FTSE 250 listed company), J-Star Jersey Company Limited
(a Japanese private equity Group), Foresight Enterprise VCT plc (a listed
venture capital fund), JTC plc (a FTSE 250 listed trust and corporate services
company) and EPE Special Opportunities Limited.
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF TEAM PLC
Opinion
We have audited the consolidated financial statements of Team plc and its
subsidiaries (the "Group") for the year ended 30 September 2023 which comprise
the consolidated statement of financial position, the consolidated statement
of comprehensive income, the consolidated statement of changes in equity, the
consolidated statement of cash flows and notes to the consolidated financial
statements including significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRS) as adopted by the
International Accounting 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 2023 and of its loss for the year then ended;
· have been properly prepared in accordance with IFRS as adopted by
the IASB; and
· have been prepared in accordance with the requirements of the
Companies (Jersey) Law 1991.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the consolidated financial statements section of our report. We are
independent of the Group in accordance with the ethical requirements that are
relevant to our audit of the consolidated financial statements in Jersey,
including the FRC's Ethical Standard as applied to listed entities, and we
have fulfilled our ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
An overview of the scope of our audit
Whilst planning our audit engagement, we determined materiality and assessed
the risks of material misstatement in the consolidated financial statements
including the consideration of where Directors made subjective judgements, for
example, in respect of the assumptions that underlie significant accounting
estimates and their assessment of future events that are inherently
uncertain. We tailored the scope of our audit in order to perform sufficient
work to enable us to express an opinion on the consolidated financial
statements as a whole taking into account the Group, its accounting processes
and controls and the industry in which it operates.
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 and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the consolidated
financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to
be communicated in our report.
Key Audit Matter How the matter was addressed in the audit
Going Concern Key Observations
The Company's management has prepared the Group's consolidated financial Our work performed and our conclusions in respect of going concern have been
statements on the assumption that the Company and Group is a going concern. detailed in the 'Material uncertainty related to going concern section' of our
The Group has been loss making since inception, has an accumulated deficit audit report.
balance of £4.1 million and a net current liability position of £3.3 million
as at the reporting date, there is a risk that management's use of the going
concern assumption in preparing the financial statements is not appropriate.
Risk of fraud in revenue recognition Our main audit procedures in respect of revenue recognition were as follows:
§ We obtained an understanding of the policies and procedures applied to
revenue recognition, as well as compliance therewith, including an analysis of
Material misstatement due to fraudulent financial reporting relating to the effectiveness of the design and implementation of controls related to
revenue recognition often results from an overstatement of revenues through, revenue recognition employed by the Group;
for example, premature revenue recognition or recording fictitious revenues.
It may also result from an understatement of revenues through, for example, § We performed sample-based tests of details over the accuracy and occurrence
improperly shifting revenues to a later period. of sales during the year specially responsive to the risk of fraud in revenue
occurrence;
§ We performed substantive analytical procedures to test reasonableness and
The Group's main source of income is the fees and commissions earned from the completeness of recorded revenue;
provision of investment management and other related services.
§ We performed completeness testing by selecting a sample of
contracts/invoices and tracing back to revenue listing (i.e. floor to list);
and
We have not become aware of opportunities and pressure which could lead us to
believe that potential misstatements may arise as a result of fraudulent § We reviewed the disclosures related to revenue included in the notes to the
financial reporting. consolidated financial statements.
Key Observations
We did not identify any material issues arising from the procedures performed
in this area. We concluded that the Group's accounting for revenue
recognition, and the related disclosures, were in accordance with the
requirements of IFRS.
Risk of Improper Accounting for the Acquisition of Globaleye Group Our main audit procedures were as follows:
During the year ended 30 September 2023, the Group has completed a major · We obtained understanding of the process and controls around the
acquisition of the Globaleye Group. There is a risk that this acquisition was preparation, review and accounting for acquisitions;
not accounted for in accordance with the requirements of IFRS 3 Business
combinations. · We reviewed the sale and purchase agreement relevant to the
acquisition of the Globaleye Group;
· We verified the valuation of the assets and liabilities as at
acquisition date of 31 May 2023;
· We traced the cash consideration paid, if any, to the bank
statements;
· We traced the equity consideration paid, if any, to the relevant
supporting documents (e.g. share register); and,
· We assessed the reasonableness of the management's inputs,
assumptions and estimates regarding the intangible asset valuation calculation
arising from the acquisition
Key Observations
We did not identify any material issues arising from the procedures performed
in this area. We concluded that the accounting for the acquisition of the
Globaleye Group and the relevant disclosures in the financial statements were
in accordance with the requirements of IFRS.
Risk of Impairment of Intangible Assets, including Goodwill Our main audit procedures were as follows:
The acquisitions made by the Group (including those completed in prior · We obtained understanding of the process and controls around the
periods) have generated a significant balance of intangible assets i.e, goodwill valuation and impairment review process;
customer relationships and goodwill, being recognised on the consolidated
statement of financial position. · We assessed the reasonableness of the inputs and assumptions
applied by the management in preparing the relevant valuation workings;
· We reviewed the mathematical accuracy of the calculations
As required by IFRS, Management performs an annual review of the valuation of performed by management; and,
intangible assets, including goodwill on a cash-generating unit ("CGU") basis
including the determination of any impairment to be recognised for the year. A · We perform an evaluation of the key assumptions used in the
risk of material misstatement arises due to the significant judgments and impairment assessment calculation in order to assess whether there are an
estimations applied by the management in this process. indications of management bias
Key Observations
We did not identify any material issues arising from the procedures performed
in this area. We concluded that management's assessment of the impairment of
intangible assets including goodwill was appropriate and in accordance with
the requirements of IFRS.
Our application of materiality
We define materiality as the magnitude of misstatements in the consolidated
financial statements that makes it probable that the economic decisions of a
reasonably knowledgeable user of the financial statements would be changed or
influenced. We use materiality to determine the scope of our audit and the
nature, timing and extent of our audit procedures and to evaluate the results
of that work. Materiality was determined as follows:
Consolidated financial statements as a whole:
Materiality was calculated at £251,300 based on a calculation of 3.5% of
preliminary net assets. This benchmark is considered the most appropriate
because, based on our professional judgement, we considered that this is the
primary measure used by the users of the consolidated financial statements in
assessing the performance and value of the Group.
Performance materiality was set at 60% of materiality and was calculated at
£150,780.
Communication of misstatements to the Board:
We agreed with the Directors that any misstatement above £12,565 identified
during our audit will be reported to the Audit Committee, together with any
misstatement below that threshold that, in our view, warranted reporting on
qualitative grounds.
As noted above, the materiality levels are calculated based upon preliminary
net assets. We have performed a reassessment of materiality based on the final
net asset balance and have concluded that the materiality levels remain
appropriate at the conclusion of the audit as these are more conservative.
Material uncertainty related to going concern
We draw attention to note 2, in the consolidated financial statements, which
indicates that the consolidated financial statements have been prepared on a
going concern basis but with a material uncertainty related to going concern.
This assessment has taken into consideration all available information for the
foreseeable future, in particular for the 12 months from the date of approval
of these consolidated financial statements. This assessment included
consideration of Group's profit and loss projections and budget, and the
ability of the Group to raise further financing. These conditions, along with
other matters as set in note 2 to the consolidated financial statements,
indicate that a material uncertainty exists that may cast significant doubt on
the Group's ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
In auditing the financial statements, we have concluded that the use of the
going concern basis of accounting in the preparation of the financial
statements is appropriate. In assessing the appropriateness of the going
concern assumption used in preparing the financial statements, our procedures
included, amongst others:
§ A critical assessment of management's assessment of going concern and the
basis for their assertion that the going concern basis of preparation of the
financial statements was appropriate;
§ A critical assessment of the assumptions underlying the budget/cash flow
forecast for the year to September 2027; and
§ A critical assessment of post year-end trading, credit facilities and other
relevant information.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Other information
The Directors are responsible for the other information. The other information
comprises the information included in the annual report set out on page 3 to
36 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 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 identified above when it
becomes available 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 we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement of the consolidated financial statements or a material
misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Group and its environment
which we obtained during the course of the audit, we have not identified
material misstatements in the Directors' report.
We have nothing to report in respect of the following matters where the
Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:
· Adequate accounting records have not been kept; or
· returns adequate for our audit have not been received from
branches not visited by us; or
· the financial statements are not in agreement with the accounting
records and returns; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors for the consolidated financial statements
As explained more fully in the Statement of Directors' Responsibilities on
page 35, the Directors are responsible for the preparation of the consolidated
financial statements which give a true and fair view, 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 Group'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 (UK)
will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial
statements.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
The objectives of our audit, in respect to fraud, are; to identify and assess
the risks of material misstatement of the financial statements due to fraud;
to obtain sufficient appropriate audit evidence regarding the assessed risks
of material misstatement due to fraud, through designing and implementing
appropriate responses; and to respond appropriately to fraud or suspected
fraud identified during the audit. However, the primary responsibility for the
prevention and detection of fraud rests with both those charged with
governance of the entity and management.
Our approach was as follows:
• We obtained an understanding of the legal and regulatory frameworks that
are applicable to the Group and determined that the most significant are those
that relate to the Companies (Jersey) Law 1991, IFRS and the AIM Rules for
Companies. We also reviewed the laws and regulations applicable to the Group
that have an indirect impact on the financial statements.
• We gained an understanding of how the Group is complying with Companies
(Jersey) Law 1991, IFRS and the AIM Rules for Companies by making inquiries of
management. We corroborated our inquiries through our review of minutes of
Board of Directors meetings and the review of various correspondence examined
in the context of our audit and noted that there was no contradictory
evidence.
• We assessed the susceptibility of the Group's financial statements to
material misstatement, including how fraud might occur, by meeting with
management to understand where they considered there was susceptibility to
fraud. We also considered performance targets and their propensity to
influence management to manage earnings and revenue by overriding internal
controls. We performed specific procedures to respond to the fraud risk of
inappropriate revenue recognition. Our procedures also included testing a
risk-based sample of journal entries that may have been posted with the
intention of overriding internal controls to manipulate earnings. These
procedures were designed to provide reasonable assurance that the financial
statements were free from fraud or error.
• Based on this understanding, we designed specific appropriate audit
procedures to identify instances of non-compliance with laws and regulations.
This included making enquiries of management and those charged with governance
and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are
less likely to become aware of instances of non-compliance with laws and
regulations that are not closely related to events and transactions reflected
in the consolidated financial statements. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of not detecting
one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at
https://www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor's report.
Use of our report
This report is made solely to the Group's shareholders as a body, in
accordance with Article 113A of the Companies (Jersey) Law 1991. Our audit
work has been undertaken so that we might state to the Group's shareholders
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 Group and the Group's
shareholders as a body, for our audit work, for this report, or for the
opinions we have formed.
Phillip Callow
For and on behalf of Moore Stephens Audit & Assurance (Jersey) Limited
1 Waverley Place
Union Street
St Helier
Jersey
Channel Islands
JE4 8SG
Dated:
Consolidated Statement of Comprehensive Income for the Year Ended 30 September 2023
Year to Year to
30 Sept 2023 30 Sept 2022
Note £'000 £'000
Revenues 3 5,323 2,120
Cost of sales (924) (414)
Operating expenses 4,5 (6,474) (3,271)
Operating loss (2,075) (1,565)
Operating loss before acquisition costs (1,853) (1,436)
Acquisition costs 21 (222) (129)
Operating loss after acquisition costs (2,075) (1,565)
Fair value gains on financial instruments 15 1,680
-
Share award expense (13) -
Other income and charges 7 (35) (23)
Loss on ordinary activities before tax (443) (1,588)
Taxation 8 (2) 64
Loss for the year and total comprehensive (445) (1,524)
loss
Loss per share (basic and diluted) 21 £(0.02) £(0.08)
Consolidated Statement of Financial Position as of 30 September 2023
30 Sep 2023 30 Sep 2022
Note £'000 £'000
Non-current assets
Intangible assets 9 12,398 9,276
Property, plant & equipment 10 654 737
Deferred tax 8 152 156
Long term deposit 12 71 63
13,275 10,232
Current assets
Trade, other receivables, and prepayments 14 731 910
Cash and cash equivalents 13 1,938 1,747
2,669 2,657
Trade and other payables: amounts falling due within one year 15 (5,988) (2,640)
Net current (liabilities)/assets (3,319) 17
Total assets less current liabilities 9,956 10,249
Trade and other payables: amounts falling due after one (1,731) (1,592)
Year
15
Net assets 8,225 8,657
Equity
Stated Capital 17 12,349 12,349
Share award reserve 13 -
Retained loss (4,137) (3,692)
Total Equity 8,225 8,657
The consolidated financial statements on pages 44 to 72 were approved and
authorised for issue by the Board of Directors on the 27 March 2023 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 for the Year Ended 30 September 2023
Stated capital Share award reserve Retained earnings Total
£'000 £'000 £'000 £'000
At 1 October 2022 12,349 - (3,692) 8,657
Loss for the year - - (445) (445)
Share award for the year - 13 - 13
At 30 September 2023 12,349 13 (4,137) 8,225
Stated capital Share award reserve Retained earnings Total
£'000 £'000 £'000 £'000
At 1 October 2021 9,606 - (2,168) 7,438
New share Capital 2,743 - - 2,743
Loss for the year - - (1,524) (1,524)
At 30 September 2022 12,349 - (3,692) 8,657
Consolidated Statement of Cash Flows for the Year Ended 30 September 2023
Year to Year to
30 Sept 2023 30 Sept 2022
Note £'000 £'000
Cash flows from operating activities
Loss for the year before tax (443) (1,588)
Adjustments to cash flows from non-cash items:
Depreciation and amortisation 6 1,166 624
Finance costs 7 35 23
Fair value (gains)/losses on financial instruments 15 (1,680) -
Share award expense 13 -
Trade and other receivables (336) (362)
Trade and other payables 425 (61)
Net cash outflow from operating activities (820) (1,364)
Cash flows from investing activities
Acquisition of subsidiary - (3,496)
Payment of deferred consideration 15 (20) (1,534)
Acquisition of property, plant, and equipment (45) (15)
Net cash outflow from investing activities (65) (5,045)
Cash flows from financing activities
Lease liability paid (201) (85)
Issue of share capital - 2,743
Proceeds from loan notes issued 15 425 -
Net cash flow from financing activities 224 2,658
Net decrease in cash and cash equivalents (661) (3,751)
Cash and cash equivalents at beginning of year 1,747 4,921
Cash and cash equivalents from subsidiaries at acquisition 852 577
Cash and cash equivalents at end of 1,938 1,747
year* 13
*Included in cash and cash equivalents at the year end is £694,000 of fixed
term deposits held in lien by the United Arab Emirates government as part of
regulatory compliance.
The consolidated statement of cash flows of the Group for the year ended 30
September 2023 is set out above. Details of additions and disposals of which
are given in note 10.
Non-cash items:
During the year, Globaleye (BVI) Limited ("Globaleye Group") was acquired for
a total consideration of £3,672,375, which comprised of share capital
exchange of £2,545,533 and loan notes of £1,126,821. These amounts are
payable post year end and see note 15.
Notes to the Consolidated Financial Statements for the year ended 30 September 2023
1. General information
TEAM plc (the "Company" and "Group") 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 activities of the Group are the provision of investment
management, financial advisory services and insurance brokering services.
These financial statements are presented in Pound Sterling (£), the
functional currency of the Group, 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,
except for 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.
Basis of consolidated financial statements
The Group's financial statements consolidate those of the parent company and
all its subsidiaries as of 30 September 2023. Control is achieved where the
Company is exposed, or has rights, to variable returns from its involvement
with an investee company and can affect those returns through its power over
the other entity; power generally arises from holding a majority of voting
rights.
All transactions and balances between Group companies are eliminated on
consolidation, including unrealised gains and losses on transactions between
Group companies. Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the accounting
policies adopted by the Group.
Profit or loss and other comprehensive income of the subsidiaries acquired or
disposed of during the year are recognised from the effective date of
acquisition, or up to the effective date of disposal, as applicable.
The Group attributes total comprehensive income or loss of subsidiaries
between the owners of the parent given all subsidiaries are 100% owned.
New standards and interpretations not yet adopted
There are several 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
2023:
· IFRS 17 Insurance Contracts
· Classification of Liabilities as Current or Non-Current - Amendments
to IAS 1
· Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS
Practice Statement 2
· Definition of Accounting Estimates - Amendments to IAS 8
· Deferred Tax related to Assets and Liabilities arising from a Single
Transaction - Amendments to IAS 12
The Group does not believe that the standards not yet effective, will have a
material impact on the consolidated financial statements.
Going concern
The group incurred a consolidated net loss of £445,000 during the year ended
30 September 2023 and, as of that date, its consolidated current liabilities
exceeded its consolidated current assets by £3,319,000. This indicates that
the company may not be a going concern.
The Directors have prepared financial projections along with sensitivity
analyses of reasonably plausible alternative outcomes, covering clients and
assets, cost inflation, the take up of Group services and the potential
acquisition of further businesses. The forecasts demonstrate that the
Directors believe that the Group will require additional financial resources
to meet the cash requirements of the Group before it is expected to reach a
cash flow positive state. The Board therefore is actively managing the cost
base of the Group, curtailing expenditure on further acquisitions, it is
considering options to improve the current revenue yields earned, and
preparing alternatives to raise further funding as and when required,
including within the next 12 months. This could include further use of loan
notes, and the potential for a targeted equity raise from the current
shareholder base.
Taken together, while the plans to mitigate the cash required, and the plans
to raise further funding, are both not certain, they do give the Board
sufficient confidence to consider the going concern basis to be appropriate
for the accounts.
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, goodwill and intangible
assets, deferred consideration payable and the provision for income and
deferred taxes. Further details of these estimates and judgements are set out
in the related notes to the consolidated financial statements 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 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: Fund 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.
· Financial advice services: These are recognised on an accrual basis
over time.
Contracts are assessed to determine whether they contain a single combined
performance obligation or multiple performance obligations. If applicable the
total transaction price is allocated amongst the various performance
obligations based on their relative stand-alone selling prices.
Revenue is recognised at the point in time when the Group satisfies
performance obligations by transferring the promised services to its
customers. The Group has no unsatisfied performance obligations and so does
not recognise any contract liabilities for consideration.
If the Group satisfies a performance obligation before it receives the
consideration, the Group recognises either a contract asset or a receivable in
its consolidated statement of financial position, depending on whether
something other than the passage of time is required before the consideration
is due.
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 based on 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
The individual financial statements of each group entity are presented in the
currency of the primary economic environment in which the entity operates (its
functional currency). For the purposes of the consolidated financial
statements, the results and financial position are presented in Sterling £.
For the purposes of presenting consolidated financial statements, the assets
and liabilities of the group's foreign operations are translated from their
functional currency to Sterling £ using the closing exchange rate. Income and
expenses are translated using the average rate for the period, unless the
exchange rate fluctuates significantly during the period, in which case
exchange rates that the dates of the transactions are used. Exchange
differences are recognised in the profit or loss in the period in which they
arise.
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 is 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.
Where available, Group losses are transferred between companies who pay the
same rate of tax to the same taxation authority.
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. Assets are recognised when it is probable that
the future economic benefits associated with the asset will flow to the entity
and the cost can be measured reliably. 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. 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 & fixtures
4 years
Leasehold Improvements 5
years
Right of use assets
Over the term of the lease
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method
when the Group undertakes business combinations. The Group has acquired a
business when it obtains control over a collection of assets and the acquired
assets and activities that include inputs, substantive processes and the
ability to produce outputs.
All consideration transferred is recognised at fair value at the date of
acquisition. This includes assets transferred, liabilities incurred by the
owners and equity instruments issued by the Group. Contingent consideration is
initially recognised at fair value. If the contingent consideration is
classified as equity, it is not remeasured, and settlement is accounted for
within equity. If the contingent consideration is classified as a financial
liability, it is remeasured to fair value at each reporting date, with the
movement in fair value being recognised in the statement of profit or loss.
At acquisition date, to the extent that the total consideration transferred,
fair value of prior equity interests and NCI are greater than the net assets
acquired, goodwill is recognised. If the fair value of the net assets acquired
is more than the total consideration transferred, then the difference is
recognised in profit or loss as a bargain purchase.
Intangible assets
The value of the customer relationships has been calculated using the excess
earnings approach discounted using the Group's estimated cost of capital. 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
has 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
On 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 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.
Goodwill
Goodwill represents the future economic benefits arising from a business
combination that are not individually identified and separately recognised.
Goodwill is not amortised, but it is tested for impairment annually, or more
frequently if events or changes in circumstances indicate that it might be
impaired, and is carried at cost less accumulated impairment losses.
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 and 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 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, cash and bank
balances and long term deposits, 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.
Financial liabilities, including trade and other payables and loan notes 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.
Financial instruments are categorised as fair value through profit or loss if
they are derivatives, held for trading or designated as such on initial
recognition. Gains and losses on such financial liabilities are recognised in
the income statement.
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 award reserve
The Grant date fair value of equity-settled share-based payments is recognised
as an expense over the period when the associated service is rendered (the
vesting period), with a corresponding increase in equity. Vesting conditions,
other than market conditions, are used to determine the number of awards that
are expected to vest, the estimate being adjusted at each period as necessary.
If these conditions are not met, the cumulative expense recognised in relation
to these awards will be nil.
Where awards are modified, the minimum expense recognised will always be the
grant date fair value of the original award, provided the non-market vesting
conditions of the original award were met. To the extent the modification
results in any incremental expense determined at the date of modification,
this will be recognised over the remaining vesting period of the modified
award.
When an award is cancelled the remaining amount of the grant date fair value
that has not already been recognised, will be recognised immediately as an
expense in the income statement.
Translation reserve
This reserve contains the translation differences that arise from the
translation of the foreign controlled entities of the Group into the
presentation currency for consolidation. When the Group loses control of a
foreign entity, the amounts in this reserve will be recognised in profit or
loss.
Retained losses
Retained losses represent the cumulative earnings or losses of the Group, less
any dividends declared.
3. Operating Segments
Following the acquisitions of the subsidiaries, the Group now identifies three
principal operating segments: Investment Management, Advisory and
International.
Investment Management provides investment management services for individuals,
trusts, sovereign agencies and corporations, Advisory provides personal
financial advice, investment consulting, and treasury advisory services. Both
segments are in Jersey, Channel Islands. International provides personal
financial advice services and fund distribution in the Middle East, Asia &
Africa.
No customer represents more than 10% of Group revenues (FY 22: nil)
The following table represents revenue and cost information for the Group's
business segments:
Investment Management Advisory Internat-ional Group and consolidation adjustments Group
2023 Operating Segments £'000 £'000 £'000 £'000 £'000
Revenue 951 3,039 1,332 1 5,323
Cost of sales (372) - (497) (55) (924)
Contribution 579 3,039 835 (54) 4,399
Operating expenses (1,416) (2,052) (967) (651) (5,086)
Underlying profit before tax (837) 987 (132) (705) (687)
Acquisition related costs - - - (222) (222)
Amortisation of acquired clients relationships - - - (995) (995)
Interest payments - - - (35) (35)
Deferred consideration fair value adjustments - - - 1,680 1,680
Share award expense - - - (13) (13)
Net changes in the value of non-current asset - - - (171) (171)
Profit before tax (837) 987 (132) (461) (443)
Tax (4) 5 (3) - (2)
Profit/(loss) for the year (841) 992 (135) (461) (445)
Investment Management Advisory* Internat-ional Group and consolidation adjustments* Group
2022 Operating Segments £'000 £'000 £'000 £'000 £'000
Revenue 1,025 1,094 - 1 2,120
Cost of sales (386) - - (28) (414)
Contribution 639 1,094 - (27) 1,706
Operating expenses (1,255) (605) - (658) (2,518)
Underlying profit before tax (616) 489 - (685) (812)
Acquisition related costs - - - (129) (129)
Amortisation of an acquired clients relationships - - - (543) (543)
Changes in fair value - - - (23) (23)
Net changes in the value of non-current asset - - - (81) (81)
Profit before tax (616) 489 - (1,461) (1,588)
Tax 67 (3) - - 64
Profit/(loss) for the year (549) 486 - (1,461) (1,524)
* revenue and costs recategorized to be consistent with 2023 segments
4. Staff costs
The aggregate payroll costs (including Directors' remuneration) were as
follows:
Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Wages and salaries 3,359 1,678
At 30 September 2023, the Group had 87 staff (30 September 2022: 33), with 52
in the UAE, 29 in Jersey, 3 in Singapore and 1 each in the UK, South Africa
and Malaysia (30 September 2022: 32 in Jersey and 1 in the UK). There were
also 10 self-employed adviser, 8 with BVI contracts and 2 in Jersey.
5. Directors' remuneration
The Directors' remuneration for the year was as follows:
Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Executive
J M Clubb 163 142
M C Moore 287 208
Non-Executive
L P C Taylor 25 25
M M Gray 25 25
D J K Turnbull 25 25
525 425
Total Total
30 Sept 2023 30 Sept22
Equity settled share-based payments £'000 £'000
J M Clubb 5 -
M C Moore 8 -
13
Directors' Interests in Management Incentive Plan ("MIP")shares
Total Total
30 Sept 2023 30 Sept22
No. No.
M C Moore 650 650
On 12(th) May 2022 the Company set up a revised MIP. Mr Clubb chose not to
participate in the new plan, and Mr Moore was awarded 650 shares, with two
other non-Directors of TEAM being awarded 100 shares each. One of those
directors has now left the Group, and their shares acquired back and
cancelled.
The maximum dilution under the MIP has been reduced from 8.5% to 7.5%
following the cancellation of the shares issued to the departed individual.
One-third of the MIP will be set with reference to the TEAM plc share price,
with full pay out when the share price is twice the Subscription Price of 60
pence. Two-thirds of the scheme will be set with reference to the TEAM plc
market capitalisation, with full pay out when the market capitalisation is
equal to or exceeds £40 million.
6. Operating loss
Is stated after charging:
Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Auditors' remuneration - audit fees 40 21
Amortisation of intangibles 995 543
Depreciation of property, plant, and equipment 30 17
Depreciation of right of use asset 141 64
Interest on right of use asset 40 30
1,246 675
7. Interest payable and similar expenditure
Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Interest payable - Right of use asset 40 30
Unwinding of discounted long term deposit (8) (8)
Other interest payable 3 1
35 23
8. Taxation
Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Income tax charge 2 (64)
Regulated financial services businesses in Jersey pay a flat corporation tax
rate of 10%. The Treasury Services business is not regulated and has a nil tax
rate. The Globaleye entities are subject to tax rates of 17% (Singapore), 3%
(Labuan), between 7 and 27%% (South Africa), and 0% (UAE and BVI). The
increased tax recovery in the year reflects the higher taxable losses in the
period.
The differences are reconciled below: Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Loss before tax applicable to financial service companies from date of (654) (742)
acquisition to year end
Tax for financial service companies at 10% (65) (74)
Effect of permanent expense not deductible in determining taxable profit 9 10
Tax effect of Group losses utilised within the Group 65 -
Group losses utilised for prior year tax payable 10 -
Tax increase from effect of unrelieved tax losses carried forward (17) -
Total tax decrease 2 (64)
Deferred tax assets and liabilities
Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Losses brought forward 153 89
Losses for the year 85 64
Utilised within the Group (74) -
Losses used in prior year tax charges (13) -
Losses carried forward 151 153
Capital allowances 1 3
Deferred tax asset 152 156
9. Intangible assets
On 31 May 2023, TEAM plc acquired the economic rights to the share capital of
Globaleye (BVI) Limited ("Globaleye"), a trading company incorporated and
registered in The British Virgin Islands, which is the parent company for the
Globaleye Group companies listed in note 11. The total headline consideration
for Globaleye was £4,991,000 plus a potential earn out of up to £800,000.
The headline consideration was to be satisfied by the issue of 6,208,667 new
Ordinary TEAM shares (being £2,546,000 at a share price of 41 pence per
share) plus a loan note convertible into up to 5,964,138 new Ordinary TEAM
shares, with a headline value of £2,445,000.
The 6,208,667 shares were issued on 1(st) November 2023. As at 30 September
2023 the mid-market share price for TEAM ordinary shares had fallen from 41
pence when the commercial terms for the transaction were agreed, to 36 pence,
leading to a reduction in the value of the equity to be issued from
£2,546,000 to £2,236,000. Consequently £310,000 is included as a fair value
gain on financial instruments in the Statement of Comprehensive Income.
The conversion of the convertible loan note is contingent consideration and is
dependent on satisfaction of the exercise conditions, and subject to the right
of set off against claims against the loan note holder. These claims include a
shortfall of the value of the net assets acquired against an agreed target
which has been assessed as a shortfall of £1,319,000. The £1.3million is
adjusted against the initial consideration as the shortfall existed at the
acquisition date. The total consideration is recorded as the headline
consideration of £4,991,000 less the shortfall of £1,319,000, being
£3,672,000.
The remaining balance for the convertible loan note was £1,126,000. In the
view of the Directors, as part of the normal post-acquisition review of the
business, breaches of warranties have been identified. The extensive claims
available to TEAM plc arising from the clear breaches of warranties by the
warrantor will result in warranty claims whose value will exceed the remaining
balance. Consequently this liability has been written down to nil and is
included in the fair value gains on financial instruments in the Statement of
Comprehensive Income.
Included in the Statement of Comprehensive Income are £116,000 of
transactions costs relating to this acquisition.
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
Globaleye Group companies is listed in the next tables:
As at 31 May 2023
£'000
Categorisation of assets: Globaleye (BVI) Limited
Goodwill 4,117
Non-current fixed asset 58
Cash and cash equivalents 852
Trade and other receivables 178
Trade and other payables (1,533)
Total Consideration 3,672
The Directors have assessed the future contribution of the Globaleye Group to
TEAM, and as a result of the expected flow of client assets into the TEAM MPS,
they believe the goodwill balance of £4,117k is supported by the future
profit contribution to the Group.
The Group considers both qualitative and quantitative factors when determining
whether goodwill or an intangible asset may be impaired. At each year end, the
Group reviews all intangible assets and goodwill separately and individually
to assess and identify any indicators of impairment. Using an excess earnings
approach discounted based on approved budgets and the following assumptions:
· Weighted average cost of capital of 11.25% - based public and
industry standards.
· Revenue forecast:
o Intangible - a lost customer attrition rate of 5% for identifiable
customer relationships
o Goodwill - a growth rate of 5% for total revenue
o Based on past performance and managements future expectations as part of
the budgets, taking into account growth in the industry.
· Growth rate for staff and other costs in line with the revenue %'s
above - as these costs are associated with the revenue of the business, they
will adjust in line with the related projections for revenue.
· Forecast review period of 10 years - based on the usual contractual
period with clients and to link together with the amortisation period of the
intangibles.
The Group identified at no impairments of intangible assets at 30 September
2023. The Group will continue to monitor all assets at each year end and will
impair assets where indicators are present.
Year to Year to
30 Sep 2023 30 Sep 2022
£'000 £'000
Customer Relationships 6,386 7,381
Goodwill 6,012 1,895
Total Intangible Asset 12,398 9,276
Theta Enhanced Asset Management Limited JCAP Limited Omega Financial Services Limited Concentric Group Limited GE BVI Limited Total
customer relationships
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 October 2022 1,059 1,759 3,279 2,091 - 8,188
At 30 September 2023 1,059 1,759 3,279 2,091 - 8,188
Amortisation
At 1 October 2022 282 440 55 30 - 807
Charge for the year 106 352 327 210 - 995
At 30 September 2023 388 792 382 240 - 1,802
Carrying Amount
At 30 September 2023 671 967 2,897 1,851 - 6,386
At 30 September 2022 777 1,319 3,224 2,061 - 7,381
Theta Enhanced Asset Management Limited JCAP Limited Omega Financial Services Limited Concentric Group Limited GE BVI Limited Total
Goodwill
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 October 2022 - 1,191 536 168 - 1,895
Acquired through business combinations - - - - 4,117
4,117
At 30 September 2023 - 1,191 536 168 4,117 6,012
10. Property, plant, and equipment
Right of Equipment Computer Leasehold
use assets & fixtures Hardware Improvements Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 October 2022 757 51 52 2 862
Additions 43 16 29 - 88
Disposals - - - - -
At 30 September 2023 800 67 81 2 950
Depreciation
At 1 October 2022 86 14 25 - 125
Disposals - - - - -
Charge for the year 141 14 15 1 171
At 30 September 2023 227 28 40 1 296
Carrying Amount
At 30 September 2023 573 39 41 1 654
At 30 September 2022 671 37 27 2 737
The right-to-use asset balance is made up of four properties across the Group.
The four properties are:
- 6 Caledonia Place, St Helier, Jersey, JE2 3NG. The lease term ends
on 30 April 2030.
- Ground Floor, 3 Mulcaster Street, St Helier, Jersey, JE2 3NJ. The
lease term ends on 23 March 2026.
- Third Floor, Conway House, St Helier, Jersey, JE2 3NT. The lease
term ends on 31 October 2027.
- Office 2002, Blvd Plaza Tower 1, Dubai, 2543, UAE. The lease term
ends on 30 November 2023.
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-23 30-Sep-23 30-Sep-22 30-Sep-22
TEAM Midco Limited Jersey Ordinary 100% 0% 100% 0%
JCAP Limited Jersey Ordinary 100% 100% 100% 100%
Theta Enhanced Asset Management Limited Jersey Ordinary 100% 100% 100% 100%
TEAM (UK) Management Services Limited U.K. Ordinary 100% 100% 100% 100%
TEAM Nominees Limited Jersey Ordinary 100% 100% 100% 100%
Omega Financial Services Limited Jersey Ordinary 100% 100% 100% 100%
Concentric Group Limited Jersey Ordinary 100% 100% 100% 100%
Concentric Financial Services Limited Jersey Ordinary 100% 100% 100% 100%
Concentric Analytics Limited Jersey Ordinary 100% 100% 100% 100%
Globaleye (BVI) Limited British Virgin Islands Ordinary 100% 100% 0% 0%
Globaleye Insurance Brokerage (L.L.C) ((1)) United Arab Emirates Ordinary 100% 100% 0% 0%
Globaleye Capital Advisory LLC ((2)) United Arab Emirates Ordinary 100% 100% 0% 0%
Globaleye PTE LTD Singapore Ordinary 100% 100% 0% 0%
Globaleye (Labuan) Limited Malaysia Ordinary 100% 100% 0% 0%
Globaleye Wealth South Africa (PTY) Ltd ((3)) South Africa Ordinary 100% 100% 0% 0%
100% of the economic benefits from the share capital of Globaleye (BVI)
Limited and its associated subsidiaries were acquired during the year in line
with the strategy of the Group to become a leading wealth manager in global
markets. The ownership of the shares will be transferred to Team on receipt of
consent from the various regulatory organisations granting licenses to
Globaleye.
(1) As is required by local legislation, a majority of the shares (51%) in
Globaleye Insurance Brokerage LLC are held by local individual, as nominee for
the shareholders of Globaleye BVI.
(2) For Globaleye Capital Advisory LLC a local individual holds 10% of the
share capital, again as a nominee for the shareholders of Globaleye BVI.
(3) For Globaleye Wealth South Africa (PTY) Ltd a local individual hold 1%
of the share capital as a nominee for the shareholders of Globaleye BVI.
Since being acquired at 31(st) May 2023, Globaleye has earned revenue of
£1,332k and a loss of £132k for the four-month period ended 30 September
2023.
12. Long-term deposit
On 6 August 2020, a group 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 (30 September 2022: £100,000). The
client agreement is binding for a period of 7 years from the 6 August 2020 and
may be terminated by way of written notice of not less than 180 days following
the end of the 7 years' period.
The Company has opted to classify the deposit under the amortised cost method.
The present value of the deposit at the 30 September 2023 was £70,691 (30
September 2022: £63,208) based on a discount rate of 11.25% (30 September
2022: 11.25%).
13. Cash and cash equivalents
30 Sep 2023 30 Sep 2022
£'000 £'000
Cash 1,244 1,747
Fixed deposits 694 -
1,938 1,747
Included in cash and cash equivalents are fixed cash deposit accounts of
£694,000 which are required for regulated insurance companies in the United
Arab Emirates if the company continues to remain functional. If the licence
was to end, the amounts would be returned on demand to the relevant company.
In Jersey, the group has three regulated entities which follow the Jersey
Financial Services Commission Code of Practice for Fund Services Business and
Investment Business. There is a requirement for these companies to maintain a
surplus of adjusted net liquid assets over the expenditure requirement in a
ratio of 110%. The ANLA is reviewed quarterly by management.
14. Trade and other receivables
30 Sep 2023 30 Sep 2022
£'000 £'000
Due within one year
Trade receivables 188 403
Accrued income 274 247
Prepayments and other receivables 269 260
731 910
In the view of the Directors, there is no impairment of receivables (30
September 2022: nil)
15. Trade and other payables
30 Sep 2023 30 Sep 2022
Note £'000 £'000
Due within one year
Lease liability 16 152 102
Payables 486 353
Social security and other taxes 69 79
Other Payables 1,111 185
Deferred consideration - cash settled 679 693
Deferred consideration - equity settled 3,077 955
Accruals 414 273
5,988 2,640
30 Sep 2023 30 Sep 2022
Note £'000 £'000
Due after one year
Lease liability 16 441 592
Deferred consideration - cash settled 679 215
Deferred consideration - equity settled 186 785
Loan Notes 425 -
1,731 1,592
The acquisition of Globaleye Group was funded by the obligation to issue new
TEAM Plc's equity for an initial valuation of £2,545,000, and through the
issuance of a convertible loan note with a headline value of £2,445,370. The
equity was issued after the year end on 27 October 2023, with 6,208,667 shares
issued. As at 30 September 2023 the mid-market share price for TEAM ordinary
shares had fallen from 41 pence when the commercial terms for the transaction
were agreed, to 36 pence, leading to a reduction in the value of the deferred
payment of £310,000 to £2,235,000. This reduction is included in the fair
value gains on financial instruments in the Statement of Comprehensive Income.
The convertible loan note is recorded at nil (see note 9), and the initial
balance of £1,126,000 is also included in the fair value gains on financial
instruments.
The deferred payment for the acquisition of CGL was settled after the period
end on 27 October 2023. This was reduced from the maximum of £833,000, to
£655,000, based on actual revenues earned against set targets. The difference
of £178,000 is included in the fair value gains on financial instruments in
the Statement of Comprehensive Income.
The deferred payments for the acquisition of Omega Financial Service Limited
did not fall due during the period, beyond £20,000 relating to work in
progress at the time of the acquisition. A balance of £865,000 is due within
twelve months, and a further £865,000 is due after 12 months, reduced by
£65,000 from the 30 September 2022 balance following an assessment of the
expected revenues generated in the unit. This difference has been taken to the
fair value gains on financial instruments. As part of the agreement to acquire
the business, up to £1.131 million of cash will be held back from the
deferred payments in light of the investigation by the JFSC of historic
weaknesses in the control environment. This will be released, net of any costs
or fines incurred as a result of the investigation, only when the JFSC closes
the investigation down.
The Company issued £425,000 of unsecured loan notes on 20(th) September 2023.
The loan notes are repayable on 31 December 2024 and interest will roll up and
be repaid on maturity. The interest rate payable on the loan notes is 12%. The
Company can repay the loan notes prior to the repayment date at any time
without penalty. The loan noteholders cannot request early repayment.
Following the period end further notes were issued, with the total being
£1,135,000 as of the date of this report.
Deferred Consideration 30 Sep 2023 30 Sep 2022
£'000 £'000
Opening balance 2,649 1,494
Additions in year 3,672 2,649
Additional consideration due from prior years - 40
Adjustments in fair value during the year (1,680) -
Deferred consideration paid in year (20) (1,534)
Closing balance 4,621 2,649
16. Lease liabilities
The amount of interest on the lease liabilities recognised as an expense
during the year was £40,136 (30 September 2022: £29,843). Following the
acquisition of Globaleye during the year, the Group now occupies four
properties. 1) 6 Caledonia Place, St Helier, Jersey, JE2 3NG. The lease
repayments are £70,000 per annum. The lease term ends on 30 April 2030. 2)
Ground Floor, 3 Mulcaster Street, St Helier, Jersey, JE2 3NJ. The lease
repayments are £30,000 per annum. The lease term ends on 23 March 2026. 3)
Third Floor, Conway House, St Helier, Jersey, JE2 3NT. The lease repayments
are £40,680 per annum. The lease terms ends on 31 October 2027. 4) Office
2002, Blvd Plaza Tower 1, Dubai, 2543, UAE. The lease term ends on 30 November
2023.
30 Sep 2023 30 Sep 2022
£'000 £'000
Maturity analysis
Not later than one year 152 102
Between one and five years 336 426
Greater than 5 years 105 166
593 694
17. Stated capital
30 Sep 2023 30 Sep 2022
No. No.
Allotted, called, and fully paid shares
Ordinary shares* 21,976,145 21,976,145
*all shares hold equal voting rights of 1 vote each, the board can issue new
shares up to the limit specified in the prior year's AGM.
30 Sep 2023 30 Sep 2022
£'000 £'000
Stated capital
Opening balance 12,349 9,606
New Capital subscribed - 2,743
12,349 12,349
18. 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.
On 28 September 2023, the Company announced the issue of a loan note for
£425,000, of which Mr Clubb and Mr Moore, the executive directors of the
Company, subscribed for £150,000 and £25,000 respectively.
There are no further related party transactions to be disclosed during the
year.
19. Financial instruments
30 Sep 2023 30 Sept 2022
£'000 £'000
Categorisation of financial instruments
Financial assets measured at amortised cost: 188 403
Trade receivables
Long-term deposit 71 63
Fixed deposits 694 -
Cash and cash equivalents 1,244 1,747
2,197 2,213
Financial liabilities measured at amortised cost: (486) (353)
Trade payables
Other payables (1,111) (184)
Loan notes (425) -
Lease liability (593) (694)
(2,615) (1,231)
Financial liabilities measured at fair value:
Deferred Consideration (4,621) (2,648)
(4,621) (2,648)
20. 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.
Certain activities of the Group are regulated by the JFSC which is the
regulator for financial services businesses in Jersey and has responsibility
for policy, monitoring, and discipline for the financial services industry.
The JFSC requires the regulated entities' resources to be adequate, that is
sufficient in terms of quantity, quality, and availability. There are also
Group activities governed by regulators in the UAE, Singapore, South Africa,
and Labuan, and these also have capital or other financial requirements on the
regulated entity.
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 month or quarter end. The Group does not believe there is significant
credit risk. In addition, the financial assets are neither past due nor
impaired.
Foreign currency risk management
The Group is exposed to foreign exchange risk as it manages client assets in
Euro, US Dollar, Swiss Franc, UAE Dirham, Singapore Dollar, Malaysian Ringgit
and South African Rand. Change in the exchange rate will have an impact on the
fees earned when translated into Sterling.
While the Globaleye Group companies are impacted by foreign exchanged, the
overall effect on the TEAM plc numbers is not very significant as shown by the
sensitivity analysis below:
Effect in £'000s of a % change in exchange rates + 1% -1%
Loss for the year 1 1
Revenue 13 13
Cash and cash equivalents 10 10
Net assets 6 6
Market risk management
The Group is mainly exposed to market risk in respect of variations in
customers' 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 way 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 reserve and by
continuously monitoring the capital requirements of the Group. As of 30
September 2023, the deficit of financial assets over financial liabilities was
£5,039,000 (30 September 2022: deficit of £1,730,000).
Remaining maturities of financial liabilities:
Less than Between Greater than
one year 2-5 years 5 years Total
£'000 £'000 £'000 £'000
Trade payables 486 - - 486
Other payables 4,867 865 - 5,732
Loan notes - 425 - 425
Lease liabilities 152 336 105 593
At 30 September 2023 5,505 1,626 105 7,236
Less than Between Greater than
one year 2-5 years 5 years Total
£'000 £'000 £'000 £'000
Trade payables 353 - - 353
Other payables 1,833 1,000 - 2,833
Lease liabilities 102 426 166 694
At 30 September 2022 2,288 1,426 166 3,880
21. Earnings per share
The Group has calculated the weighted-average number of outstanding ordinary
shares for the period as follows:
Weighted Average Number of Shares 2023 Date Number of shares Time weighting Weighted average number of shares
1 October 2022 - balance brought forward 01-Oct-22 21,976,145 12/12 21,976,145
21,976,145 12 months 21,976,145
Weighted Average Number of Shares 2022 Date Number of shares Time weighting Weighted average number of shares
1 October 2021 - balance brought forward 01-Oct-21 17,299,795 12/12 17,299,795
Deferred consideration shares issued 31-Mar-22 259,683 7/12 151,482
May 2022 - subscription 01-May-22 4,416,667 5/12 1,840,278
21,976,145 12 months 19,291,555
Loss per share 30 Sep 2023 30 Sep 2022
£ £
Loss per share
Loss for the financial period and total comprehensive loss (445,524) (1,523,624)
Weighted average number of shares 21,976,145 19,291,555
(0.020) (0.079)
Adjusted Loss per share Year to Period to
30 Sep 2023 30 Sep 2022
£'000 £'000
Loss after tax (445) (1,524)
Interest 35 23
Tax 2 (64)
Depreciation 171 81
Amortisation of intangible assets 995 543
EBITDA 758 (941)
Acquisition related expenses* 222 129
Share award expense 13 -
Fair value adjustments (1,680) -
Adjusted EBITDA (687) (812)
Weighted average number of shares 21,976,145 19,291,555
(0.031) (0.042)
*Acquisition related expenses relate to third party advisor costs incurred on
the acquisition of
Globaleye, the terminated acquisition of Thornton, and various work in
progress on other
potential transactions over the year.
22. Ultimate controlling party
In the opinion of the Directors, there is no single ultimate controlling
party.
23. Events after the statement of reporting date
Following the year end, a further £710,000 of loan notes were issued,
bringing the total value of loan notes issued to £1,135,000.
On 1 November 2023, a total of 8,029,069 new ordinary shares of no par value
were issued at a value of 36p each, in line with the equity considerations
payable as part of the acquisitions of Concentric and Globaleye.
On 12 December 2023, the acquisition was announced of Neba Financial Solutions
Limited ("Neba Wealth"), a Labuan, Malaysia regulated network of financial
advisers operating in Asian, South and Central American, African and Middle
Eastern markets; and Neba Financial Solutions Private Limited ("Neba
Singapore") which promotes structured funds to IFAs primarily in Dubai and
Singapore. This group of companies will grouped together under "TEAM East"
going forward. The total initial consideration was £1.181 million, which was
satisfied by the issue of a nil coupon loan note which is convertible into
3,281,250 new ordinary shares of nil par value in TEAM. Subsequent deferred
payments to the vendor of £1.0 million for every £100 million which is
invested into Theta Enhanced Asset Management Limited funds and models arising
from clients of TEAM East will be settled by the issue of new TEAM plc shares
at the then prevailing market price, capped at a maximum of 25 million new
ordinary shares. All new shares to be issued to the vendor whether on
conversion of the loan note or in satisfaction of any deferred payments will
have to be held for two years from the date of issue before they may be sold.
On 27 December 2023 TEAM plc announced that it had exchanged contracts to
acquire the entire issued share capital of Homebuyer Financial Services
Limited ("HBFS"), a Jersey based financial planning business, for total
consideration of £2.4 million payable in cash. The acquisition is subject to
various conditions, including fundraising by TEAM plc. As at the date of
signing, the process is continuing.
On 1 June 2023 TEAM plc announced the conditional acquisition of Thornton
Associates Limited, an Isle of Man based financial planning business, for
consideration of up to £2.5 million. On 27 December 2023 TEAM plc announced
that the Thornton management team had decided to remain independent and
therefore it had terminated amicably the agreement with the Thornton
shareholders.
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