REG - Team PLC - Half-year Report
22/06/2022 07:00
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RNS Number : 7049P Team PLC 22 June 2022
Interim Results
For the six months to 31 March 2022
TEAM plc
('the Company' or 'the Group')
Unaudited Interim Results for the six months to 31 March 2022
Delivering on Strategy and on Track to be Cash Positive
Highlights
· TEAM plc was created to be a new wealth, asset
management and complementary financial services group
· In March 2021, TEAM completed a successful listing
on AIM raising gross proceeds of £7.5 million and attracted the support of
leading institutional fund managers and has since:
· In July 2021 completed the second acquisition, a treasury services
business in Jersey, JCAP
· In December 2021 exchanged contracts on a further acquisition, a
financial advice business in Jersey, Omega Financial Services, for a headline
consideration of £4 million (awaiting regulatory approval)
· In May 2022, exchanged contracts for the acquisition of a second
financial advice and investment consulting business, Concentric Group, for a
headline consideration of £2.5 million (awaiting regulatory approval), and
raised gross proceeds of £2.65 million from existing and new shareholders
· Client AUM in the asset management business was £231
million (H1 2022) versus £281 million (FY 2021), primarily as one client with
£41 million of assets transferred to their historic adviser. Cash under
advice was £1.4 billion (H1 2022)
· Strengthened investment management team with key senior
hires, together with further client-facing staff joining post the period end
· Paid the maximum deferred consideration payment, of
£737,500, for the acquisition of JCAP, as it surpassed its profit target for
the year to December 2021
· Good visibility on further significant organic and acquisition
led growth opportunities, within Jersey and other locations
· Staff numbers grown to 20, an increase from 10 at
March 2021
Financial Highlights
· Revenue was up 63% to £1.0 million (H1 2021 £0.6
million)
· Loss for the year down 26% to £0.7 million (H1
2021 £0.9 million)
· Adjusted EBITDA flat at loss of £0.4 million (H1
2021 £0.4 million)
· Loss per share was down 53% to 8 pence (H1 2021 17
pence)
· Adjusted loss per share down 43% to 4 pence (H1
2021 7 pence)
· Cash balance as at 30 March 2022 £3.0 million,
(H1 2021 £6.4 million)
Current trading and outlook
· Trading in line with management expectations
· The Company is benefiting from increasing new client
opportunities, though partially offset by the challenging asset markets
· The Company remains in line to be cash positive once the
acquisitions of Omega and Concentric have gained regulatory approval and are
integrated into the group.
Commenting on the results Mark Clubb, Executive Chairman of TEAM, said:
"TEAM plc is delivering on its growth strategy. We have had a very active
start as a public company, investing in and building a talented, multi-skilled
team as well as putting in place the infrastructure to support them, together
with the distribution capabilities to enable first class execution. To date,
we have made four exciting acquisitions which have helped lay the foundations
for the future.
We therefore have the building blocks in place to provide an integrated wealth
and investment business. Our attention now turns to effectively integrating
the acquired businesses into TEAM plc, and delivering the improved services to
clients that will generate incremental revenues and profits for shareholders.
We have good momentum and are building our presence in our home market of
Jersey, and starting to be recognised as a leading player in the Jersey wealth
management market, as demonstrated by our ability to attract high quality
staff and to win new clients.
With the completion of the two latest acquired businesses, we expect to be
cash positive as a group. We are optimistic for the future."
Enquiries
TEAM plc Mark Clubb / Matthew Moore
Telephone: +44 (0) 1534 877210
Hannam & Partners (Financial Adviser to TEAM)
Giles Fitzpatrick / Richard Clarke / Ernest Bell
Telephone: +44 20 7907 8500
Canaccord Genuity Limited (Nominated Adviser and Broker to TEAM)
Bobbie Hilliam / Alex Aylen
Telephone: +44 20 7523 8000
Novella Communications (Financial Public Relations)
Tim Robertson
Telephone: +44 20 3151 7008
Chairman's Statement
Progress
These are the second set of interim results for TEAM plc as a public company
following our listing in March 2021. At that time of listing we set out our
ambition to become a leading wealth and asset management business. I am
therefore delighted to confirm that we have seen even more opportunity to
develop and grow, and have made significant progress towards this goal.
In December 2021 we exchanged contracts for the acquisition of a Jersey based
financial advisory business, Omega, which has been supplemented by the
exchange of contracts to acquire a second Jersey based IFA and investment
consultancy business, called Concentric Group. These two businesses, together
with the organic growth achieved, and the further development of our pipeline
of potential transactions demonstrate that we have delivered on our early
plans and clearly signal the future potential of the Group.
We have also continued to invest in the development of TEAM Jersey, our asset
management business, and the integration into the group of the treasury
services business we acquired last year, JCAP. Our new proposition has found
favour with the large majority of the acquired client base, though we have
seen some move on where the alignment was less clear. The return of volatility
to global asset markets has dampened investment returns, though as a long-term
focused manager this is part of the expected cycle.
Our financial results for the period demonstrate a significant improvement in
our revenues, and, while this has required investment, we expect it to pay off
in the future. Our revenues rose from £610k in the previous period to £999k,
while our operating loss closed at £700k (£935k). The underlying loss,
excluding the costs associated with the acquisitions, increased to £646k from
£467k. Group total net assets fell to £6.9 million, down from £7.7 million,
and cash balances at the year- end were £3.0 million (2021: £6.4 million)
with no deferred payments outstanding. Financially, we are well positioned to
continue with our growth plans.
We received good support from existing and new shareholders for our most
recent round of fund raising in May to acquire the Concentric Group and add to
working capital. We look forward to integrating this business into the Group
and we are grateful for the continued and new support from our shareholders.
We entered the second half of the financial year in a good position, with the
expectation of maintaining our positive momentum and building upon progress to
date. Once we have completed the two acquisitions agreed by gaining regulatory
approval, we expect the business will become cash positive. I look forward to
providing further updates as we continue to progress.
Mr J M Clubb
Executive Chair
21 June 2022
Operational and Financial Review
Overview
The first six months of the financial year include a full contribution from
the acquired JCAP business for the first time, which was the main driver of
the increase in revenues from £0.6 million to £1.0 million. The adjusted
EBITDA (adjusted for IPO and acquisition costs) was flat at a loss of £382k.
This is our preferred measure of profitability, as it shows the core
performance of the group, and is not skewed by the impact of amortisation of
intangible assets.
The adjusted loss per share reduced to 4p from 7p, and at this early stage in
the Company's development we are not recommending paying a dividend for the
period. The Company had over £3 million of cash at period end on the balance
sheet
TEAM Jersey
October 2021 to March 2022 saw further investment in the investment management
business, a revision to client fees, and further steps towards building the
investment track record of the multi asset portfolios, which delivered
outperformance of mid to high single digit across all four strategies
(Diversified Income, Multi Asset Cautious, Balanced & Growth) versus MPI
peer group (55 direct competitors). This places TEAM ahead of MPI peer group
across all key time periods (rolling 1Y, 3Y, 5Y) in each strategy. The
business did however see a large, lower yielding client, transfer to historic
managers who had left TEAM Jersey, and this was the main driver in the total
AUM falling from £285 million to £231 million. There were positive signs,
with the level of new client wins on an upwards trajectory. TEAM Jersey is
starting to gain traction with the key trustee intermediaries within Jersey.
The Keox funds continued to perform well within their asset class, but were
overall down from £91 million to £82 million. This decline was directly
attributable to bond market declines as the interest rate environment changed
to combat inflation. This was further compounded by a widening in credit
spread in both Investment Grade and High Yield sectors.
We will shortly be shutting the KEOX GBP fund and transferring the assets to
our new GBP Diversified Income fund (Liechtenstein UCITS). I'm confident that
we can get the fund up to £20 million in fairly short order.
The TEAM International Equity Fund (Dublin UCITS) performed better than most of the peers, being up 3.4% versus MSCI All World Index for the period of plus 7.4%. The volatility and uncertainty of equities markets has presented marketing challenges in terms of new subscribers. However, I believe this may be short lived.
Treasury Services
JCAP made a material contribution to the financial performance of the group,
and exceeded its profit target for the year to December 2021. The deferred
consideration due on the acquisition was paid in full. The upwards move in
interest rates is leading to greater client interest for the cash advisory
services, and while still early days, extending the client base into the
Jersey trust market is looking promising.
M&A
We exchanged contracts to acquire 100% of the shares of Omega Financial
Services (Jersey) Limited in December 2021, which we covered in our annual
report last year. We have bolstered our financial advice capabilities in
Jersey by the acquisition of a second business, the Concentric Group, which we
signed in May 2022. Both Omega and Concentric await approval by the Jersey
regulator for the change in the shareholder.
I am pleased to report that the above transactions have been well received and
heightened the market's awareness of TEAM Plc. The result is that
opportunities both recruitment and corporate are presenting themselves more
than ever. I believe there will be further consolidation both locally (e.g.,
RBC acquiring Brewin), internationally within the ex-pat centres and other IFC
jurisdictions. For recruitment we are now an appealing "home" for all ranges
of professionals and importantly, their clients.
Looking Forward
H2 2022 will be another period of progression for the business. In the near
term we are looking forward to completing the acquisition of both Omega and
Concentric and then fully integrating the two businesses into the Group. This
will be relatively quick as much of the groundwork has been done and the
respective teams are already working closely together and jointly planning
future projects around potential opportunities.
There is a real TEAM plc ethos and personality developing, driven by the
people already in the business and those who are about to join. Being a new
wealth, asset management and complementary financial services group, this is
modern business, and the ethos is entrepreneurial. We are not held back by any
traditional approach - instead our team is youthful and energetic and
excited by the potential of being a part of fast growing, flexible company
with an ambition to become a much larger business.
With Jersey as our base, we believe we are ideally placed to capture a growing
number of upcoming younger investors in Jersey where there is
over-concentration of private wealth. We also intend to grow our international
client base including the ex-pat communities across Europe and further afield,
an attractive market by demographics and wealth and one which we believe is
currently significantly under-served in terms of accessing professional
financial advice.
Mr M C Moore
CFO and COO
21 June 2022
Unaudited Consolidated Statement of Comprehensive Income
6 months ended 6 months ended
31 Mar 2022 31 Mar 2021
Note £'000 £'000
Revenues 2 999 610
Cost of sales (230) (41)
Operating expenses (1,469) (1,504)
Operating loss (700) (935)
Operating loss before exceptional items (646) (467)
Exceptional items 3 (54) (468)
Operating loss after exceptional item (700) (935)
Other income and charges (10) 2
Loss on ordinary activities before tax (710) (933)
Taxation 29 12
Loss for the year/ period and total comprehensive (681) (921)
loss
Loss per share (basic and diluted) (0.08) (0.17)
Unaudited Consolidated Statement of Financial Position
6 months ended 31 Mar 2022 6 months ended 31 Mar 2021
Note £'000 £'000
Non-current assets
Intangible assets 3,516 936
Property, plant & equipment 501 522
Deferred tax 118 56
Long term deposit 55 55
4,190 1,569
Current assets
Trade, other receivables and prepayments 545 366
Cash and cash equivalents 3,013 6,404
3,558 6,770
Trade and other payables: amounts falling due within one year (360) (206)
Net current assets 3,198 6,564
Total assets less current liabilities 7,388 8,133
Trade and other payables: amounts falling due after one (446) (463)
year
Net assets 6,942 7,670
Equity
Stated Capital 4 9,791 9,053
Retained loss (2,849) (1,383)
Total Equity 6,942 7,670
The condensed consolidated interim financial statements were approved and
authorised for issue by the board of the directors on the 21 June 2022 and
were signed on its behalf by:
Mr J M
Clubb
Mr M C Moore
Executive
Chair
CFO and COO
Unaudited Consolidated Statement of Changes in Equity
Share Share Stated Retained
capital premium capital loss Total
£'000 £'000 £'000 £'000 £'000
At 1 October 2021 - - 9,606 (2,168) 7,438
New share capital - - 185 - 185
Loss for the year - - - (681) (681)
At 31 March 2022 - - 9,791 (2,849) 6,942
Share Share Stated Retained
capital premium capital loss Total
£'000 £'000 £'000 £'000 £'000
At 1 October 2020 9 1,823 - (462) 1,370
New share capital - 163 - - 163
Cost of shares issued through IPO - (443) - - (443)
Conversion of shares (9) (1,543) 1,552 - -
Share premium received from IPO - - 7,501 - 7,501
Loss for the period - - - (921) (921)
At 31 March 2021 - - 9,053 (1,383) 7,670
Unaudited Consolidated Statement of Cash Flows
6 months ended 6 months ended
31-Mar-22 31-Mar-21
Note £'000 £'000
Cash flows from operating activities
Loss for the year before tax (710) (933)
Adjustments to cash flows from non-cash items:
Depreciation and amortisation 264 85
Finance costs 10 (2)
Trade and other receivables (18) (63)
Trade and other payables (deferred payments) (1,410) (115)
Net cash outflow from operating activities (1,864) (1,028)
Cash flows from investing activities
Acquisition of property, plant and equipment (9) (8)
Net cash outflow from investing activities (9) (8)
Cash flows from financing activities
Lease liability paid (35) (34)
IPO costs capitalised - (443)
Issue of share capital at no par - 7,501
Share premium on issue of shares - 163
Net cash flow from financing activities (35) 7,187
Net increase in cash and cash equivalents (1,908) 6,151
Cash and cash equivalents from at beginning of year/ period 4,921 253
Cash and cash equivalents from acquired subsidiaries - -
Cash and cash equivalents at end of year/ period 3,013 6,404
Notes to the Consolidated Financial Statements
1. Accounting policies
Basis of preparation and accounting policies
The accounting policies and estimates adopted are consistent with those of the
previous financial period as disclosed in the 2021 Report and Audited
Consolidated Financial Statements.
The financial information in this interim report has been prepared in
accordance with the disclosure requirements of the AIM Rules for Companies and
the recognition and measurements of International Financial Reporting
Standards ("IFRS"), as adopted by the European Union ("EU"). They have been
prepared on a going concern basis with reference to the accounting policies
and methods of computation and presentation set out in the Group's
Consolidated financial statements for the year ended 30 September 2021.
The Interim Condensed consolidated financial statements do not include all the
information and disclosures required in the annual financial statements and
should be read in conjunction with the Group's audited financial statements
for the year ended 30 September 2021, which have been prepared in accordance
with International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB"), the interpretations issued
by the International Financial Reporting Interpretations Committee ("IFRIC")
and the requirements of Companies (Jersey) Law 1991.
The information relating to the six months ended 31 March 2022 is unaudited
and does not constitute statutory financial statements. The Group's
Consolidated financial statements for the year ended 30 September 2021 have
been reported on by the Group's auditor. The report of the auditor was
unqualified and did not draw attention to any matters by way of emphasis.
Consolidated financial statements
The consolidated financial statements incorporate the financial statements of
the Company and subsidiary entities controlled by the Company made up to 31
March 2022. Control is achieved where the Company is exposed, or has rights,
to variable returns from its involvement with an investee company and has the
ability to affect those returns through its power over the other entity; power
generally arises from holding a majority of voting rights.
New standards and interpretations not yet adopted
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements will be consistent with those to be followed
in the preparation of the Group's annual financial statements for the year
ending 30 September 2022.
Going concern
After making enquiries, the Directors have formed a judgement, at the time of
approving the financial statements, that there is a reasonable expectation
that the Group has adequate resources to continue in operational existence for
the foreseeable future. For this reason the Directors continue to adopt the
going concern basis in preparing the financial statements.
The Directors have considered the impact of COVID-19 on the Group and are of
the view that it remains a going concern after revising forecasts for the
period to September 2023 and reviewing the impact of COVID-19 on the working
capital of the Group.
Critical accounting estimates and judgements
The Group makes certain estimates and assumptions in the preparation of
financial statements. Estimates and judgements are continually evaluated based
on historical experience and other factors, including expectations of future
events that are believed to be reasonable that best reflects the conditions
and circumstances that exist at the reporting date.
The principal estimates and judgements that could have an effect upon the
Group's financial results are the useful economic lives of property, plant and
equipment, the impairment of trade receivables and intangible assets and the
provision for income and deferred taxes. Further details of these estimates
and judgements are set out in the related accounting policies for these items.
2. Operating Segments
IFRS 8 operating segments are to be identified on the basis of internal
reports about components of Group that are regularly reviewed by management
to allocate resources to the segments and to assess their performance. The
Group continues to identify a single reportable segment, this is likely to
change with the completion of the two most recent transaction. Within this
single reportable segment, total revenue for the year from continuing
operations is as follows;
6 months 6 months
31 Mar 2022 31 Mar 2021
(unaudited) (unaudited)
£'000 £'000
Revenue
Fees 491 541
Commissions 260 69
Cash and risk management 208 -
Other revenue 40 -
999 610
Notes to the Consolidated Financial Statements
3. Exceptional items
6 months 6 months
31 Mar 2022 31 Mar 2021
(unaudited) (unaudited)
£'000 £'000
IPO and acquisition related costs 54 468
54 468
Acquisition costs in the period relate to legal advice for the acquisition of
Omega, and financial advice for other transactions that did not complete.
4. Stated capital
31 Mar 2022 31 Mar 2021
(unaudited) (unaudited)
No. No.
Allotted, called and fully paid shares
Ordinary shares 17,559,478 16,559,334
31 Mar 2022 31 Mar 2021
(unaudited) (unaudited)
£'000 £'000
Allotted, called and fully paid share capital
Opening balance - 9
Ordinary share capital of £0.10 each - -
Transferred - (9)
- -
31 Mar 2022 31 Mar 2021
(unaudited) (unaudited)
£'000 £'000
Share Premium
Opening balance - 1,823
Premium in year - 163
Cost of shares issued through IPO - (443)
Transferred - (1,543)
- -
Notes to the Consolidated Financial Statements
4. Stated capital (continued)
31 Mar 2022 31 Mar 2021
(unaudited) (unaudited)
£'000 £'000
Stated capital
Opening balance 9,606 -
Transferred - 1,552
Share premium received from IPO - 7,501
New Capital subscribed 185 -
9,791 9,053
The increase in Stated capital reflects the equity component of the deferred
consideration paid to the JCAP shareholders.
5. Earnings per share
The Group has calculated the weighted-average number of outstanding ordinary
shares for the period as follows:
Number of shares Time weighting Weighted average number of shares
Weighted Average Number of Shares 2022
Balance brought forward 17,299,795 6/12 8,649,898
28 February - 31 March 2022 259,683 1/12 21,640
17,559,478 6 months 8,671,538
Number of shares Time weighting Weighted average number of shares
Weighted Average Number of Shares 2021
Balance brought forward 93,000 6/6 93,000
19 October 2020 - Shares issued 3,600 5/6 3,000
6 January 2021 - Shares issued 900 3/6 450
6 January 2021 - Bonus issue 7,897,500 3/6 3,948,750
6 January 2021 - Shares issued 41,000 3/6 20,550
8 March 2021 - IPO 8,523,334 1/6 1,420,556
16,559,334 6 months 5,486,256
Notes to the Consolidated Financial Statements
5. Earnings per share (continued)
Loss per share
31 Mar 2022 31 Mar 2021
Loss per share
Loss for the financial period and total comprehensive loss (£'000) (681) (921)
Weighted average number of shares 8,671,538 5,486,256
Pence per share (0.08) (0.17)
The Parent Company does not have any contingent issuable shares as at year
end, hence diluted loss per share is the same as the basic loss per share
Adjusted Loss per share
6 months 6 months
31 Mar 2022 31 Mar 2021
(unaudited) (unaudited)
£'000 £'000
Loss after tax (681) (921)
Interest 10 (2)
Tax (29) (12)
Depreciation 35 32
Amortisation of intangible assets 229 53
EBITDA (436) (850)
IPO related expenses - 443
Acquisition related expenses 54 25
Adjusted EBITDA (382) (382)
31 Mar 2022 31 Mar 2021
(unaudited) (unaudited)
Adjusted loss per share
Adjusted EBITDA (£'000) (382) (382)
Weighted average number of shares 8,671,538 5,486,256
Pence per share (0.04) (0.07)
Notes to the Consolidated Financial Statements
6. Dividends
No interim dividend has been paid or proposed in respect of the current
financial period (2021: nil).
7. Events after the statement of financial position date
On 12 May 2022, TEAM exchanged contracts with the shareholders of Concentric
Group Limited to acquire 100% of the issued and to be issued share capital of
the business for up to £2.5 million. Completion is conditional on the
approval of the change in controller by the local regulator, the Jersey
Financial Services Commission. Approval for the change in controller for Omega
Financial Services Limited is also awaited.
On the same date it completed a share subscription with existing and new
shareholders, at a price of 60 pence per share (a 5.5% discount to the closing
mid-market price), for 4,416,667 share, which raised gross proceeds of £2.65
million, which net of costs were £2.53 million. This is to be used to fund
the cash consideration for Concentric, and support working capital for the
TEAM plc group.
Company number
129405
Brokers and nominated adviser
Canaccord Genuity Limited
88 Wood Street London
EC2V 7QR
United Kingdom
Financial adviser
Hannam & Partners
2 Park Street
London
W1K 2HX
Bankers
Butterfield Bank (Jersey) Ltd
St Paul's Gate
New Street
St Helier
Jersey J
E4 5PU
Registered office
6 Caledonia Place
St Helier
Jersey
JE2 3NG
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