Tavistock Investment

Interim Results

RNS Number : 5810U
Tavistock Investments PLC
06 December 2021
 

Tavistock Investments Plc

("Tavistock", "The Group" or the "Company")

Interim accounts 

6 December 2021

 

Tavistock (AIM:TAVI) is pleased to announce its unaudited financial results for the six months ended 30 September 2021.

 

The Company also announces that copies of the interim results will be posted to shareholders today. A copy of the interims together with an accompanying letter from the Chairman will shortly be made available on the Company's website ( https://tavistockinvestments.com/ ).

 

Financial highlights 

Group

· Net assets of £49.8 million (31 March 2021: £15.0 million)

· Initial £20.0 million of consideration from sale of Tavistock Wealth Limited ("TWL") to Titan Wealth Holdings Limited ("Titan") received in August 2021

Proceeds have enabled the Company to:

§ Repay all its outstanding borrowings of £3.53 million

§ Buy back and cancel 4.7% of the Company's issued share capital - enhancing earnings per share and intrinsic value of shares remaining in issue

§ Pay an interim dividend of 0.05p per share, five times higher than maiden dividend (2019: 0.01p per share)

§ Increase the net asset value per share to 8.6p (31 March 2021: 3p)

· Revenues up 27% at £17.0 million (H1 2020: £13.4 million)

· Adjusted EBITDA 13% lower at £1.1 million (H1 2020: £1.3 million) due to the one-off impact of staff salary sacrifice and government furlough support during H1 2020 and disposal of TWL in August 2021

· Profit before tax at £35.5 million (H1 2020: £416k loss), including present day value of the profit arising from the disposal of TWL to Titan

 

Advisory business

· 37% increase in revenues to £14.7 million (H1 2020: £10.7 million)

Advisory revenues anticipated to exceed total Group revenues for the full financial year 2020

· Contribution to Group adjusted EBITDA up 56% to £1.5 million (H1 2020: £0.96 million)

· Continued recognition of best -in-class client service with Tavistock Private Client Limited acknowledged as Best Financial Planning and Wealth Management Firm in England at SME News' Finance Awards 2021

 

Investment Management business

· 13% reduction in revenues to £2.4 million (H1 2020: £2.7 million) and 6% reduction in EBITDA to £1.6 million (H1 2020: £1.7 million) due to the Group benefitting from only five months' contribution from the investment management business prior to completion of the sale to Titan

 

Brian Raven, Tavistock's Chief Executive, said: "The strategic partnership with Titan and sale of TWL has transformed the shape of the business and its prospects. It has enabled the delivery of immediate enhancement in value to shareholders while providing the Company with the firepower to accelerate the growth of the business through acquisitions, with some exciting prospective targets already being considered.

 

"In addition, our advisory business continues to perform strongly and is already on track to deliver revenues ahead of the entire Group revenues in the prior year. We are in a strong position to continue developing a much larger and more profitable distribution and wealth management group, to deliver enhanced value to shareholders."

 

For further information

Tavistock Investments Plc

Oliver Cooke

Brian Raven

 

Tel: 01753 867000

Allenby Capital Limited

(Nominated adviser and broker)

Corporate Finance:

Nick Naylor, Nick Athanas, Liz Kirchner

Sales and Corporate Broking:

Tony Quirke

 

Tel: 020 3328 5656

Powerscourt

Gilly Lock

Chloe Retief

 

Tel: 07711 380 007

  020 7250 1446

 

TAVISTOCK INVESTMENTS PLC

CHAIRMAN'S STATEMENT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

 

In the period under review the Board successfully concluded a fundamental transformation of the Company's standing and prospects.

This was achieved by entering into a ten-year strategic partnership with Titan Wealth Holdings Limited ("Titan"). As a part of the partnership arrangements, Titan acquired the Group's investment management business, Tavistock Wealth Limited ("TWL"), for a consideration of up to £40 million, in cash, together with a ten-year revenue sharing earn out. The cash element of the transaction alone was equivalent to more than 2.5 times the Company's market capitalisation immediately prior to the announcement of the deal.

The initial £20 million of the consideration was received at the end of August 2021, when the transaction was formally completed. The balance of the consideration of up to a further £20 million is payable in cash in annual instalments over the next three years, linked to the maintenance of TWL's revenues.

This transaction has enabled the Company to:

· repay £3.53 million to its bankers, NatWest, in full satisfaction of all outstanding borrowings;

· buy back and cancel 4.7% of the Company's issued share capital, thereby enhancing the earnings per share and thus the intrinsic value of all the shares remaining in issue;

· pay an interim dividend to shareholders five times higher than the maiden dividend paid to them in 2019; and

· increase the net asset value per share from under 3p at the end of March 2021 to over 8p at 30 September 2021.

The Company is now well positioned to increase the scale of its business through both continued organic growth and an accelerated acquisition programme without significant further dilution for shareholders.

Several potential acquisitions are currently being considered by the board.

Financial performance during the period

Revenues from financial advisory support have grown strongly in the period, up 37% on the same period last year to £14.7 million (2020: £10.7 million). It is anticipated that revenues from this area for the full financial year will exceed the total revenues reported by the Group in the last financial year.

The contribution to the Group's adjusted EBITDA from this area has also grown strongly in the period, up 56% on the same period last year to £1.5 million (2020: £0.96 mill). Adjusted EBITDA is considered by the board to be the most appropriate measure of the Group's performance because it removes the distorting effect of one-off gains and losses from acquisitions, as well as the impact of non-cash items.

The dedicated manner in which the Group's advisers look after the interests of their clients is continuing to gain recognition within the financial services industry. One of the Group's advisory businesses, Tavistock Private Client Limited, has recently been acknowledged as the Best Financial Planning and Wealth Management Firm in England at the SME News' Finance Awards 2021.

Revenues from the Group's investment management business were 13% down on last year at £2.4 million (2020: £2.7 million) and the contribution to the Group's adjusted EBITDA was down 6% on last year to £1.6 million (2020: £1.7 million). This was because the Group only benefitted from five month's contribution from its investment management business (prior to completion of the sale to Titan) during the period under review, compared to a full six months' contribution during the same period last year.

The Group's revenues, at £17 million, were 27% higher than in the same period last year (2020: £13.4 million) and its adjusted EBITDA for the period, at £1.1 million, was 13% lower than the same period last year (2020: £1.3 million). However, it should be noted that in the comparable period last year the Group benefited from approximately £400k of staff salary sacrifice and government furlough support, as well as a further £460k of revenue from its investment management business. Thus, on a like for like basis the Group's performance continues to improve.

The reported profit before tax, after providing for the Group reorganisation project, depreciation and amortisation and share based payments, was £35.5 million (6 months to September 2020: £416k loss). This result includes the present-day value of the profit arising from the disposal of TWL to Titan.

At 30 September 2021, the Company had net assets of £49.8 million (31 March 2021: £15 million), which was equivalent in value to approximately 8.6 pence per share based on the number of shares then in issue. This figure included cash resources of £17.2 million (31 March 2020: £4.5 million) after further purchases of client books, repayment of all bank debt, the payment of the interim dividend to shareholders and the buy-back and cancellation of 4.7% of the Company's issued share capital.

The Group's results can be summarised as follows:


6 Months ended

30 Sept '21

£'000s

6 Months ended

30 Sept '20

£'000s

Change on last year's equivalent period

Gross revenues

17,043

13,380

27% increase

Reported adjusted EBITDA

1,095

1,260

13% decrease

Depreciation & Amortisation

(467)

(326)

43% increase

One off costs of restructuring programme 

(500)

(1,200)

58% decrease

Share based payments

(269)

(13)


Reported (Loss) from operations before disposal of TWL

(141)

(279)

49% decrease

Profit on disposal of TWL

35,786

-

-

Profit/(Loss) from operations

35,645

(279)

-

Profit/(Loss) per share

5.85p

(0.07p)

-

Net assets

49,817

14,988

215% increase

Including cash and cash equivalents

17,171

3,974

332% increase

 

Post Balance Sheet events

The Board received confirmation that the disposal of TWL to Titan qualifies for Substantial Shareholding Exemption ("SSE").  As a consequence, no tax charge will be incurred on receipt of the consideration of up to £40 million in cash. This is clearly of significant benefit to the Company as in the absence of the SSE, the transaction might have given rise to a tax charge of approximately £7 million.

Future prospects

The Board's focus is on the continued increase in shareholder value. It intends to accomplish this by delivering a growing dividend stream, completing further share buy-backs and building a much larger and more profitable business.

I look forward to updating shareholders in due course.

Oliver Cooke

Chairman

[6]th December 2021

 



 

TAVISTOCK INVESTMENTS PLC

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

 



Unaudited

Unaudited



6 months ended

6 months ended



30 September

30 September



2021

2020


Note

£'000

£'000





Revenue

2

17,043

13,380





Cost of sales


(10,455)

(7,660)



------------

------------

Gross profit


6,588

5,720





Administrative expenses

2

(6,729)

(5,999)



--------------

--------------

Loss from operations before disposal


(141)

(279)





Present value of profit on disposal of Tavistock Wealth

4

35,786

-



--------------

--------------

Profit/(Loss) from operations


35,645

(279)





Memorandum:

Adjusted EBITDA


 

1,095

 

1,260

Depreciation & amortisation


(467)

(326)

One off costs of restructuring programme


(500)

(1,200)

Share Based Payments


(269)

(13)



--------------

--------------

Profit/(Loss) from operations before disposal


(141)

(279)





Finance costs


(115)

(115)

Profit share due to fellow member of LLP


(48)

(22)



------------

------------

Profit/(Loss) before taxation and attributable to equity holders of the parent

 

 

35,482

(416)





Taxation


-

-

 



------------

------------

Profit/(Loss) after taxation and attributable to equity holders of the parent and total comprehensive income for the period

 

 

35,482

(416)



======

======

Profit/(Loss) per share




Basic and Diluted

3

5.85p

(0.07)p



======

======

 

TAVISTOCK INVESTMENTS PLC 

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2021

 



Unaudited

Audited



30 September 2021

31 March 2021



£'000

£'000

£'000

£'000

ASSETS

 

 

 

 

 

Non-current assets

 

 

 

 

 

Tangible fixed assets



1,553


1,037

Intangible assets

5


16,499


17,703




-----------------


-----------------

Total non-current assets

 

 

18,052

 

18,740

 

 

 

 

 

 

Current assets

 

 

 

 

 

Trade and other receivables

4

22,580


3,286


Cash and cash equivalents


17,171


4,457




-----------------


-----------------


Total current assets



39,751


7,743




-----------------


-----------------

Total assets



57,083


26,483







LIABILITIES












Current liabilities



(5,748)


(5,445)







Non-current liabilities






Loan & Lease liability



(655)


(3,297)

Payments due regarding purchase of client lists



(523)


(928)

Provisions



(812)


(831)

Deferred taxation



(249)


(249)




------------------


------------------

Total liabilities



(7,987)


(10,750)




------------------


------------------

Total net assets



49,817


15,733




=========


=========

Capital and reserves attributable to owners






of the parent






Share capital

6


5,792


6,079

Capital Repayment Reserve



287


-

Share premium



1,541


1,541

Retained earnings



42,197


8,113




------------------


------------------

Total equity



49,817


15,733




=========


=========

 

TAVISTOCK INVESTMENTS PLC 

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

 


Share capital

Share premium

Capital repayment reserve

Retained earnings

Total equity


£'000

£'000

£'000

£'000

£'000







31 March 2020

13,426

6,001

-

(4,023)

15,404







Loss after tax and total comprehensive income

-

-

-

(429)

(429)







Equity settled share-based payments

-

-

-

13

13







Dividend payment

-

-

-

-

-


-------------

--------------

-------------

---------------

--------------

30 September 2020

13,426

6,001

-

(4,439)

14,988


--------------

--------------

-------------

--------------

--------------







Bfwd reserves of previously unconsolidated subsidiary

-

-

-

(181)

(181)







Capital reduction

(7,347)

(4,460)

-

11,807

-







Profit after tax, adjustments and total comprehensive income

-

-

-

1,221

1,221







Equity settled share-based payments

-

-

-

(295)

(295)








--------------

--------------

--------------

--------------

--------------

31 March 2021

6,079

1,541

-

8,113

15,733


--------------

--------------

-------------

--------------

--------------

 

Profit after tax and total comprehensive income

-

-

-

35,482

35,482

 

Buy back of shares

(287)

-

287

(1,365)

(1,365)







Dividend payment

-

-

-

(302)

(302)







Equity settled share-based payments

-

-

-

269

269


--------------

--------------

--------------

--------------

--------------

30 September 2021

5,792

1,541

287

42,197

49,817


--------------

--------------

--------------

--------------

--------------

 

 

TAVISTOCK INVESTMENTS PLC

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

 


Unaudited

Unaudited


6 months ended

30 September 2021

6 months ended  30 September 2020


£'000

£'000

£'000

£'000

Cash flows from operating activities

 

 

 

 

Loss before tax excluding gain on sale of Tavistock Wealth

 

Adjustments for:

 


(304)


(416)

Share based payments


269


13

Depreciation on fixed assets


337


233

Amortisation of intangible assets


130


93

Provisions for one-off reorganisation costs


500


1,200

Net finance costs


115


115



-----------------


-----------------

Cash flows from operating activities before changes


1,047


1,238

in working capital










Increase in trade and other receivables


(19,235)


(2,328)

Increase in trade and other payables


961


2,380



-----------------


-----------------

Cash generated in operations


17,229


1,290






Investing activities





Present value of profit on disposal of Tavistock Wealth

35,786


-


Purchase of tangible fixed assets

(870)


(762)


Intangible assets - client lists and internally developed assets

(837)


(101)


Deferred consideration payments

(1,082)


(687)



-----------------


-----------------


Net cash used from investing activities


32,997


(1,550)






Financing activities





Finance costs

(115)


(115)


New loans

-


2,130


Leases

306


(135)


Loan repayments

(3,590)


(62)


Buy back of shares

(1,365)


-


Disposal of TWL Goodwill

2,010


-


Dividend payment

(302)


-



-----------------


-----------------


Net cash used for financing activities


(3,056)


1,818



-----------------


-----------------

Net increase in cash and cash equivalents


12,714


1,558






Cash and cash equivalents at beginning of the period


4,457


2,416



------------------


------------------

Cash and cash equivalents at end of the period


17,171


3,974



=========


=========

 

TAVISTOCK INVESTMENTS PLC

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

 

1.  ACCOUNTING POLICIES

Basis of preparation 

The interim condensed consolidated financial statements have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards (IFRS) and IFRIC interpretations issued by the International Accounting Standards Board (IASB) adopted by the UK.  

The accounts have been prepared in accordance with accounting policies that are consistent with the March 2021 Report and Accounts and that are expected to be applied in the Report and Accounts of the year ending 31 March 2022.


The financial information does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. Statutory accounts for Tavistock Investments Plc for the year ended 31 March 2021 have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. 

2.  SEGMENTAL INFORMATION

A segmental analysis of revenue and expenditure for the period is:


Investment Management

Advisory

Support

Group

(Plc)

Unaudited 30 September 2021

Unaudited 30 September 2020


£'000

£'000

£'000

£'000

£'000







Revenue

2,378

14,652

13

17,043

13,380







Cost of Sales

(226)

(10,229)

-

(10,455)

(7,660)







Administrative Expenses

(728)

(3,713)

(1,520)

(5,961)

(4,799)







Group

-

-

(768)

(768)

(1,200)





-------------

-------------

Loss from operations before disposal




(141)

(279)





======

======

 

The segmental analysis above reflects the parameters applied by the Board when considering the Group's monthly management accounts. The Directors do not consider a division of the statement of financial position to be appropriate or useful for the purposes of understanding the financial performance and position of the Group.

During the period under review the Group operated and earned revenue exclusively within the UK.

 

3.  EARNINGS PER SHARE



Unaudited

Unaudited

 



6 months ended

6 months ended

 



30 September 2021

30 September 2020

 


Profit/(Loss) per share has been calculated using the following:



 


Profit/(Loss) from continuing operations (£'000)

  35,482

(416)

 


Weighted average number of shares ('000s)

606,208

607,796

 



--------------

--------------

 


Basic profit/(loss) per ordinary share

  5.85p

  (0.07)p

 



======

======

 

4.  INTANGIBLE ASSETS




Regulatory

Goodwill

Internally




Client

Approvals

Arising on

Developed




Lists

& Systems

Consolidation

Assets

Total



£'000

£'000

£'000

£'000

£'000


Cost







Balance at 1 April 2021 (Audited)

9,185

-

14,751

2,481

26,417


Additions

315

-

367

159

841


Disposals

-

-

(1,916)

-

(1,916)



-------------

-------------

-------------

------------

---------------


Balance at 30 September 2021

9,500

-

13,202

2,640

25,342


(Unaudited)

-------------

-------------

------------

------------

---------------









Accumulated amortisation







Balance at 1 April 2021 (Audited)

7,242

-

235

1,238

8,715


Amortisation

118

-

-

10

129



------------

------------

-----------

------------

---------------


Balance at 30 September 2021

7,360

-

235

1,248

8,844


(Unaudited)

-----------

-----------

------------

------------

---------------









Net Book Value







At 1 April 2021 (Audited)

1,944

-

14,516

1,243

17,703



======

======

======

======

=======


At 30 September 2021

2,140

-

12,967

1,392

16,499


(Unaudited)

======

======

======

======

=======

 

5.  SHARE CAPITAL 



Unaudited

Audited



30 September 2021

31 March

2021



£'000

£'000


Called up share capital








Allotted, called up and fully paid








5,791,677 Ordinary shares of 1 pence each

5,792

6,079


(31 March 2021: 607,795,801)

 




Capital Repayment Reserve

287

-

 

 

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