Last checked at 26 Nov 2015 07:00
Tavistock Investments Plc
Unaudited Interim Results for the six months ended 30 September 2015
26 November 2015
Tavistock investments Plc ("Tavistock" or "Company") is pleased to report on the significant progress that the Company has made during the six month period to 30 September 2015.
Advisory Business
In May 2015, we completed the acquisition of Duchy Independent Financial Advisers Ltd, an IFA business with offices in Truro and in St Ives in Cornwall. This business will become the hub for the further development of the Group's network in the West Country.
Over the nine months since the acquisition of the Financial Group, a considerable amount of management time has been devoted to the integration of that business into the wider Tavistock Group. Having first conducted a risk assessment of all members of Financial's advisory network, with the full knowledge and sanction of the FCA, we transferred the significant majority of those advisers into a newly created network within the Group called Tavistock Financial. Those advisers who were not transferred have now left the Group.
As a consequence of this activity, Tavistock has now established a network of 270 self-employed financial advisers, covering most parts of the UK and servicing some 60,000 clients whose assets are estimated to exceed £3 billion in value.
We have also transferred all of Financial's support staff and operations across to Tavistock Financial and as a result of the reorganisation, we have been able to reduce the running costs of this business by some £1 million per annum. Consequently, Tavistock Financial is already making a positive contribution to the Group's results.
The last step in the integration process was to secure the cancellation of the regulatory permissions for Financial Limited and Investments Limited from the FCA and to place these two companies, together with their immediate holding company, Standard Financial Group Limited, into a members' voluntary solvent liquidation.
Investment Management Business
The Group's investment service, managed by Tavistock Wealth, is for use by the Group's advisers where they deem it suitable for their clients. I am pleased to report that investment performance has been good during the period under review, against a backdrop of difficult market conditions, and that more than 2,000 clients now invest with us.
Tavistock Wealth offers an extensive range of risk progressive investment portfolios (called PROFILES), that are either managed exclusively in-house, or run jointly with a range of partners that include Smith & Williamson, Bordier & Cie, Kleinwort Benson and BlackRock (the largest asset manager in the world). A key benefit of our close relationship with BlackRock is access to Aladdin - probably the world's most powerful risk management system, analysing $15 trillion across 33,000 portfolios every minute. The fact that BlackRock is willing to publicly align itself with our investment management service is a significant endorsement of our business.
We have strong views on the ethics of our industry and regard the key benefits of our investment management proposition as competition, choice, cost and performance. All PROFILES are managed to targeted volatility (risk) ranges and provide multi-asset, global coverage across a combination of actively managed strategies and passive index trackers. All underlying holdings are UCITS IV compliant - the "gold standard" of pan European regulation.
We have also taken steps to widen access to our PROFILES and these are now available for investment, in whole or in part, on sixteen different trading platforms. Training and accreditation of Tavistock Financial's advisers in the use of Tavistock Wealth's investment service is now well underway, and we look forward to taking on investment mandates for those of their clients for whom they believe the service is appropriate.
Financial Performance
The results for the period under review have inevitably been adversely impacted by the losses generated by Financial Group's now discontinued business activities. However, as the integration process has now been completed, we can look forward to reporting improved trading results in the second half of the year. For the period under review the Group has reported total revenues of £15,960,000 and an EBITDA loss, after £298,000 of share based payment charges, of £883,000. Of this amount £749,000 relates to discontinued operations and £134,000 relates to continuing operations, including centralised Group costs. In the period ended 30 September 2014, the Group reported revenues of £1,344,000 and an EBITDA loss of £684,000. As at 30 September 2015, the Group had net assets of £10,331,000 of which £4,019,000 was represented by cash (30 September 2014, net assets of £7,631,000 including cash of £273,000).
Current Status
With over £4 million of available cash resources, the Group is well placed to take advantage of the opportunities that it has to further develop the business. The Company's share price has almost trebled in the nine months since its last fundraising in February 2015, so it would therefore be reasonable to assume that the Company could access capital markets should it require to raise additional development funding. During the period under review we have investigated a number of potential acquisition opportunities, but none matched our strategic development criteria.
Employee Share Option Scheme
In October 2015, we widened the potential for share ownership to our staff through the issue of share options under the Company's EMI Share Option Scheme to all employees once they have been with the company for two years. A proportion of these options become capable of exercise after a further three years of employment with the Group and the balance become exercisable two years later.
Future Prospects
For the reasons explained, we can look forward to improved performance in the second half of this financial year. It remains our objective to introduce a dividend stream for the benefit of the Company's shareholders and the year to 31 March 2017 would currently appear to be the earliest practical opportunity of so doing.
I would like to take this opportunity to acknowledge and thank our staff for the considerable efforts that they have continued to make in the first half of the year and I look forward to updating shareholders on further progress in due course.
Oliver Cooke
Executive Chairman
Consolidated Income Statement
For the six months ended 30 September 2015
|
| 6 months to | 6 months to |
|
| 30 September 2015 | 30 September 2014 |
|
| (unaudited) | (unaudited) |
| Note | £'000 | £'000 |
|
|
|
|
Revenue |
|
|
|
- Continuing operations | 2 | 15,960 | 1,344 |
|
|
|
|
Cost of sales |
|
|
|
- Continuing operations |
| (12,650) | (881) |
|
| --------------- | --------------- |
Gross profit |
| 3,310 | 463 |
|
|
|
|
Administrative expenses |
|
|
|
- Continuing operations |
| (4,132) | (1,383) |
- Discontinued operations |
| (749) | - |
|
| --------------- | --------------- |
Loss from operations |
| (1,571) | (920) |
|
|
|
|
Reconciliation of earnings before interest, |
|
|
|
depreciation and amortisation (EBITDA) to loss from operations |
|
|
|
|
|
|
|
EBITDA |
|
|
|
- Continuing operations - Discontinued operations |
| (134) (749) | (684) - |
|
|
|
|
Depreciation and Amortisation |
| (688) | (236) |
|
| --------------- | --------------- |
Loss from operations |
| (1,571) | (920) |
|
|
|
|
Interest payable |
| (4) | - |
Finance income |
| 6 | - |
|
| --------------- | --------------- |
Loss before taxation for the period |
| (1,569) | (920) |
|
|
|
|
Taxation |
| 49 | 12 |
|
| --------------- | --------------- |
Loss after taxation and total comprehensive |
| (1,520) | (908) |
income for the year |
| ======= | ======= |
|
|
|
|
Loss per New Ordinary Share (pence) |
|
|
|
Basic |
| (0.61)p | (1.10)p |
Diluted |
| (0.56)p | (1.10)p |
|
| ======= | ======= |
Consolidated Statement of Financial Position
As at 30 September 2015
|
| As at | As at |
|
| 30 September 2015 | 30 September 2014 |
|
| (unaudited) | (unaudited) |
| Note | £'000 | £'000 |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
Tangible fixed assets |
| 56 | 32 |
Intangible assets | 4 | 12,030 | 10,121 |
|
| --------------- | --------------- |
|
| 12,086 | 10,153 |
|
|
|
|
Current assets |
|
|
|
Trade and other receivables |
| 4,635 | 917 |
Cash and cash equivalents |
| 4,019 | 273 |
|
| --------------- | --------------- |
|
| 8,654 | 1,190 |
|
| --------------- | --------------- |
|
|
|
|
|
|
|
|
Total assets |
| 20,740 | 11,343 |
LIABILITIES |
| --------------- | --------------- |
|
|
|
|
Non-current liabilities |
|
|
|
Deferred consideration |
| (3,435) | (2,222) |
Provisions |
| (3,477) | - |
Term loan |
| (250) | (250) |
Deferred taxation |
| (1,004) | - |
|
| --------------- | --------------- |
|
| (8,166) | (2,472) |
|
| --------------- | --------------- |
|
|
|
|
Current liabilities |
|
|
|
Trade and other payables |
| (1,529) | (422) |
Accruals |
| (714) | (818) |
|
| --------------- | --------------- |
|
| (2,243) | (1,240) |
|
| --------------- | --------------- |
|
|
|
|
Total liabilities |
| (10,409) | (3,712) |
|
| --------------- | --------------- |
|
|
|
|
Total assets less liabilities |
| 10,331 | 7,631 |
|
| ======= | ======= |
|
|
|
|
Equity |
|
|
|
Share capital |
| 10,262 | 8,567 |
Share premium |
| 20,688 | 18,962 |
Retained deficit |
| (20,619) | (19,898) |
|
| --------------- | --------------- |
Total equity |
| 10,331 | 7,631 |
|
| ======= | ======= |
Consolidated Cash Flow Statement
For the six months ended 30 September 2015
| 6 months to 30 September 2015 (unaudited) £'000 | 6 months to 30 September 2014 (unaudited) £'000 |
|
|
|
Cash flows from operating activities |
|
|
Loss from operations | (1,569) | (920) |
|
|
|
Adjustments for: |
|
|
Share based payments | 298 | 215 |
Taxation | 49 | 12 |
Depreciation | 18 | 6 |
Amortisation of intangible assets | 669 | 230 |
Finance income | (4) | - |
Finance cost | 6 | - |
| -------------- | -------------- |
| (533) | (457) |
Cash flows from operating activities before changes in |
|
|
working capital |
|
|
Increase in receivables | (84) | (96) |
(Decrease)/increase in liabilities | (201) | (227) |
| -------------- | -------------- |
Net cash used in from operating activities | (818) | (780) |
| -------------- | -------------- |
Cash flows from investing activities |
|
|
|
|
|
Finance income | 4 | - |
Finance cost | (6) | - |
Net cash on acquisition of subsidiary | (171) | 397 |
Purchase of property, plant and equipment | (5) | (38) |
Proceeds on disposal of intangible assets | - | - |
Cash on acquisition | 276 | 125 |
| -------------- | -------------- |
Net cash generated from investing activities | 98 | 484 |
| -------------- | -------------- |
Cash flows from financing activities |
|
|
|
|
|
Proceeds from issue of share capital | - | 340 |
| -------------- | -------------- |
Net cash generated from financing activities | - | 340 |
| -------------- | -------------- |
|
|
|
Net (decrease)/increase in cash and cash equivalents | (720) | 44 |
|
|
|
Cash and cash equivalents at beginning of period | 4,739 | 229 |
| -------------- | -------------- |
Cash and cash equivalents at end of period | 4,019 | 273 |
| ====== | ====== |
|
|
|
Consolidated Statement of Changes in Equity
For the six months ended 30 September 2015
|
| Share | Share | Retained |
|
|
| Capital | Premium | Earnings | Total |
|
| £'000 | £'000 | £'000 | £'000 |
|
|
|
|
|
|
As at 31 March 2014 |
| 7,471 | 11,888 | (19,205) | 154 |
|
| -------------- | ----------------- | ---------------- | --------------- |
|
|
|
|
|
|
Shares issued |
| 1,096 | 7,074 | - | 8,170 |
Loss after tax |
|
|
|
|
|
and total comprehensive |
|
|
|
|
|
income |
| - | - | (908) | (908) |
Share based payment |
| - | - | 215 | 215 |
|
| -------------- | ----------------- | ---------------- | --------------- |
As at 30 September 2014 |
| 8,567 | 18,962 | (19,898) | 7,631 |
|
| -------------- | ----------------- | ---------------- | --------------- |
|
|
|
|
|
|
Shares issued |
| 1,678 | 1,614 | - | 3,292 |
Profit after tax |
|
|
|
|
|
and total comprehensive |
|
|
|
|
|
income |
| - | - | 237 | 237 |
Share based payment |
|
|
| 264 | 264 |
|
| -------------- | ----------------- | ---------------- | --------------- |
As at 31 March 2015 |
| 10,245 | 20,576 | (19,397) | 11,424 |
|
| -------------- | ----------------- | ---------------- | --------------- |
|
|
|
|
|
|
Shares issued |
| 17 | 112 | - | 129 |
Loss after tax |
|
|
|
|
|
and total comprehensive |
|
|
|
|
|
income |
| - | - | (1,520) | (1,520) |
Share based payment |
| - | - | 298 | 298 |
|
| -------------- | ----------------- | ---------------- | --------------- |
As at 31 September 2015 |
| 10,262 | 20,688 | (20,619) | 10,331 |
|
| -------------- | ----------------- | ---------------- | --------------- |
Notes to the Interim Results for the six months ended 30 September 2015
1. Basis of preparation
The Interim Results for the six months ended 30 September 2015 have been prepared and presented in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. 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 period ended 31 March 2015, except as stated below.
The information in this announcement does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group's accounts for the period ended 31 March 2015 have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors, dated 24 August 2015 was unqualified.
2. Segmental information
The Group provides financial advisory and investment management services in the UK. A segmental analysis of revenue and expenditure for the period is:
Period Ended 30 September 2015 | Investment Management £'000 | Advisory Support £'000 | Total £'000 |
Revenue - fees and commissions | 481 | 15,479 | 15,960 |
Cost of Sales | (233) | (12,417) | (12,650) |
Administrative Expenses (including Plc costs) | (329) | (3,803) | (4,132) |
Discontinued operations | - | (749) | (749) |
Period Ended 30 September 2014 | Investment Management £'000 | Advisory Support £'000 | Total £'000 |
Revenue - fees and commissions | 59 | 1,285 | 1,344 |
Cost of Sales | (54) | (827) | (881) |
Administrative Expenses (including Plc costs) | (24) | (1,359) | (1,383) |
Discontinued operations | - | - | - |
All of the Group's turnover and assets are UK based.
3. | Loss per share | 6 months to | 6 months to |
|
| 30 September 2015 | 30 September 2014 |
|
| (unaudited) | (unaudited) |
|
|
|
|
| Loss per New Ordinary Share has been calculated as follows: |
|
|
|
|
|
|
| Loss (£'000) | (1,520) | (908) |
| Weighted average number of New Ordinary Shares ('000s) | 252,988 | 82,242 |
| Diluted average number of New Ordinary Shares ('000s) | 270,338 | 82,712 |
|
| ------------------ | ------------------ |
|
|
|
|
| Basic loss per New Ordinary Share | (0.61)p | (1.10)p |
| Diluted loss per New Ordinary Share | (0.56)p | (1.10)p |
|
| ------------------ | ------------------ |
Loss per New Ordinary Share has been calculated using the weighted average number of shares in issue during the relevant financial periods, adjusted for the consolidation of shares in May 2014.
4. | Intangible assets | Regulatory Approvals | Customer & Adviser | Goodwill Arising on |
|
|
| & Systems | Relationships | Consolidation | Total |
|
| £'000 | £'000 | £'000 | £'000 |
|
|
|
|
|
|
| Cost |
|
|
|
|
|
|
|
|
|
|
| Balance at 31 March 2014 | - | - | - | - |
|
| --------------- | ---------------- | --------------- | -------------- |
| Additions | 950 | 2,500 | 6,902 | 10,352 |
|
| --------------- | ---------------- | --------------- | -------------- |
| Balance at 30 September 2014 | 950 | 2,500 | 6,902 | 10,352 |
|
| --------------- | ---------------- | --------------- | -------------- |
| Additions | 400 | 2,091 | 716 | 3,207 |
|
| --------------- | ---------------- | --------------- | -------------- |
| Balance at 31 March 2015 | 1,350 | 4,591 | 7,618 | 13,559 |
|
| --------------- | ---------------- | --------------- | -------------- |
| Additions | 50 | 250 | 60 | 360 |
| Disposals | - | (394) | - | (394) |
|
| --------------- | ---------------- | --------------- | -------------- |
| Balance at 30 September 2015 | 1,400 | 4,447 | 7,678 | 13,525 |
|
| --------------- | ---------------- | --------------- | -------------- |
|
|
|
|
|
|
| Accumulated amortisation |
|
|
|
|
|
|
|
|
|
|
| Balance at 31 March 2014 | - | - | - | - |
|
| --------------- | ---------------- | --------------- | -------------- |
| Amortisation | 167 | 64 | - | 231 |
|
| --------------- | ---------------- | --------------- | -------------- |
| Balance at 30 September 2014 | 167 | 64 | - | 231 |
|
| --------------- | ---------------- | --------------- | -------------- |
| Impairment charge | - | 26 | 205 | 231 |
| Amortisation | 266 | 98 | - | 364 |
|
| --------------- | ---------------- | --------------- | -------------- |
| Balance at 31 March 2015 | 433 | 188 | 205 | 826 |
|
| --------------- | ---------------- | --------------- | -------------- |
| Amortisation | 230 | 439 | - | 669 |
| Disposals | - | - | - | - |
|
| --------------- | ---------------- | --------------- | -------------- |
| Balance at 30 September 2015 | 663 | 627 | 205 | 1,495 |
|
| --------------- | ---------------- | --------------- | -------------- |
| Net book value |
|
|
|
|
| At 30 September 2014 | 783 | 2,436 | 6,902 | 10,121 |
|
| --------------- | ---------------- | --------------- | -------------- |
| At 31 March 2015 | 917 | 4,403 | 7,413 | 12,733 |
|
| --------------- | ---------------- | --------------- | -------------- |
| At 30 September 2015 | 737 | 3,820 | 7,473 | 12,030 |
|
| --------------- | ---------------- | --------------- | -------------- |
5. | Share Capital | 30 September | 30 September |
|
| 2015 | 2014 |
|
| £'000 | £'000 |
| Called up share capital |
|
|
|
|
|
|
| Allotted, called up and fully paid |
|
|
|
|
|
|
| 291,348,639 New ordinary shares of 1p | 2,913 |
|
| (30 September 2014, 121,822,496 Ordinary shares of 1p) |
| 1,218 |
|
|
|
|
| 10,000,000 Ordinary "A" shares of 0.01p | 1 | 1 |
|
|
|
|
| 30,450,078 Deferred shares of 9p each | 2,741 | 2,741 |
|
|
|
|
| 465,344,739 Deferred "A" shares of 0.99p | 4,607 | 4,607 |
|
| ------------- | ---------------- |
|
| 10,262 | 8,567 |
|
| ------------- | ---------------- |
|
|
|
|
6. Events after the balance sheet date
Significant events after the balance sheet date have been referred to in the Chairman's Statement.
For further enquiries, please contact:
Tavistock Investments plc
Oliver Cooke, Chairman
Brian Raven, Chief Executive Tel: 01753 867000
Northland Capital Partners Limited
William Vandyk / Matthew Johnson Tel: 020 7382 1100
WH Ireland Limited
Tim Feather / Mark Leonard Tel: 020 7220 1660
Templars Communications Ltd
Kitty Parry / Kate Boothman-Meier Tel: 020 3642 3140
Notes to editors:
Tavistock Investments Plc
Tavistock Investments Plc is an AIM listed financial services group. Key group companies are: Tavistock Partners and Tavistock Financial which both provide compliance, administration and accounting services to the Group's independent financial advisers; and Tavistock Wealth which manages the Group's Centralised Investment Proposition (CIP) combining active and passive strategies across in-house and externally managed mandates. Tavistock has 270 advisers supported by the Group and an estimated £3 billion in assets under advice.