Tavistock Regulatory News (TAVI)

Tavistock Investments Plc

Notice of Annual General Meeting, and

Notice of General Meeting

28 August 2020

Tavistock Investment Plc ("Tavistock" or the "Company") will hold its Annual General Meeting ("AGM") at 11.00 am on Wednesday, 23 September 2020.

The meeting will be held at the Company's offices at 1 Bracknell Beeches, Old Bracknell Lane, Bracknell, RG12 7BW. A formal notice convening the meeting has been sent to shareholders. A copy of the notice, together with a copy of the form of Proxy, can be found on the Company's website at: https://tavistockinvestments.com/announcements. However, based on current COVID-19 measures implemented by the Government in the United Kingdom SHAREHOLDERS WILL NOT BE PERMITTED TO ATTEND THE AGM. The Company will ensure that the meeting is quorate and that the legal requirements are met.

SHAREHOLDERS WISHING TO VOTE ON ANY OF THE MATTERS OF BUSINESS ARE STRONGLY URGED TO DO SO THROUGH COMPLETION OF THE FORM OF PROXY THAT HAS BEEN SENT TO THEM. A FURTHER COPY OF THE FORM OF PROXY CAN BE DOWNLOADED FROM THE COMPANY'S WEBSITE, AS DETAILED ABOVE.

If Shareholders have any questions or comments relating to the business of the meeting that they would like to ask the Board then they are asked to submit those questions in writing via email to AGM2020@tavistockinvestmentsplc.com no later than 11.00am on 21 September 2020. The Board will publish a summary of any questions received which are of common interest, together with a written response on the Company's website as soon as practicable after the conclusion of the meeting.

Following the AGM, the Company will hold a general meeting (the "GM") to consider a proposal that will facilitate the payment of dividends to shareholders.

The Company currently has negative distributable reserves and is therefore prohibited under the Companies Act from making distributions, including dividends, to its shareholders. This deficit arose predominantly as a consequence of the substantial impairment provision made in the Company's audited accounts for the year ended 31 March 2020 against the value of acquired intangible assets carried on its balance sheet at that date. Having conducted a specific review, the Board concluded that the acquired value of these assets, being that generated by the former owners of the business units, had been superseded by the input of the Group's current management team.

The Board therefore decided that it would be both prudent and appropriate for the amortisation of these assets to be accelerated so as to write the carrying value down to nil at the year-end date.

Consequently, a one-off impairment provision of some £5 million against the carrying value of these assets was put through the profit and loss account in the Company's last reported accounts. Having made this provision, the future amortisation charges relating to these assets will be reduced by approximately £1m per annum, which in turn will enable the Group's annual pre-tax profit to better reflect its current operational performance.

In light of the Group's continuing development, the Board believes it is an appropriate time to undertake a reorganisation of its balance sheet (the "Capital Reduction") and to create distributable reserves which would enable the payment of dividends in the future. In addition, the Capital Reduction will have the effect of improving the profile of the Company's balance sheet, thereby improving the Group's access to capital.

The Capital Reduction is conditional upon, amongst other things, the Company obtaining Shareholder approval at the GM which will be held at 11:30 a.m. on Wednesday 23 September 2020.

Background to and details of the Capital Reduction

One of the Board's stated objectives has been to introduce, and subsequently to manage, a dividend stream for the benefit of Shareholders. To this end, the Company paid a maiden interim dividend in July 2019 of 0.01 pence per Ordinary Share. Whilst there can be no certainty that another dividend will be paid in the short term, or at all, the Board now considers it to be prudent to take the necessary steps to enable the Company to pay a dividend as and when it is considered appropriate to do so.

At 31 March 2020, being the date at which the Company's most recent audited accounts were prepared, the Company had a profit and loss account deficit of £7,007,000. At the same date, the balance standing to the credit of the Company's Share Capital amounted to £13,426,000, which sum included £7,348,000 of Deferred Shares with such restricted entitlements as to cause them to be of no material value. In addition, the balance standing to the credit of the Company's Share Premium Account amounted to £6,078,000. The Capital Reduction, if approved and made effective, will be sufficient to eliminate the deficit entirely and to create distributable reserves.

The Capital Reduction is proposed to be effected by reducing the Company's Share Capital by the amount currently representing the Deferred Shares, being £7,348,000, and by reducing the Company's Share Premium Account by £4,460,000 which together will, subject to the discharge of any undertakings required by the Court as explained below, be sufficient to eliminate the deficit on the profit and loss account. As a result, any positive distributable reserves created, or generated by the Company after the date on which the Capital Reduction takes effect, would be available for the Board to use for the purposes of paying dividends (should circumstances in the future make it desirable to do so).

In addition to the approval by Shareholders of the Resolutions, the Capital Reduction requires the approval of the Court. Accordingly, following the General Meeting, an application will be made to the Court in order to confirm and approve the Capital Reduction.

In providing its approval of the Capital Reduction, the Court is likely to require protection for the creditors (including contingent creditors) of the Company whose debts remain outstanding on the relevant date, except in the case of creditors which have consented to the Capital Reduction. Any such creditor protection may include seeking the consent of the Company's creditors to the Capital Reduction or the provision by the Company to the Court of an undertaking to deposit a sum of money into a blocked account created for the purpose of discharging the non-consenting creditors of the Company.

It is anticipated that the Capital Reduction will become effective in the fourth quarter of 2020 following the necessary registration of the Court Order at Companies House.

There will be no change in the number of Ordinary Shares in issue (or their nominal value) following the implementation of the Capital Reduction and no new share certificates will be issued as a result of the Capital Reduction. The Capital Reduction itself will not involve any distribution or repayment of capital or share premium by the Company and will not reduce the underlying net assets of the Company. The distributable reserves arising on the Capital Reduction will, subject to the discharge of any undertakings required by the Court, support the Company's ability to pay dividends, should circumstances in the future make it desirable to do so.

It should be noted that the Capital Reduction does not in itself guarantee the payment of a dividend to Shareholders, whether now or in the future.

Expected timetable of principal events 

A formal Notice convening the meeting has been sent to shareholders. A copy of the Notice, together with a copy of the form of Proxy, can be found on the Company's website at: https://tavistockinvestments.com/announcements. However, based on current COVID-19 measures implemented by the Government in the United Kingdom SHAREHOLDERS WILL NOT BE PERMITTED TO ATTEND THE GM. The Company will ensure that the meeting is quorate and that the legal requirements are met.

SHAREHOLDERS WISHING TO VOTE ON THE RESOLUTIONS ARE STRONGLY URGED TO DO SO THROUGH COMPLETION OF THE FORM OF PROXY THAT HAS BEEN SENT TO THEM. A FURTHER COPY OF THE FORM OF PROXY CAN BE DOWNLOADED FROM THE COMPANY'S WEBSITE, AS DETAILED ABOVE.

If Shareholders have any questions or comments relating to the business of the meeting that they would like to ask the Board then they are asked to submit those questions in writing via email to GM230920@tavistockinvestmentsplc.com no later than 11.30 on 21 September 2020. The Board will publish a summary of any questions received which are of common interest, together with a written response on the Company's website as soon as practicable after the conclusion of the meeting.

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