Last checked at 23 Dec 2016 07:00
23 December 2016
TAVISTOCK INVESTMENTS PLC
UNAUDITED INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016
CHAIRMAN'S STATEMENT
On the 28th November 2016, the Company announced that it had received all necessary approvals from the Financial Conduct Authority to enable it to complete the acquisition of Price Bailey Financial Services Limited, referred to in more detail below, and having now completed that transaction, I am pleased to report on the considerable progress that the Company has made during the six-month period to 30 September 2016.
Tavistock Investments is, at heart, an investment management business that has established its own distribution channel through the selective acquisition of five financial advisory businesses. These advisory businesses collectively service over 70,000 retail clients throughout the UK and each business is trading profitably.
The profitability of the Group's advisory operations, as a whole, was greatly enhanced by the acquisition of Abacus Associates Financial Services Ltd, in April 2016. The Group then employed a specialist recruitment manager to augment the organic growth of the advisory businesses and, during the brief period under review, the number of advisers within Abacus has grown by over 45% to 65.
Advisory profitability has been further enhanced after the end of the period under review, by the acquisition of the multi-award winning business Price Bailey Financial Services Limited, in November 2016. This acquisition has the added strategic benefit of enabling the Group to offer its investment management services to a new audience of higher net worth clients.
FUM (funds under management) have more than doubled over the last year to £690 million, with £540 million being managed on a discretionary basis.
Tavistock Wealth, the Group's investment management business also trades profitably and despite turbulent market conditions following the BREXIT vote, Donald Trump's election, the continued weakening of sterling and a major sell off in bond markets, Tavistock Wealth's range of risk progressive model portfolios has continued to perform well.
Having established a successful two-year track-record managing assets for clients of the Group's advisory businesses, the Group is now investing in the personnel and marketing to offer Tavistock Wealth's services to firms outside of the Group. Whilst it is still too early to have reaped rewards from this investment, early indications are most encouraging.
Financial Performance
| Period ended 30 Sept 2016 £'000 | Period ended 30 Sept 2015 £'000 |
Gross Revenues | 16,911 | 15,960 |
Adjusted EBITDA | 109 | (63) |
Depreciation, amortisation | (466) | (688) |
Share based payments | (214) | (298) |
Acquisition related (costs)/gains | (117) | 227 |
Loss from Operations | (688) | (822) |
As can be seen from the table above, with an increase in gross revenues of just 6%, from £15.9 million in the equivalent period last year to £16.9 million in the period under review, adjusted EBITDA profits have improved by £172k, from a loss of £63k in the equivalent period last year to a profit of £109k this time. The reported loss from operations fell by £134k, or 16%, from £822k in the equivalent period last year to £688k in the period under review. At 30 September 2016, the Group had net assets of £14.91 million (30 September 2015: £10.33 million) which included cash resources of £3.8 million (30 September 2015: £4 million).
The Future
The Board's strategy is to focus on the organic development of the business and to make selected strategic acquisitions where considered appropriate.
In this regard, the Board will continue to focus on improving the operational efficiency of the Group's existing businesses, removing cost and reducing risk where possible. We will also grow the advisory businesses through additional recruitment and the wealth management business by increasing the level of funds managed on a discretionary basis. This will be achieved both within the Group and by offering our investment management services to outside firms.
It remains our objective to introduce a dividend stream for the benefit of the Company's shareholders at the earliest opportunity. However, in light of the heavy investment on recruitment and external business development, the earliest opportunity would now appear to be during the next financial year.
I would like to take this opportunity to welcome once again the new members of our senior management team and to acknowledge and thank all of our staff for the considerable efforts that they have continued to make. I look forward to updating shareholders on further progress in due course.
Oliver Cooke
Executive Chairman
23 December 2016
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016
|
| Unaudited | Unaudited |
|
| 6 months ended | 6 months ended |
|
| 30 September | 30 September |
|
| 2016 | 2015 |
| Note | £'000 | £'000 |
|
|
|
|
Revenue - continuing operations | 2 | 16,911 | 15,960 |
|
|
|
|
Cost of sales - continuing operations |
| (13,767) | (12,650) |
|
| ------------ | ------------ |
Gross profit |
| 3,144 | 3,310 |
|
|
|
|
Administrative expenses- continuing operations |
| (3,832) | (4,132) |
|
| -------------- | -------------- |
Loss from Operations |
| (688) | (822) |
|
|
|
|
Memorandum: Adjusted EBITDA |
|
109 |
(63) |
Depreciation & amortisation |
| (466) | (688) |
Share based payments |
| (214) | (298) |
Acquisition related (costs)/gains |
| (117) | 227 |
|
| -------------- | -------------- |
Loss from Operations |
| (688) | (822) |
|
|
|
|
|
|
|
|
Finance costs |
| (95) | (4) |
Finance income |
| 1 | 6 |
|
| ------------ | -------------- |
Loss before taxation and attributable to equity holders of the parent |
| (782) | (820) |
|
|
|
|
Taxation |
| 117 | 49 |
|
| ------------ | ------------ |
Loss from continuing operations
Discontinued operations (net of tax)
Loss after taxation and attributable to equity holders of the parent and total comprehensive income for the period |
| (665)
- ------------
(665) | (771)
(749) ------------
(1,520) |
|
| ====== | ====== |
Loss per share (continuing operations) |
|
|
|
Basic | 3 | (0.18)p | (0.61)p |
|
| ====== | ======= |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2016
|
| Unaudited | Unaudited | ||
|
| 30 September 2016 | 30 September 2015 | ||
|
| £'000 | £'000 | £'000 | £'000 |
ASSETS |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
| 431 |
| 56 |
Intangible assets | 4 |
| 16,918 |
| 12,030 |
|
|
| ----------------- |
| ----------------- |
Total non-current assets |
|
| 17,349 |
| 12,086 |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Trade and other receivables |
| 1,888 |
| 4,635 |
|
Cash and cash equivalents |
| 3,807 |
| 4,019 |
|
|
| ----------------- |
| ----------------- |
|
Total current assets |
|
| 5,695 |
| 8,654 |
|
|
| ----------------- |
| ----------------- |
Total assets |
|
| 23,044 |
| 20,740 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
| (1,974) |
| (2,243) |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
Other payables |
|
| (2,271) |
| (3,435) |
Term loan |
|
| (2,250) |
| (250) |
Provisions |
|
| (367) |
| (3,477) |
Deferred taxation |
|
| (1,270) |
| (1,004) |
|
|
| ------------------ |
| ------------------ |
Total liabilities |
|
| (8,132) |
| (10,409) |
|
|
| ------------------ |
| ------------------ |
Total net assets |
|
| 14,912 |
| 10,331 |
|
|
| ========= |
| ========= |
Capital and reserves attributable to owners |
|
|
|
|
|
of the parent |
|
|
|
|
|
Share capital | 5 |
| 11,308 |
| 10,262 |
Share premium |
|
| 26,107 |
| 20,688 |
Retained deficit |
|
| (22,503) |
| (20,619) |
|
|
| ------------------ |
| ------------------ |
Total equity |
|
| 14,912 |
| 10,331 |
|
|
| ========= |
| ========= |
The financial statements were approved by the Board and authorised for issue on 23 December 2016.
Oliver Cooke
Executive Chairman
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016
| Share capital | Share premium | Retained deficit | Total equity |
| £'000 | £'000 | £'000 | £'000 |
|
|
|
|
|
31 March 2015 | 10,245 | 20,576 | (19,397) | 11,424 |
|
|
|
|
|
Issue of shares | 17 | 112 | - | 129 |
|
|
|
|
|
Loss after tax and total comprehensive income | - | - | (1,520) | (1,520) |
|
|
|
|
|
Equity settled share based payments | - | - | 298 | 298 |
| ------------- | -------------- | --------------- | -------------- |
30 September 2015 | 10,262 | 20,688 | (20,619) | 10,331 |
| -------------- | -------------- | -------------- | -------------- |
|
|
|
|
|
Loss after tax and total comprehensive income | - | - | (1,663) | (1,663) |
|
|
|
|
|
Equity settled share based payments | - | - | 230 | 230 |
| -------------- | -------------- | -------------- | -------------- |
31 March 2016 | 10,262 | 20,688 | (22,052) | 8,898 |
| -------------- | -------------- | -------------- | -------------- |
Issue of shares | 1,046 | 5,419 | - | 6,465 |
|
|
|
|
|
Loss after tax and total comprehensive income | - | - | (665) | (665) |
|
|
|
|
|
Equity settled share based payments | - | - | 214 | 214 |
| -------------- | -------------- | -------------- | -------------- |
30 September 2016 | 11,308 | 26,107 | (22,503) | 14,912 |
| -------------- | -------------- | -------------- | -------------- |
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016
|
| Unaudited | Unaudited | ||
|
| 6 months ended 30 September 2016 | 6 months ended 30 September 2015 | ||
|
| £'000 | £'000 | £'000 | £'000 |
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
Loss before tax (continuing and discontinued)
Adjustments for:
|
|
| (782) |
| (1,569) |
Share based payments |
|
| 214 |
| 298 |
Depreciation on property plant and equipment |
|
| 41 |
| 18 |
Amortisation of intangible assets |
|
| 425 |
| 669 |
Net finance costs |
|
| 94 |
| 2 |
|
|
| ----------------- |
| ----------------- |
Cash flows from operating activities before changes |
|
| (8) |
| (582) |
in working capital |
|
|
|
|
|
|
|
|
|
|
|
Decrease/(increase) in trade and other receivables |
|
| 2,112 |
| (84) |
Decrease in trade and other payables |
|
| (2,934) |
| (152) |
Corporation tax paid |
|
| (160) |
| - |
|
|
| ----------------- |
| ----------------- |
Cash used in operations |
|
| (990) |
| (818) |
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Finance income |
| 1 |
| 4 |
|
Purchase of fixed assets |
| (143) |
| (5) |
|
Cash on acquisition |
| 1,343 |
| 276 |
|
Acquisition of subsidiaries |
| (2,587) |
| (171) |
|
|
| ----------------- |
| ----------------- |
|
Net cash generated from investing activities |
|
| (1,390) |
| 104 |
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Finance costs |
| (95) |
| (6) |
|
Financing |
| 2,000 |
| - |
|
Issue of new share capital (net of costs) |
| 891 |
| - |
|
|
| ----------------- |
| ----------------- |
|
Net cash from financing activities |
|
| 2,796 |
| (6) |
|
|
| ----------------- |
| ----------------- |
Net increase/(decrease) in cash and cash equivalents |
|
| 416 |
| (720) |
|
|
|
|
|
|
Cash and cash equivalents at beginning of the period |
|
| 3,391 |
| 4,739 |
|
|
| ------------------ |
| ------------------ |
Cash and cash equivalents at end of the period |
|
| 3,807 |
| 4,019 |
|
|
| ========= |
| ========= |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016
1. ACCOUNTING POLICIES
Basis of preparation The interim 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 European Union. The accounts have been prepared in accordance with accounting policies that are consistent with the March 2016 Report and Accounts and that are expected to be applied in the Report and Accounts of the year ended 31 March 2017. There are new or revised standards or interpretations that apply to the period beginning 1 April 2016 but they do not have a material effect on the financial statements for the period ended 30 September 2016. This report is not prepared in accordance with IAS 34, which is not mandatory. 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 2016 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 | 2016 | 2015 | |
|
| £'000 | £'000 | £'000 | £'000 | |
|
|
|
|
|
| |
Revenue |
| 801 | 16,110 | 16,911 | 15,960 | |
|
|
|
|
|
| |
Cost of Sales |
| (315) | (13,452) | (13,767) | (12,650) | |
|
|
|
|
|
| |
Administrative Expenses |
| (440) | (2,133) | (2,573) | (3,726) | |
|
|
|
|
|
| |
Group costs |
|
|
| (1,259) | (1,155) | |
|
|
|
| ------------- | ------------- | |
Loss from operations |
|
|
| (688) | (1,571) | |
|
|
|
| ====== | ====== | |
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 balance sheet 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. | LOSS PER SHARE | Unaudited | Unaudited |
|
| 6 months ended | 6 months ended |
|
| 30 September 2016 | 30 September 2015 |
| Loss per share has been calculated using the following: |
|
|
| Loss (£'000) | (665) | (1,520) |
| Weighted average number of shares ('000s) | 371,955 | 252,988 |
|
| -------------- | -------------- |
| Basic loss per ordinary share | (0.18)p | (0.61)p |
|
| ======= | ======= |
4. | INTANGIBLE ASSETS | Customer | Regulatory | Goodwill | Other |
|
|
| & Adviser | Approvals | Arising on | Intangible |
|
|
| Relationships | & Systems | Consolidation | Assets | Total |
|
| £'000 | £'000 | £'000 | £'000 | £'000 |
| Cost |
|
|
|
|
|
| Balance at 1 April 2016 | 4,010 | 1,350 | 7,848 | 275 | 13,483 |
| Additions | 3,140 | - | 2,444 | 98 | 5,682 |
| Disposals | (10) | - | - | - | (10) |
|
| ------------- | ------------- | ------------- | ------------ | --------------- |
| Balance at 30 September 2016 | 7,140 | 1,350 | 10,292 | 373 | 19,155 |
|
| ------------- | ------------- | ------------ | ------------ | --------------- |
| Accumulated amortisation |
|
|
|
|
|
| Balance at 1 April 2016 | 879 | 430 | 205 | - | 1,514 |
| Additions | 298 | - | - | - | 298 |
| Amortisation | 333 | 92 | - | - | 425 |
|
| ------------ | ----------- | ----------- | ------------ | --------------- |
| Balance at 30 September 2016 | 1,510 | 522 | 205 | - | 2,237 |
|
| ----------- | ------------ | ------------ | ------------ | --------------- |
| Net Book Value |
|
|
|
|
|
| At 31 March 2016 | 3,131 | 920 | 7,643 | 275 | 11,969 |
|
| ====== | ====== | ====== | ====== | ======= |
| At 30 September 2016 | 5,630 | 828 | 10,087 | 373 | 16,918 |
|
| ====== | ====== | ====== | ====== | ======= |
ACQUISITIONS DURING THE PERIOD
Abacus Associates Financial Services Limited
On 1 April 2016, the Group acquired 100% of the ordinary shares in Abacus Associates Financial Services Limited, an independent financial advisory company, for a total estimated consideration of £6.165m, of which £2.535m was settled in cash, £0.13m through the adoption of a debt obligation, £1.5m through the issue to the vendor of 20m new ordinary shares of 1p each at an issue price of 7.5p per share, £1m is to be settled in cash on 1 April 2017, and £1m is the estimated value of a performance related payment to be settled in cash in July 2018.
5. | SHARE CAPITAL | Unaudited | Unaudited |
|
| 30 September 2016 | 30 September 2015 |
|
| £'000 | £'000 |
| Called up share capital |
|
|
|
|
|
|
| Allotted, called up and fully paid |
|
|
|
|
|
|
| 395,886,278 Ordinary shares of 1 pence each |
|
|
| (2015: 291,348,638 shares of 1 pence each) | 3,959 | 2,913 |
|
|
|
|
| 10,000,000 "A" Ordinary shares of 0.01 pence each | - | 1 |
|
|
|
|
| 100,000 "G" Ordinary shares of 1 pence each | 1 | - |
|
|
|
|
| 30,450,078 Deferred shares of 9 pence each | 2,741 | 2,741 |
|
|
|
|
| 465,344,739 Deferred "A" shares of 0.99 pence each | 4,607 | 4,607 |
|
| ------------ | ------------- |
|
| 11,308 | 10,262 |
|
| ====== | ====== |
6. EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION
On 30 November 2016 the Company completed the acquisition of Price Bailey Financial Services Limited, the multi award winning independent financial advisory arm of Price Bailey LLP, a firm of Chartered Accountants with five offices in the East of the United Kingdom.
The consideration for the transaction was £3.6m, of which £2.0m was settled in cash and £0.95m was satisfied through the issue of new ordinary shares. A further fixed sum of £0.15m together with a further variable performance related payment of up to £0.5m is payable in cash in November 2017.
On the same date, the Company announced that it had raised a total of £2.1m, before expenses, through the issue to new and to existing investors of 70m new ordinary shares of 1p each at an issue price of 3p per share.
For further information:
Tavistock Investments plc Tel: 01753 867000
Oliver Cooke, Executive Chairman
Brian Raven, Group Chief Executive
Northland Capital Partners Limited Tel: 020 3861 6625
William Vandyk
Matthew Johnson
Allenby Capital Limited Tel: 020 3328 5656
Nick Naylor
Nick Athanas
Templars Communications Limited Tel: 020 3642 3140
Kitty Parry
Alice Osborn