Half Yearly Report

RNS Number : 9505G

Tavistock Investments PLC

26 November 2015

 

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: [phone]

Northland Capital Partners Limited

William Vandyk / Matthew Johnson                                                                                    Tel: [phone]

WH Ireland Limited

Tim Feather / Mark Leonard                                                                                               Tel: [phone]

Templars Communications Ltd

Kitty Parry / Kate Boothman-Meier                                                                                     Tel: [phone]

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.

 

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