Unaudited Interim Accounts

RNS Number : 6482S

Tavistock Investments PLC

23 December 2016

 

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: [phone]

Oliver Cooke, Executive Chairman

Brian Raven, Group Chief Executive

Northland Capital Partners Limited                                                 Tel: [phone]

William Vandyk

Matthew Johnson

Allenby Capital Limited                                                                     Tel: [phone]

Nick Naylor

Nick Athanas

Templars Communications Limited                                                  Tel: [phone]

Kitty Parry

Alice Osborn

 

END

 

 

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