TIDMTAVI
RNS Number : 1227U
Tavistock Investments PLC
21 November 2019
Tavistock Investments plc
("Tavistock", "Company" or "Group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHSED 30 SEPTEMBER
2019
FINANCIAL HIGHLIGHTS
-- Continued increase in gross revenue for the Group for this
period to more than GBP14.3 million (30 September 2018: GBP14.0
million)
-- Continued increase in gross profit to GBP5,811,000 (30 September 2018: GBP5,651,000)
-- 95% increase in EBITDA to GBP1,006,000 (30 September 2018: GBP516,000)
OPERATIONAL HIGHLIGHTS:
-- Continued growth in funds under management (FUM) for the 18th consecutive quarter
o Total FUM reached over GBP1.1 billion, an 18% increase (from
GBP941 million) over the last year and a 49% increase (from GBP745
million) since 30 September 2017
o Gross revenues for Tavistock Wealth at GBP2.74 million for the
six-month period, compares favourably with revenue of GBP4.9
million for the full year to 31 March 2019
o Average gross revenue remained steady at 0.51% of FUM value
per annum
-- Protected products
o Last year, the Company launched two new funds protected by
contractual guarantees provided by Morgan Stanley & Co
International plc. These are the ACUMEN Capital Protection
Portfolio ("ACPP") and the ACUMEN Income-Protection Portfolio
("AIPP")
o To date the funds have attracted over GBP250 million of
inflows
o Earlier in the year, Tavistock established a Luxembourg
regulated fund structure in order to facilitate investment in the
protected portfolios by overseas based investors - a Reserved
Alternative Investment Fund (RAIF)
o The RAIF has now been admitted to trading on the Luxembourg
Stock Exchange and is available for investment via Euroclear and
ClearStream
-- The performance of the advisory business remains a key area of focus
o During the period revenues remained steady at GBP11.6
million
o At the end of the period, the Group's advisory business had
180 advisers
-- Endorsements
o Tavistock Wealth voted "The One to Watch" in Growth Investor
Awards 2019
o During the period, the Group was ranked 14th in the Financial
Times' Top 100 Financial Advisers 2019
POST-PERIOD HIGHLIGHTS
-- Launching another protection portfolio in the near future,
the ACUMEN ESG ("Environmental, Social, Governance") Protection
Portfolio, which will carry the same 90% high watermark capital
guarantee as the ACPP
Brian Raven, Group Chief Executive, Tavistock Investments said:
"We see these results as particularly encouraging given the
backdrop of political uncertainty and the market headwinds that
have impacted our industry and the country. Our investment
management business and our work with key partners have continued
to play an essential role in our success and profitability. It is
difficult to predict how markets will react and how investors may
behave in the months ahead. Political events might have a
significant impact on our business, however, we believe our
commitment to developing strong partnerships, as well as broadening
our investment proposition, will drive further growth."
Enquiries
Tavistock Investments Plc Tel: 01753 867000
Oliver Cooke
Brian Raven
Arden Partners Plc Tel: 020 7614 5900
Paul Shackleton
Allenby Capital Limited Tel: 020 3328 5656
Nick Naylor
Nick Athanas
Vested Tel: 020 3691 7990
Paul Andrieu
Amelia Graham
TAVISTOCK INVESTMENTS PLC
CHAIRMAN'S STATEMENT
FOR THE SIX MONTHSED 30 SEPTEMBER 2019
I am pleased to advise that the business has reported a 95%
increase in the level of EBITDA achieved during the period under
review as compared with the same period in the previous year, and
that good progress continues to be made with the organic
development of the business.
The performance in this period was particularly encouraging
given the backdrop of political uncertainty and the market
headwinds that have been faced by the Company, the industry and by
the country as a whole. However, it is difficult to assess the
impact that the continuing political and economic uncertainty might
have on the Company's performance in the second half of the
year.
Investment Management
The success of the investment management business remains key to
the profitability of the Group and I am pleased to report that the
level of funds being managed on a discretionary basis ("FUM") has
now risen for an 18(th) consecutive quarter. However, the pace of
growth slowed during the period under review as the paralysis seen
in parliament increased investor anxiety, reduced the level of
investment activity, whilst market challenges adversely impacted
valuations. As shown in the table below, the level of FUM has risen
by 18% (GBP172 million) over the last year and by over 49% (GBP368
million) since 30 September 2017.
30 Sept '19 30 Sept '18 30 Sept
GBPm GBPm '17
GBPm
FUM 1,113 941 745
------------ ------------ --------
Tavistock Wealth's current average gross revenue is 0.51% of FUM
value per annum and during the six-month period it achieved
revenues of GBP2.74 million. This compares favourably with revenue
of GBP4.9 million for the full year to 31 March 2019.
Now that Tavistock Wealth has established a successful five-year
track record, a number of UK advisory firms outside the ownership
of the Group have been recommending our investment management
services to their clients. To date, these clients have introduced
some GBP35 million of inflows. Discussions with other firms are
ongoing. In addition, as a separate initiative, discussions are
being held with a number of significantly larger potential business
partners, each of whom has the ability to generate substantial
inflows of funds.
Industry recognition continues to increase with Tavistock Wealth
once again being selected as a finalist, and on this occasion being
voted as "The One to Watch", at this year's Growth Investor
Awards.
Update on Key Initiatives
1 Protected Products
Last year, the Company launched two new funds protected by
contractual guarantees provided by Morgan Stanley & Co
International plc, one of the world's largest investment companies.
These are the ACUMEN Capital Protection Portfolio ("ACPP") and the
ACUMEN Income-Protection Portfolio ("AIPP"). These funds provide
high watermark capital guarantees to investors, ensuring that the
Net Asset Value ("NAV") of the ACPP can never fall below 90% of its
highest ever value, and the AIPP (which takes slightly more risk)
below 85%. These funds have been well received and been positively
reviewed by a recognised industry research analyst. To date the
funds have attracted over GBP250 million of inflows.
In the near future the Company will be launching another new
protection portfolio, the ACUMEN ESG ("Environmental, Social,
Governance") Protection Portfolio, which will carry the same 90%
high watermark capital guarantee as the ACPP. The ACUMEN ESG
Protection Portfolio will use both positive and negative screening
of potential investments, to ensure that, as a minimum, it achieves
an MSCI ESG rating of A.
It is our belief that the new ACUMEN ESG Protection Portfolio
will be as well received as the existing protection portfolios and
that these funds remain unique within the UK. Our objective
continues to be to make these funds available to as wide an
audience as possible both within the UK and offshore.
2 Law Society Endorsement
Last year we launched Tavistock Law, a specialised business
which has been formally endorsed by the Law Society as the
preferred provider of investment advice to its members in the
fields of Trusts and Court of Protection awards. The objective of
this new business is to work closely with the Society, advising
members and outlining the suitability of the new protected products
for Trusts and their beneficiaries. After a stuttering start,
resulting from staff changes and an internal reorganisation within
the Law Society, this partnership is now beginning to gain
traction.
3 Smartphone App
Tavistock Wealth soft-launched its new smartphone app, branded
"i-stock" earlier in the year. The purpose of the soft-launch was
firstly, to ensure that the mechanics of the app functioned well
and were sufficiently robust to be able to handle large volumes of
traffic, and secondly, to enable suitable helpdesk protocols to be
developed, tested and documented. I am pleased to advise that this
initial stage has been successfully completed. The next stage is to
refine the consumer messaging and enable all of Tavistock Wealth's
funds to be accessible via i-stock. Client accounts are currently
free of charge without any administration, dealing, entry, exit or
other charges applied.
4 Offshore
Earlier in the year, we established a Luxembourg regulated fund
structure in order to facilitate investment in the protected
portfolios by overseas based investors - a Reserved Alternative
Investment Fund (RAIF). The Tavistock Fund SCA SICAV - RAIF
currently has a single sub-fund, the Tavistock Guaranteed
Portfolio. This portfolio holds cash together with investments in
the ACPP and AIPP referred to above, structured so as to guarantee
the same high watermark 90% protection. The RAIF has now been
admitted to trading on the Luxembourg Stock Exchange and is
available for investment via Euroclear and ClearStream. The task of
getting the RAIF listed on a number of other worldwide trading
platforms favoured by potential investors is ongoing.
5 Lighthouse
In May, Tavistock announced the termination of its strategic
relationship with Lighthouse due to the indefinite postponement of
agreed marketing activity following Lighthouse's acquisition by
Quilters. As a consequence, the Company has during the period under
review written off the GBP133,000 investment that it had made in
the creation of a range of bespoke share classes, the development
of a dedicated website and the full supporting promotional
literature designed specifically for this partnership.
Advisory
The performance of the Group's advisory businesses is another
key area of focus and during the period gross revenues remained
materially unchanged at GBP11.6 million. Increased revenue, with
improved profitability, generated by registered individuals has
replaced the gross revenue lost as a consequence of having required
a number of poorer performing appointed representative firms to
leave the Group. This is in line with the Group's ongoing drive to
minimise the risk associated with the Group's advisory business and
to appropriately match this risk against potential commercial
reward.
At the end of the period, the Group's advisory businesses had
180 individual advisors. The Group has also recently been ranked
14(th) in the Financial Times' Top 100 Financial Advisers 2019.
Financial Performance
During the period, the Group generated EBITDA of GBP1,006,000 on
gross revenue of GBP14.3 million (six months to 30 September 2018,
EBITDA of GBP516,000 on gross revenue of GBP14 million).
Cash generated from operations was GBP1,008,000 (six months to
30 September 2018, GBP130,000). However, during the period the
Company settled GBP520,000 of deferred consideration obligations,
spent GBP665,000 on the purchase of client books, invested
GBP385,000 on the key initiatives referred to above, reduced debt
and finance obligations by GBP515,000 and distributed GBP58,000 to
shareholders through the payment of a maiden dividend. The net
effect has been a reduction in the Group's cash resources from
GBP3.12 million at 31 March to GBP1.98 million at 30 September
2019.
At the end of the period, the Group had net assets of GBP20
million (31 March 2019, GBP19.9 million) which included cash
resources of GBP1.98 million (31 March 2019, GBP3.1million).
The Group's results for the period and its position at the end
of the period can be summarised as follows.
6 Months ended 6 Months ended Movement
30 Sept '19 30 Sept '18
GBP'000s GBP'000s
Gross Revenues 14,311 14,034 2% increase
--------------- --------------- ---------------
Reported EBITDA 1,006 516 95% increase
--------------- --------------- ---------------
Depreciation
&
Amortisation (755) (503) 50% increase
--------------- --------------- ---------------
Share based payments (131) (200) 36% decrease
--------------- --------------- ---------------
Profit / (Loss)
from operations
before investment
write off 120 (187) 164% increase
--------------- --------------- ---------------
Investment write (133)* - -
off
--------------- --------------- ---------------
Reported Loss
from operations (13) (187) 93% decrease
--------------- --------------- ---------------
Loss per share 0.01p 0.05p 80% decrease
--------------- --------------- ---------------
30 Sept '19 31 March '19 Movement
GBP'000s GBP'000s
--------------- --------------- ---------------
Net Assets 20,002 19,996 0.03% increase
--------------- --------------- ---------------
Cash at end of
the period 1,978 3,116 37% decrease
--------------- --------------- ---------------
*Write off of investment in strategic relationship with
Lighthouse Group Plc.
Future Prospects
Solid progress has been made with the development of the
business during the period, but at present it is very difficult to
predict how markets will react and how investors may behave in the
months ahead. Political events might also have a significant impact
on our business.
The management team will maintain its focus on a three stranded
strategy for the development of the business. The first strand
being to bring to fruition and to maximise asset inflows from the
key initiatives referred to above; the second strand is to enter
into a number of strategic partnerships with the larger entities
with whom discussions are currently being held; and the third is to
explore suitable acquisition opportunities.
I look forward to updating you on further progress.
Oliver Cooke
Chairman
20 November 2019
TAVISTOCK INVESTMENTS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 SEPTEMBER 2019
Unaudited Unaudited
6 months ended 6 months ended
30 September 30 September
2019 2018
Note GBP'000 GBP'000
Revenue 2 14,311 14,034
Cost of sales (8,500) (8,383)
------------ ------------
Gross profit 5,811 5,651
Administrative expenses (5,824) (5,838)
-------------- --------------
Loss from operations (13) (187)
Memorandum:
Adjusted EBITDA 1,006 516
Depreciation & amortisation (888) (503)
Share Based Payment (131) (200)
-------------- --------------
Loss from operations (13) (187)
--------------------------------------- ----- --------------- ---------------
Finance costs (119) (133)
------------ ------------
Loss before taxation and attributable
to equity holders of the parent (132) (320)
Taxation 54 62
------------ ------------
Loss after taxation and attributable
to equity holders of the parent and
total comprehensive income for the
period (78) (258)
====== ======
Loss per share
Basic 3 (0.01)p (0.05)p
====== ======
TAVISTOCK INVESTMENTS PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2019
Unaudited Audited
30 September 2019 31 March 2019
GBP'000 GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Fixed assets 1,197 586
Intangible assets 4 21,942 19,897
----------------- -----------------
Total non-current assets 23,139 20,483
Current assets
Trade and other receivables 6,901 5,353
Cash and cash equivalents 1,978 3,116
----------------- -----------------
Total current assets 8,879 8,469
----------------- -----------------
Total assets 32,018 28,952
LIABILITIES
Current liabilities (5,495) (3,942)
Non-current liabilities
Other payables (13) (13)
Term loan and deferred
consideration (3,689) (2,127)
Provisions (2,465) (2,465)
Deferred taxation (354) (409)
------------------ ------------------
Total liabilities (12,016) (8,956)
------------------ ------------------
Total net assets 20,002 19,996
========= =========
Capital and reserves
attributable
to owners
of the parent
Share capital 5 13,101 13,101
Share premium 5,681 5,681
Retained earnings 1,220 1,214
------------------ ------------------
Total equity 20,002 19,996
========= =========
The unaudited interim condensed consolidated financial
statements were approved by the Board and authorised for issue on
20 November 2019.
Oliver Cooke
Chairman
TAVISTOCK INVESTMENTS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 SEPTEMBER 2019
Retained
Share capital Share premium earnings Total equity
GBP'000 GBP'000 GBP'000 GBP'000
31 March 2018 12,720 4,882 1,088 18,690
Loss after tax and total comprehensive
income - - (258) (258)
Equity settled share based
payments - - 200 200
------------- -------------- --------------- --------------
30 September 2018 12,720 4,882 1,030 18,632
-------------- -------------- -------------- --------------
Issue of shares 381 869 - 1250
Cost of share issue - (70) - (70)
Profit after tax, adjustments
and total comprehensive income - - 136 136
Equity settled share based
payments - - 48 48
-------------- -------------- -------------- --------------
31 March 2019 13,101 5,681 1,214 19,996
-------------- -------------- -------------- --------------
Loss after tax and total comprehensive
income - - (67) (67)
Equity settled share based
payments - - 131 131
Dividend payment - - (58) (58)
-------------- -------------- -------------- --------------
30 September 2019 13,101 5,681 1,220 20,002
-------------- -------------- -------------- --------------
TAVISTOCK INVESTMENTS PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 SEPTEMBER 2019
Unaudited Unaudited
6 months ended 6 months ended
30 September 2019 30 September 2018
GBP'000 GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Loss before tax
Adjustments for: (132) (320)
Share based payments 131 200
Depreciation on fixed assets 272 84
Amortisation of intangible assets 483 419
Impairment 133 -
Net finance costs 119 133
----------------- -----------------
Cash flows from operating
activities
before changes 1,006 516
in working capital
Increase in trade and other
receivables (1,384) (143)
Increase/(Decrease) in trade and
other payables 1,386 (243)
----------------- -----------------
Cash used in operations 1,008 130
Investing activities
Purchase of fixed assets (856) (128)
Purchase of intangible assets (2,661) (194)
Payment of deferred consideration 1,102 (630)
----------------- -----------------
Net cash generated from investing
activities (2,415) (952)
Financing activities
Finance costs (119) (133)
New financing 676 14
Loan repayments (230) -
Dividend payment (58) -
----------------- -----------------
Net cash from financing
activities 269 (119)
----------------- -----------------
Net decrease in cash and cash
equivalents (1,138) (941)
Cash and cash equivalents at
beginning
of the period 3,116 3,111
------------------ ------------------
Cash and cash equivalents at end
of the period 1,978 2,170
========= =========
TAVISTOCK INVESTMENTS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHSED 30 SEPTEMBER 2019
1. ACCOUNTING POLICIES
Basis of preparation
The interim condensed consolidated 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 2019 Report and
Accounts and that are expected to be applied in the Report and
Accounts of the year ended 31 March 2020.
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 2019 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:
Unaudited Unaudited
Investment Advisory 30 September 30 September
Management Support 2019 2018
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 2,744 11,567 14,311 14,034
Cost of Sales (242) (8,258) (8,500) (8,383)
Administrative Expenses (1,165) (3,509) (4,674) (4,461)
Group costs (1,150) (1,377)
------------- -------------
Loss from operations (13) (187)
====== ======
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 30 September
2019 2018
Loss per share has been calculated using
the following:
Loss from continuing operations (GBP'000) (78) (258)
Weighted average number of shares ('000s) 575,296 537,186
-------------- --------------
Basic loss per ordinary share (0.01)p (0.05)p
======= =======
4. INTANGIBLE ASSETS Customer Regulatory Goodwill Other
& Adviser Approvals Arising Intangible
on
Relationships & Systems Consolidation Assets Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at 1 April
2019 (Audited) 6,117 1,815 14,751 1,424 24,107
Additions 2,276 - - 385 2,661
Impairment - - - (133) (133)
------------- ------------- ------------- ------------ ---------------
Balance at 30 September
2019 8,393 1,815 14,751 1,676 26,635
(Unaudited) ------------- ------------- ------------ ------------ ---------------
Accumulated amortisation
Balance at 1 April
2019 (Audited) 2,780 959 235 236 4,210
Amortisation 335 86 - 62 483
------------ ----------- ----------- ------------ ---------------
Balance at 30 September
2019 3,115 1,045 235 298 4,693
(Unaudited) ----------- ------------ ------------ ------------ ---------------
Net Book Value
At 1 April 2019 (Audited) 3,337 856 14,516 1,188 19,897
====== ====== ====== ====== =======
At 30 September 2019 5,278 770 14,516 1,378 21,942
(Unaudited) ====== ====== ====== ====== =======
5. SHARE CAPITAL Unaudited Unaudited
30 September 30 September
2019 2018
GBP'000 GBP'000
Called up share capital
Allotted, called up and fully paid
575,295,801 Ordinary shares of 1 pence
each 5,753 5,372
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
------------ ------------
13,101 12,720
====== ======
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END
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