TIDMTAVI
RNS Number : 7440U
Tavistock Investments PLC
08 April 2021
Certain information contained within this announcement is deemed
by the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as amended by Market
Abuse (Amendment) (EU Exit) Regulations 2019/310. Upon the
publication of this announcement, this inside information is now
considered to be in the public domain.
Tavistock Investments Plc
("Tavistock" or the "Company")
Year-end trading update
8 April 2021
The Board of Tavistock is pleased to announce that the Company
has achieved a strong close to the financial year just ended on 31
March 2021.
Financials
There is a limit to the amount of financial information the
Board is permitted to release at this time, without incurring
considerable additional expense, due to the Company being deemed to
be in an "Offer Period" (as defined in the City Code on Takeovers
and Mergers) as a result of the unwelcome approach from TEAM
plc.
During the year, the Board initiated a group-wide reorganisation
project (announced in November 2020) and implemented other process
improvement and cost cutting measures (announced in February
2021).
Gross revenues in the Company's advisory business were in line
with the last financial year, at GBP24 million, of which
approximately 80% is annualised recurring revenue. The Board notes
with interest that recently reported M&A transactions in the
sector have been conducted at a multiple of between 3 - 3.5 times
recurring advisory revenue.
Tavistock's funds under management at 31 March 2021 have also
remained similar to last year at approximately GBP1.1 billion and
the Board notes that investment management businesses have recently
changed ownership at values equivalent to between 2% and 4% of
funds under management.
The Company has, during the year ended 31 March 2021, benefited
from the Government backed furlough scheme, which will clearly not
be available in future years. However, the savings that the Board
has achieved through the creation of a captive cell insurance
facility will more than compensate for the absence of on-going
furlough support. This captive cell insurance facility enables the
Company to provide a proportion of its professional indemnity
insurance requirement through an in-house insurer and thereby to
save approximately GBP250,000 per annum compared to the cost of
obtaining the same level of insurance cover as last year.
The Company also received financial support from the Government
in the form of a GBP2.1 million CBILS loan. This was a
precautionary measure and whilst funds were received upon approval
of the loan, they have remained unutilised. The Company plans to
repay the CBILS loan as soon as circumstances properly permit.
The Company's performance during Q1 of the financial year was
enhanced by the voluntary salary sacrifices made by employees at
that time. The Board is immensely grateful for the support they
gave to the business during the early stage of the coronavirus
pandemic when future developments were uncertain. The Board was
therefore particularly pleased to have been able to repay them all,
in full, during the final quarter of the financial year.
Investment funds
The reorganisation project referred to above, began with a
review of the performance of the Company's investment funds. This
led to the appointment of a new Chief Investment Officer, under
whose supervision the performance of the investment funds has
improved significantly. Following the first nine months of the new
Chief Investment Officer's tenure, all six multi-asset ACUMEN funds
are ranked in the top quartile of their appropriate IA Sector
(Investment Association fund sectors used for comparative market
analysis).
Operations
Alongside the reorganisation project, the Board undertook a risk
and cost review of the Company's advice oversight regime. This has
resulted in the development of a more streamlined, cost and risk
effective training and competence scheme, with improved management
information. Each adviser now benefits from a tailored oversight
and development plan, significantly improving the Board's
confidence in ensuring good client outcomes.
Tavistock's new low-cost platform, the Tavistock Platform, was
launched in December 2020. It has been well received, already
attracting many new clients and the Board believes that significant
assets will be transferred to the Tavistock Platform over the next
few years.
Potential offer from TEAM plc
The opportunistic approach made to the Company by TEAM plc, a
newly listed AIM company supported by a small grouping of former
employees and disaffected shareholders, has been an unwelcome
distraction for the Company. TEAM plc has announced that it is
considering a potential bid for the Company at a price that the
Board believes to be significantly below the value of the Company's
assets, as highlighted by the recent transaction multiples set out
above and offering only illiquid shares as the consideration.
By contrast, the Board has been exploring ways in which the
inherent value of the Company's assets can be used to fund the
Company's further development and to deliver significant value for
shareholders.
Enquiries
Tavistock Investments Plc Tel: 01753 867000
Oliver Cooke
Brian Raven
Allenby Capital Limited
(Nominated Adviser and Broker to Tavistock) Tel: 020 3328
5656
Corporate Finance:
Nick Naylor, Nick Athanas, Liz Kirchner
Sales and Corporate Broking:
Tony Quirke
Powerscourt (PR adviser to Tavistock) Tel: 07711 380 007
Gilly Lock
020 7250 1446
Chloe Retief
Glossary:
A captive insurance cell ("Cell") is a wholly owned subsidiary
that is established to insure the risks of its parent company
group. Cells are established under the umbrella of an existing
insurance provider within a suitable jurisdiction, in this
instance, Guernsey. The insurance provider supplies both the
professional expertise and the necessary regulatory capital. As
part of a licensed insurance entity, it can therefore act in the
same way as a typical insurance company, by receiving premiums and
paying claims. However, it retains any underwriting profit for the
benefit of its parent, rather than for the benefit of a third-party
insurer.
Whilst established within a much larger insurance umbrella, each
Cell, as well as the risk within it, is legally separated from all
other Cells within its umbrella and ring-fenced from all other
Cells' activities. Each Cell carries its own separate capital and
operates individually, as a separate ring-fenced account.
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END
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