TIDMTAVI
RNS Number : 9887M
Tavistock Investments PLC
20 September 2023
Tavistock Investments Plc
("Tavistock" or the "Company")
Final Results for the year ended 31 March 2023
20 September 2023
Tavistock (AIM:TAVI) is pleased to announce its financial
results for the year ended 31 March 2023.
Financial summary
-- Reported gross revenues in line with previous year at GBP34
million (31 March 2022: GBP34 million)
-- 96% of gross revenues were generated by the Group's advisory
business, where the level of recurring income exceeds 80%
-- Advisory business gross revenues up 4.5% over the period at
GBP32.7 million (31 March 2022: GBP31.3 million)
-- Advisory business gross profit contribution rose by 6% to
GBP10.6 million (31 March 2022: GBP10.0 million)
-- Adjusted EBITDA of GBP0.14 million (2022: GBP1.37 million) ,
considered by the Board to be the best measure of the Company's
underlying performance
-- Operating loss of GBP0.94 million in a year of transition for
the Group (31 March 2022: profit GBP30.67 million, including an
exceptional gain on the sale of Tavistock Wealth)
Acquisition strategy
-- Acquired 21% stake in LEBC Holdings Limited in April 2022;
additional acquisition and subsequent sale back of LEBC subsidiary
Hummingbird Limited for the same consideration as originally
paid
-- Post balance sheet event (April 2023): acquisition of Precise
Protect, a profitable and fast-growing UK wide protection business
with a network of over 200 advisers and over 30,000 clients
-- The Group now has more than 400 advisers and other business
introducers looking after over 110,000 private clients with
estimated assets of GBP6 billion, as well as 350 corporate and
affinity clients with some 16,000 employees
-- Well placed to pursue further acquisitions with up to a
further GBP14m of deferred consideration receivable from the sale
of Tavistock Wealth and GBP50 million debt funding facility from
the Bank of Ireland
Operational summary
-- Launch of the Tavistock Academy to enable the career
development of existing staff and the recruitment of newcomers to
the industry, supporting the objective of attracting and developing
new advisers
-- Developed financial information and advice portal "Tell Me
How" and established further relationships with introducers to
increase sources of new business leads
-- Significant investment in technology to support the
scalability of the business, speed of integrating acquisitions,
flow of business intelligence and efficiency of operations,
including the creation of a data warehouse enabling sophisticated
real-time adviser oversight and risk management .
Share buy backs and dividends
-- In August 2022, the Company bought back 3,000,000 of its
ordinary shares of 1p each at a price of 9.35p per share and in
November 2022, the Company bought back a further 300,000 shares at
a price of 7p per share; shares subsequently cancelled, enhancing
earnings per share and value of shares remaining in issue
-- Higher level of interim dividend maintained at 0.07p per
share (July 2022: 0.07p, up 40% on October 2021 dividend)
Looking ahead
In the current year the Board's objectives are to:
-- extract further operational benefits from the ongoing data mining project,
-- complete the integration of Precise Protect,
-- reap the rewards from its membership of the Group, and
-- continue to develop the Group through the completion of further acquisitions.
Brian Raven, Group Chief Executive, said :
"The past financial year has seen Tavistock develop into a
leaner, more efficient business, creating the right foundations for
growth. Through the restructuring of our advice business and the
use of technology, the Group is now able to operate on a much
larger scale and embark on the next phase of our growth plan.
"We are focused on building a large and profitable financial
advisory business through acquisitions and continued organic
growth. The Group is well placed with a strong capital base and
list of potential targets with which we are already engaged. This
growth strategy is already underway, with the acquisition of
Precise Protect in April of this year, doubling the number of
advisers within the Group. We expect this business to contribute
significantly to growth in the next financial year."
For further information:
Tavistock Investments Plc
Oliver Cooke
Brian Raven Tel: 01753 867000
Allenby Capital Limited Tel: 020 3328 5656
(Nominated adviser and broker)
Corporate Finance:
Nick Naylor, Nick Athanas, Daniel Dearden-Williams
Sales and Corporate Broking:
Tony Quirke
Powerscourt Tel: 07711 380 007
Gilly Lock 020 7250 1446
Roxane Girard
TAVISTOCK INVESTMENTS PLC
CHAIRMAN'S STATEMENT
FOR THE YEARED 31 MARCH 2023
I am pleased to report that over the last year Tavistock has
been developed into a leaner, more efficient business with a clear
vision and excellent prospects.
The Board has focused on the strategic and commercial
development of the business, together with key areas of operational
significance. The progress achieved is summarised below.
STRATEGIC DEVELOPMENT
The principal recent objective has been to develop a
self-sustaining business model involving three specific
initiatives.
The first is to attract and develop new advisers both from
within the industry and from elsewhere. The Tavistock Academy has
been launched to enable the career development of existing staff
(administrators to paraplanning, paraplanners to desk-based advice,
improvement of adviser qualifications) and the recruitment of
newcomers to the industry, such as university graduates and
apprentices.
The Company has also created a desk-based advice team to filter
new business leads and look after less complex clients, passing
more complex ones to the face-to-face teams. These new facilities
enable the development of fully qualified financial advisers from
scratch with the added benefit of being able to instil best
practice from the outset.
A customer-centric culture is already embedded across the
business and Tavistock's infrastructure for adviser support,
real-time oversight, risk management and embedded governance helps
all the Company's advisers to fulfil their full potential.
The second initiative has been to increase the sources of new
business leads. Tavistock now has numerous distribution partners,
commercial partners, affinity relationships and corporate
relationships that provide new business enquiries, as does the
Company's website. Additional business enquiries are expected to
flow from the forthcoming launch of the "Tell Me How" financial
information and advice portal that will be freely available to
employees of all of the above organisations
tellmehow.tavistockinvestments.com. The recently acquired
protection network, Precise Protect (see below), will provide
well-qualified advice leads from its 30,000+ clients.
The third initiative has been a significant and on-going
investment in technology to support the scalability of the
business, the speed with which acquisitions can be integrated, the
flow of business intelligence (management information) and the
efficiency of operations to enable advisers to spend more time
servicing clients.
A data warehouse has been created collating data from the
Company's numerous systems, logs and spreadsheets to facilitate the
automated production of management information, oversight of advice
provision and control of risk management. This has improved
operational effectiveness and decision making, as well as reduced
costs.
By way of example, the data warehouse has enabled the automation
of much adviser oversight and risk management, giving Tavistock a
real-time regulatory oversight regime. Individual adviser
scorecards are updated in real-time based on the results of every
pre-sale and post-sale file check. This enables the automated
adjustment of both adviser oversight settings and, if appropriate,
the risk categorisation of product types. This approach also
accelerates the orderly integration of newly acquired
businesses.
The Board is unaware of any other company in the sector with the
same level of sophistication in terms of adviser oversight and risk
management.
COMMERCIAL DEVELOPMENT
The Board's principal commercial objectives have been to
continue the organic growth of the Group's advice business and to
replace by way of acquisition the profit contribution generated by
Tavistock Wealth, prior to its sale in August 2021.
Organic Growth
Reported gross revenues from the Group's advisory activities
rose by 4.5% over the period under review (31 March 2023: GBP32.7
million, 31 March 2022: GBP31.3million). The gross profit
contribution rose by 6% (31 March 2023: GBP10.6 million, 31 March
2022: GBP10.0 million). Given the challenging market conditions and
the related falls in asset values during the year under review, the
achievement of this level of organic growth was creditable.
Acquisition Strategy
The Group is well placed to pursue its acquisition strategy, as
it has up to a further GBP14m of deferred consideration receivable
from the sale of Tavistock Wealth, as well as a GBP50 million debt
funding facility from the Bank of Ireland.
The identification and investigation of acquisition
opportunities is a time-consuming business and inevitably, some
transactions fail at the due diligence stage. However, in April
2023, the Company completed the first significant acquisition in
the next phase of its growth plan with the purchase of Precise
Protect Limited ("Precise Protect").
Precise Protect is a profitable and fast-growing UK wide
protection business based in Bangor, Northern Ireland. The company
has a network of over 200 advisers working with more than 30,000 UK
clients. Precise Protect offers clients a wide range of products
including life and critical illness cover, personal injury and
income protection and private medical insurance, several of which
have been developed in-house and are unique to the firm. In the
year ended 31 October 2022, Precise Protect reported a profit
before taxation of GBP1.45 million on turnover of GBP6.5 million
and net assets of GBP1.23 million.
Tavistock now has more than 400 advisers and other business
introducers looking after over 110,000 private clients with
estimated assets of GBP6 billion, as well as 350 corporate and
affinity clients with some 16,000 employees.
Precise Protect is led by an experienced and dedicated
specialist team and t he Board believes that the business will be a
major contributor to the profitability of the Group.
Key integration opportunities include:
-- a significant increase in mortgage business,
-- a pool of 30,000+ clients providing leads for Tavistock's
desk based and face-to-face financial advice teams; and
-- the potential to upskill Precise Protect's advisers to become
independent financial advisers through the Tavistock Academy.
Investment in LEBC
In April 2022, the Company acquired a 21% stake in LEBC Holdings
Limited ("LEBC") details of which are included in Note 11. LEBC is
an independent national business providing financial advice to
retail clients and employee benefits advice to corporate clients.
The Group also agreed to acquire one of LEBC's subsidiaries,
Hummingbird Limited, to assist LEBC with its funding requirements.
However, as an alternative source of funds was subsequently
identified, this company was sold back to LEBC for the same
consideration as was originally paid for it.
OTHER SIGNIFICANT MATTERS
Board Appointment
Johanna Rager has been promoted to the Board in the role of
Group Finance and Operations Director. Johanna joined Tavistock
four years ago and has been a strong contributor to the Leadership
Board throughout that period. Her promotion is well-deserved.
Cost Reduction
Management has continued with the planned withdrawal from loss
making or low margin areas of activity. This included the closure
of the Luxembourg RAIF (Reserve Alternative Investment Fund), which
had failed to achieve critical mass.
The Group's low margin appointed representative network has also
been downsized through the managed exit of member firms and the
transfer of selected others to Group entities that achieve higher
margins.
Industry Awards
The high standard of Tavistock Private Client's advisory
activities continues to be recognised by the industry and this
company won several industry awards throughout the year:
-- SME News Finance Awards 2022 - Best Financial Planning & Tax Led Investing Firm
-- AI Worldwide Finance Awards 2022 - Best Independent Financial
& Investment Planning Firm East of England
-- Lawyer International Legal 100 2023 - Best Boutique IFA Firm
of the Year and Most Outstanding in Tax Efficient Investing -
UK
-- Corporate LiveWire Innovation & Excellence Awards 2023 -
Financial Planning Firm of the Year.
Our congratulations go to the management and staff within that
business.
PII Renewal
The high standard of the Group's operational and compliance
procedures has also been recognised by the insurance industry. In a
tough and increasingly expensive insurance market, the Group has
secured the renewal of its professional indemnity insurance cover,
on the same terms and at the same premium as last year, with no
increase either in excess levels or in restrictions on the scope of
cover. This is a particular tribute to the Group's risk management
and compliance team.
Regulatory Regime
Two new, industry wide, regulatory obligations have impacted the
Group during the year.
The first, has been the introduction of a new wide-ranging
Consumer Duty regime. This seeks to ensure that all clients are
treated both fairly and equally, that the charges levied for
services provided are transparent and that recommended products
both provide value for money and are appropriate for each client's
individual needs and circumstances. I am pleased to advise that
Tavistock is on-track with the implementation of its new Consumer
Duty obligations.
There has also been a sector-wide requirement for firms to
conduct a review of British Steel Defined Benefit Pension Transfer
cases. Tavistock has fewer than fifty such cases and the Company's
pension transfer processes are of a high standard. All pension
transfer activity is covered by the Group's professional indemnity
insurance cover.
Shareholder Value
The Board has pursued several initiatives intended to enhance
shareholder value. These include share buy-backs and applications
for Research and Development tax credits.
In August 2022, the Company bought back 3,000,000 of its
ordinary shares of 1p each at a price of 9.35p per share and in
November 2022, the Company bought back a further 300,000 shares at
a price of 7p per share. In each instance the shares were
subsequently cancelled to enhance subsequent earnings per share,
and thus the value, attributable to each share remaining in
issue.
During the year, applications have been submitted to HMRC for
Research and Development tax credits in connection with various
capital projects undertaken over recent years. GBP360,000 of tax
credits has been applied for so far which would be of significant
future value.
New Auditors
The Board recognises the benefits of an appropriate level of
independent scrutiny and challenge from the Company's auditors.
However, it is at the same time mindful of the need to obtain value
for money on behalf of shareholders. Thus, despite having enjoyed a
good working relationship with the Company's previous auditors,
Crowe U.K. LLP, it was decided to appoint a new firm, RPG Crouch
Chapman LLP, to the role for the current year.
FINANCIAL RESULTS
Revenue
The Company has reported gross revenues for the year under
review of GBP34 million (2022: GBP34 million). 96% of these
revenues (GBP32.7 million) were generated by the Group's advisory
business, where the level of recurring income exceeds 80%. The
remainder was generated by the Group's model portfolio service and
its brief ownership of Hummingbird Limited.
Adjusted EBITDA
Adjusted EBITDA is defined as being Earnings before Interest
Taxation Depreciation and Amortisation as adjusted to remove the
distorting effect of one-off gains and losses arising on
acquisitions/disposals as well as other non-cash items. The Board
considers adjusted EBITDA, rather than Operating Profit, to be the
best measure of the Company's underlying performance.
The Company has reported adjusted EBITDA of GBP0.14 million
(2022: GBP1.37 million). The reduction followed the disposal of
Tavistock Wealth, which removed the largest EBITDA contributor from
the Group, leaving the EBITDA contribution from the advisory
businesses to cover the Group's full central overhead. Steps have
been taken to remedy this position, as described above.
Operating Profit
The Company is reporting an Operating loss for the year to 31
March 2023 of GBP0.94 million (31 March 2022: profit GBP30.67
million, including an exceptional gain on the sale of Tavistock
Wealth of GBP35.78 million and one-off provisions of GBP4.42
million).
The year under review has been a period of transition for the
Group and its financial performance is summarised below:
31 Mar 2023 31 Mar 2022 Movement
GBP'000 GBP'000
Revenues 33,954 34,003
------------ ------------ --------------
Adjusted EBITDA 141 1,372 90% decrease
------------ ------------ --------------
Depreciation & Amortisation (1,244) (1,051) 18% increase
------------ ------------ --------------
Share Based Payments (107) (1,010) 89% decrease
------------ ------------ --------------
(Loss) from Operations- before exceptional
items (1,210) (689) 76% increase
------------ ------------ --------------
Provision for one off reorganisation
costs - (800)
------------ ------------ --------------
Provision for new costs as a consequence
of past reorganisation - (2,250)
------------ ------------ --------------
Regulatory provisions 342 (1,372)
------------ ------------ --------------
Exceptional costs (69) -
------------ ------------ --------------
Gain on sale of subsidiary - 35,778
------------ ------------ --------------
Reported (Loss)/Profit from Operations (937) 30,667
------------ ------------ --------------
(Loss)/Earnings per share (0.25)p 5.01p
------------ ------------ --------------
Net Assets at year end 41,770 43,477 4% decrease
------------ ------------ --------------
Cash Resources at year end 9,733 15,274 36% decrease
------------ ------------ --------------
The Directors are confident that the results for the current
financial year (ending on 31 March 2024) will show a more positive
outcome and reflect the steps that have been taken to drive the
Company forward.
Dividends
In July 2022, the Company disbursed an interim dividend of 0.07p
per share, representing a notable 40% increase compared to the
dividend issued in October 2021. The Company is issuing a
subsequent interim dividend of the same value, 0.07p.
OUTLOOK
The Company is now ready to operate on a much larger scale and
has embarked on the next phase of its growth plan. A great deal has
been accomplished over the last year through the hard work of our
excellent staff. I would like to acknowledge their dedication and
support and to thank them for their considerable contribution.
The Board looks forward to the coming year with confidence and I
will update you in due course.
Oliver Cooke
Chairman
19 September 2023
TAVISTOCK INVESTMENTS PLC
STRATEGIC REPORT
FOR THE YEARED 31 MARCH 2023
Introduction
In keeping with the obligation placed upon Directors by S172 of
the Companies Act 2006, the Board, both individually and
collectively, has continued to act in a manner which they consider,
in good faith, to be most likely to promote the ongoing success of
the Company for the benefit of its members.
In doing so they have, amongst other matters, given regard to
the following:
-- the likely long-term consequences of their decisions,
-- the interests of the Company's employees,
-- the need to foster the Company's relationships with its external partners,
-- the impact of the Company's operations on both the community and the environment,
-- the desirability of maintaining the Company's reputation for
high standards of business conduct, and
-- the need to act fairly between members of the Company.
Against this background, the Board's focus has been on the
strategic and commercial development of the business together with
key areas of operational significance.
Strategic Development
As referred to in the Chairman's Statement, Tavistock has, over
the last year, been developed into a leaner and more efficient
business.
The principal objective in the year under review has been to
develop a self-sustaining business model involving three specific
initiatives.
The first being to attract and develop new advisers both from
within the industry and from elsewhere. To achieve this, management
launched the Tavistock Academy and created desk-based advice teams
to filter new business leads and to look after less complex
clients. These facilities create a career progression path for
existing staff and enable new entrants, such as graduates and
apprentices, to be developed into fully qualified financial
advisers.
The second being to increase the sources of new business leads.
Relationships with a number of new business introducers were
established during the year and the Company will shortly be
launching the "Tell Me How" financial information and advice portal
which is also expected to generate new business enquiries, as will
Precise Protect's client base(see below).
The third initiative is a significant and on-going investment in
technology to support the scalability of the business, the speed
with which acquisitions can be integrated, the flow of business
intelligence (management information) and the efficiency of
operations to enable advisers to spend more time servicing
clients.
Commercial Development
The Board's principal commercial objective has been to replace
the profit contribution generated by Tavistock Wealth, prior to its
sale in August 2021, by way of acquisition and to continue the
organic growth of the Group's advice business.
Acquisition Strategy
The Group is well placed to pursue its acquisition strategy, as
it has a further GBP14m of deferred consideration receivable from
the sale of Tavistock Wealth and has now secured access to a GBP50
million debt funding facility from the Bank of Ireland.
The Company has made one acquisition of note, Precise Protect
Limited, a profitable and fast-growing UK wide protection business
based in Bangor, Northern Ireland.
Organic Growth
The Group's advisory activities reported a 4.5% rise in gross
revenues and a 6% rise in gross profit contribution. Given the
challenging market conditions and the related falls in asset values
during the year under review, the achievement of this level of
organic growth is considered to be creditable.
Investment in LEBC
In April 2022, the Company acquired a 21% stake in LEBC Holdings
Limited. LEBC is an independent national business providing
financial advice to retail clients and employee benefits advice to
corporate clients.
The Board has been working closely with the management of LEBC
to maximise the value of this investment.
Other matters of Significance
Board Appointment
Johanna Rager, who joined Tavistock four years ago and has been
a strong contributor to the Group's Leadership Board throughout
that period, has been promoted to the Board in the role of Group
Finance and Operations Director. Her promotion is
well-deserved.
Cost Reduction
Management has continued with the planned withdrawal from loss
making or low margin areas of activity. This included the closure
of the Luxembourg RAIF (Reserve Alternative Investment Fund), which
had failed to achieve critical mass.
The Group's low margin appointed representative network has also
been downsized through the managed exit of member firms and the
transfer of selected others to Group entities that operate with
higher gross margins.
External Recognition
The high standard of Tavistock Private Client's advisory
activities continues to be recognised by the industry and I am
pleased to advise that during the year this company won several
industry awards, further details of which can be found in the
Chairman's Statement.
The high standard of the Group's operational and compliance
procedures has also been recognised by the insurance industry. I am
pleased to advise that the Group has secured the renewal of its
professional indemnity insurance cover, on the same terms and at
the same premium level as the last year, with no increase either in
excess levels or in restrictions on the scope of cover. This is an
unusual achievement in a tough and increasingly expensive,
insurance market and is a particular tribute to the Group's risk
management and compliance team.
Regulatory Regime
The Company faces the usual risks associated with operating in a
highly regulated environment, however, during the year two new,
industry wide, regulatory obligations have impacted the
Company.
These are the introduction of a new wide-ranging Consumer Duty
regime, and a sector-wide requirement for firms to conduct a review
of British Steel Defined Benefit Pension Transfer cases. Each of
these is covered in more detail in the Chairman's Statement and I
am pleased to advise that Tavistock is well placed to address both
requirements without material adverse impact on the Group's future
performance.
Shareholder Value
During the year the Board pursued several initiatives intended
to enhance shareholder value. These include the buy-back and
cancellation of 3.3 million of the Company's shares which enhanced
subsequent earnings per share, and thus the value, attributable to
the shares remaining in issue.
They also submitted applications to HMRC for Research and
Development tax credits in connection with various capital projects
undertaken over recent years. The value of tax credits applied for
to date is GBP360,000, and these credits will reduce the amount of
corporation tax that will be paid by the Company in future
years.
New Auditors
During the year the Board appointed RPG Crouch Chapman LLP to
serve as the Group's auditors in place of Crowe U.K. LLP. In the
Directors' opinion, the periodic rotation of the Group's auditors
is desirable as it ensures an appropriate level of independent
scrutiny and challenge and at the same time offers an opportunity
to secure greater value for money on behalf of shareholders.
Current Objective
In the current year the Board's objectives are to:
-- extract further operational benefits from the ongoing data mining project,
-- complete the integration of Precise Protect,
-- reap the rewards from its membership of the Group, and
-- continue to develop the Group through the completion of further acquisitions.
Financial Performance
The Company's financial performance is addressed in more detail
in the Chairman's Statement.
Corporate Governance
Corporate Governance activities are set out separately within
the Corporate Governance Report on pages 10 to 15 .
Future Prospects
It remains the Board's objective to build a larger and more
profitable business. To this end, much has been done to enable the
Company to operate more efficiently and on greater scale. The Board
has compiled a qualified list of potential acquisition targets with
which it is engaged.
The Company is well placed to progress the next stage of its
development.
Approved by the Board of Directors and signed on its behalf
by
Oliver Cooke
Chairman
19 September 2023
TAVISTOCK INVESTMENTS PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEARED 31 MARCH 2023
Introduction
The Board continues to believe that good corporate governance
reduces risk within the business, can promote confidence and trust
amongst its stakeholders and underpins the effectiveness of the
Company's management framework.
The Directors look to the Quoted Companies Alliance Corporate
Governance Code (the "QCA Code"), as being the basis of the
Company's governance framework, and consider that the Company
complies with the QCA Code so far as is practicable having regard
to the size, nature and current stage of the Company's
development.
The QCA Code includes ten broad principles that the Company
holds in mind as it seeks to deliver growth to its shareholders in
the medium and long-term. These principles and the manner in which
the Company seeks to comply with them can be summarised as
follows:
Principle 1:
Establish a strategy and business model which promote long-term
value for shareholders
-- The Board acknowledges the ongoing interest in consolidation
activity within the financial services sector.
-- The Board's strategy is to build a large and profitable
financial advisory and fund distribution business, which will
increase its value to potential consolidators and will thereby
create the potential for shareholders to achieve significant value
from their investment in the Company.
-- The Board is also focused on the development of a
self-sustaining business model, improving the recruitment and
development of advisers, maximising the sources of business
enquiries and using technology to improve operational efficiency
and regulatory oversight.
-- The Group's advisory business has grown rapidly and trades
profitably in its own right. Steps are being taken to further
improve the efficiency and profitability of its operations.
-- With shareholder support, the Board will continue to arrange
for the Company to make market purchases of its own shares. Any
shares purchased in this manner will be cancelled which will reduce
the number of shares that the Company has in issue and will further
increase the earnings per share of those shares remaining in
issue.
-- The combination of an increase in the commercial value of the
business and a reduction in the number of shares in issue, will
lead to a long-term improvement in shareholder value.
-- Key risks have been addressed in the Strategic Report.
Principle 2:
Seek to understand and meet shareholder needs and
expectations
-- The Board welcomes constructive engagement with shareholders.
-- The Company believes that shareholder expectations are most
effectively managed through the release of regulatory announcements
and through discussion with shareholders at the Company's Annual
General Meeting.
-- The Executive Directors regularly engage with the Company's
major shareholders and ensure that the views expressed by them are
communicated fully to the Board.
-- Board members make themselves available to meet with
shareholders and with potential investors as and when required.
Principle 3:
Take into account wider stakeholder and social responsibilities
and their implications for long-term success
-- The Board places great emphasis on the safety, wellbeing and
mental health of all of the Company's employees and has engaged in
a number of initiatives to improve each of these.
-- The Board recognises the importance of every member of the
Tavistock team and in doing so, has improved communication through
the launch of a Tavistock intranet site, enhanced existing
maternity pay arrangements and now provides every member of staff
with death in service insurance cover.
-- The Company also recognises the importance of engagement with
its stakeholder groups, which, in addition to its employees,
include investors, clients, strategic partners and the relevant
authorities. The Board seeks to treat each of these groups in a
fair and open manner.
-- The Company continues to support a national charity, the
Clock Tower Foundation, and to encourage the involvement of staff
in various local and national fund-raising events.
-- The Company endeavours to take account of, and to respond to,
feedback received from stakeholders.
-- Environmental responsibility and sustainability are important
to the Company, and a number of initiatives have been pursued to
improve the recycling of paper, to reduce the use of plastics and
to reduce carbon footprint through the greater use of online
meeting technology and a reduction in the number of office
premises.
-- As a contribution to the achievement of a net zero economy,
the Company continues to offer both a subsidised cycle to work
scheme, and a subsidised electric vehicle purchase scheme, both of
which have been well received. The Company has also installed a
number of charging points for use by staff driving hybrid or fully
electric vehicles.
Principle 4:
Embed effective risk management throughout the organisation,
considering both opportunities and threats
-- Last year, to improve the efficacy of its risk management
systems, the Company designed and introduced a market-leading
approach to the on-going management of compliance risk via the use
of tailored scorecards for each adviser. Scorecards assess the
performance of each adviser based on their experience, track
record, business processed by product type and risk ratings by
product type. The updating of these scorecards has now been
automated and they can be provided to each adviser, manager, and
business leader in real time.
-- The system allows each business to risk manage the levels of
pre-sale and post-sale file checking both by adviser and by product
type. Certain higher risk products such as pension transfers, VCTs
and equity release will always require pre-sale checking. However,
for most products, the level and frequency of oversight is adjusted
in real-time based on individual adviser performance risk.
-- A risk management function has been established with a
dedicated Risk Manager and a separate Risk Committee. The Risk
Manager's role is to identify, monitor and report on all aspects of
risk faced by the business. This enables the Board to determine the
level of the Company's risk appetite and to take steps in
mitigation where appropriate.
-- Commercial risks and opportunities are considered by the
Board and by the Group's Leadership Board, which is comprised of
the Executive Directors and the heads of all major Group functions.
The Leadership Board meets formally on a monthly basis.
Principle 5:
Maintain the board as a well-functioning, balanced team led by
the chair
-- The composition, roles and responsibilities of the Board and
of the various Committees are set out on page 14 of the Report and
Accounts. The number of meetings held and Directors' attendance are
also detailed.
-- To enable the Board to discharge its duties in an effective
manner, all Directors receive appropriate and timely information.
The Agenda for each meeting is determined by the Chairman who
arranges for briefing papers to be distributed to all participants
for consideration ahead of meetings. All meetings are minuted and
the accuracy of the minutes is confirmed at the subsequent meeting
before approval and signature by the Chairman.
-- The Chairman, Oliver Cooke, the Chief Executive, Brian Raven,
and the Group Finance & Operations Director, Johanna Rager,
have considerable experience of operating at board level in public
and in private companies. The Chairman is a qualified Chartered
Accountant and has served as finance director on the boards of
various public companies. The Chief Executive has held a number of
sales, operational and leadership roles at board level within
public companies. The Group Finance & Operations Director has
held senior positions within a number of international companies.
The Non-Executive Directors, Roderic Rennison and Peter Dornan,
both have extensive sector knowledge and experience and come from
strong regulatory backgrounds.
-- The Chairman devotes a minimum of two days per week and the
other Executive Directors devote the whole of their time to the
business of the Group. The Non-Executive Directors devote one to
two days per month to their duties.
-- Under the terms of their contracts, the Non-Executive
Directors are required to obtain the prior written consent of the
Board before accepting additional commitments that might conflict
with the interests of the Group or impact the time that they are
able to devote to their role as a Non-Executive Director of the
Company.
-- The Company does not currently have a separate Nominations
Committee as this is considered unnecessary given the Company's
size and stage of development. The need for such a committee will
be kept under review by the Board as the Company develops.
Principle 6:
Ensure that between them the directors have the necessary
up-to-date experience, skills and capabilities
-- The Chairman complies with the continuing professional
development requirements of the Institute of Chartered Accountants
in England and Wales, of which he is a long-standing member. The
other Executive Directors, in conjunction with other members of the
executive team, ensure that their knowledge is kept up to date on
key issues and developments pertaining to the Company, its
operational environment and to the Directors' responsibilities as
members of the Board. During the course of the year, Directors have
consulted and received advice as well as updates from the Company's
nominated advisor, company secretary, legal counsel and various
other external advisers on a number of matters, including corporate
governance. From time to time, members of the Board also
participate in industry forums.
-- Biographies for each of the Directors can be found in the Directors' Report.
Principle 7:
Evaluate board performance based on clear and relevant
objectives, seeking continuous improvement
-- The Group has established separate Remuneration and Audit
Committees through which the Non-Executive Directors are able to
monitor and assess the performance of the Executive Directors and
to hold them to account.
-- The respective Board members periodically review and
cross-evaluate the Board's performance and effectiveness in the
Company. Each member of the Board is subject to an annual fitness
and suitability assessment overseen by the Group's, Human Resources
department. In due course, the scope of this assessment will be
enhanced to focus more closely on objectives and targets for
improving performance.
-- Directors' performance is open to assessment by shareholders
and all Directors are subject to re-election by the shareholders at
least once every three years.
Principle 8:
Promote a corporate culture that is based on ethical values and
behaviours
-- The Company's ethos is, to act at all times with honour,
dependability and vigilance. The Board also actively promotes a
culture in which the client is placed at the centre of everything
that the Company does.
-- The Board places great emphasis on the wellbeing of the
Company's employees and on providing a safe and secure environment
for them. The Company's Employee Handbook provides a guideline for
employees on the day-to-day operations of the Company.
-- The Company is similarly committed to a transparent, flexible
and open culture promoting family values and avoiding
discrimination on the basis of gender, religious belief, age,
ethnicity or sexual orientation.
-- The Company is mindful of the need for, and is committed to,
environmental responsibility and sustainability.
Principle 9:
Maintain governance structures and processes that are fit for
purpose and support good decision-making by the board
-- Good decision making requires information, consideration,
discussion, and challenge followed by action, communication and the
acceptance of collective responsibility. This is accomplished
through the employment of Directors who have the confidence to
express their views, through the prior circulation of briefing
papers allowing adequate time for their proper consideration ahead
of meetings. Board meetings are openly conducted, with the accurate
minuting of outcomes and the wider communication of those outcomes
as appropriate.
-- Operational effectiveness and decision making has been
improved with the creation of a data warehouse collating data from
the Company's numerous systems, logs and spreadsheets to facilitate
the automated production of management information.
-- The avoidance of conflicts of interest, through the
delegation of responsibility for certain areas to specialist
committees, such as audit and remuneration, has strengthened the
governance structure within the Company.
-- The Company's auditors are rotated on a periodic basis to
ensure that the Company and the Board are subjected to an
appropriate level of independent scrutiny and challenge.
Principle 10:
Communicate how the Company is governed and is performing by
maintaining a dialogue with shareholders and other relevant
stakeholders
-- Information on the Company's commercial progress and its
financial performance is disseminated to shareholders and to the
market through the announcement of its full-year and half-year
results, the posting of such announcements onto the Company's
website in a timely manner and by mailing copies of the Annual
Report and Accounts to shareholders. These are also made available
for discussion with shareholders at the Company's AGM.
-- Departmental heads liaise regularly and meet formally on a
monthly basis to share and review information on the Company's
progress and to discuss progress within their specific areas of
responsibility.
-- Other members of staff are briefed informally on an ad-hoc
basis via the Tavistock intranet and formally through emails from
the Chief Executive and other senior management as appropriate. In
addition, as a series of presentations are delivered at the Annual
Company Day. On-line meetings are used whenever practical to
replace physical ones thereby reducing the level of unnecessary
business travel.
BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board is responsible for formulating, reviewing and
approving the Group's strategy, budgets and corporate actions. The
Board is also responsible for ensuring a healthy corporate culture.
The Board currently comprises three Executive Directors and two
Non-Executive Directors.
The Executive Directors are:
Oliver Cooke Chairman
Brian Raven Chief Executive Officer
Johanna Rager Group Finance & Operations Director
The Non-Executive Directors are:
Roderic Rennison
Peter Dornan
The Non-Executive Directors have a strong compliance background
and are considered to be independent. All Directors are required to
stand for re-election at least once in every three years.
All members of the Board are equally responsible for the
management and proper stewardship of the Group. The Non-Executive
Directors are independent of management and free from any business
or other relationship with the Company or Group and are thus able
to bring independent judgement to issues brought before the
Board.
The Board meets at least ten times per year and more frequently
where necessary to approve specific decisions. In the year under
review the Board met 15 times with no apologies for absence being
recorded. Directors are free to take independent professional
advice as they consider appropriate at the Company's expense.
The Board has established two Committees with clearly defined
terms of reference and detailed below are the members of the
Committees and their duties and responsibilities.
Audit Committee
The Audit Committee has primary responsibility for monitoring
the quality of internal controls and ensuring that the financial
performance of the Group is properly measured and reported. It
receives reports from the Group's management, the Company's Risk
Committee and the Company's auditors relating to the interim and
annual accounts and the accounting and internal control systems in
use throughout the Group.
The members of the Audit Committee are as follows:
Peter Dornan (Non-Executive Director) Committee Chairman
Roderic Rennison (Non-Executive Director)
Oliver Cooke (Chairman)
The Committee approves the appointment and determines the terms
of engagement of the Company's auditors and, in consultation with
the auditors, the scope of the audit. The Audit Committee has
unrestricted access to the Company's auditors.
During the year under review the Audit Committee met twice and
all members of the Committee were in attendance.
Remuneration Committee
The Remuneration Committee is comprised of the two Non-Executive
Directors, Roderic Rennison and Peter Dornan, and is chaired by
Roderic Rennison.
The Remuneration Committee reviews the performance of the
Executive Directors and approves any proposed changes to their
remuneration packages, terms of employment and participation in
share option schemes and other incentive schemes.
No Director may vote in connection with any discussions
regarding their own remuneration.
For the year under review, three Remuneration Committee meeting
were held, and both members of the Committee were in
attendance.
Nomination Committee
The Directors do not consider it necessary, or appropriate, at
present to establish a Nomination Committee given the size of the
Company. This will be kept under review as the Company
develops.
TAVISTOCK INVESTMENTS PLC
DIRECTORS' REPORT
FOR THE YEARED 31 MARCH 2023
Principal Activities, Review of the Business and Future
Developments
The principal activity of the Group during the year was the
provision of support services to a network of financial advisers.
The key performance indicators recognised by management are gross
revenues and operating profit, as represented by adjusted
EBITDA.
An overall review of the Group's performance during the year and
its future prospects is given in the Chairman's Statement and in
the Strategic Report.
Substantial shareholdings
The Company has been advised of the following interests in more
than 3% of its ordinary share capital as at 31 August 2023:
Name Number of % of
Shares Ordinary Shares
Brian Raven 70,007,932 12.49%
Andrew Staley 55,950,204 9.98%
Oliver Cooke 30,600,000 5.46%
Lighthouse Group 30,487,805 5.44%
Hugh Simon 30,000,000 5.35%
Paul Millott 28,432,106 5.07%
Kevin Mee 28,241,858 5.04%
Directors
Details of the Directors of the Company who served during the
period are as follows:
Oliver Cooke
Chairman, aged 68
Oliver has over 40 years of financial and business development
experience gained in a range of quoted and private companies
including over twenty-five years' experience as a public company
director. He has considerable experience in the fields of corporate
finance, strategic transformation, acquisitions, disposals and
fundraisings. Oliver is a Chartered Accountant and a Fellow of the
Association of Chartered Certified Accountants.
Brian Raven
Group Chief Executive, aged 67
Brian has been involved in the financial services sector since
2010. He has a wide range of business experience, having held many
sales and general management posts at senior management and board
level, including running public companies on both AIM and the
Official List. Most notably, in 1991 Brian founded Card Clear Plc,
subsequently renamed Retail Decisions plc, a business engaged in
combating the fraudulent use of plastic payment cards. He led the
company until 1998 by which time it was an international Group,
listed on AIM, with a market capitalisation of some GBP100 million.
As a principal, Brian has been responsible for identifying,
negotiating and integrating numerous acquisitions, as well as for
delivering organic growth.
Johanna Rager
Group Finance & Operations Director, aged 53
Johanna is an accomplished Finance Director with 20+ years of
professional achievement in Multinational companies. She has a
track record of delivering strategic, commercial and operational
solutions across global organisations, including the implementation
of complex mergers and acquisitions. Johanna has proven ability to
deliver top and bottom lines and adapt to ever-changing business
environments while focusing on talent development and lean
processes.
Roderic Rennison
Non-Executive Director, Chairman of Remuneration Committee, aged
68
Roderic has more than 40 years of experience in financial
services encompassing a variety of roles including sales, strategy,
product development, proposition, operations and latterly
acquisitions, mergers, and integrations together with corporate
affairs, risk and regulatory matters. He provides consultancy
services in the sector to a range of providers, fund managers and
intermediaries and particularly specialises on the Retail
Distribution Review, for which he chaired the professionalism and
reputation work stream.
Peter Dornan
Non-Executive Director, Chairman of Audit Committee, aged 67
Peter has spent more than 40 years in the financial services
industry. Having joined AEGON in 1981 as a sales consultant he
progressed through a series of sales and general management
positions to being appointed to the executive management board in
1999. He had executive responsibility for post-acquisition
integration of a number of businesses including Guardian Assurance,
Positive Solutions and Origen. Peter was also responsible for
Scottish Equitable International in Luxembourg from 1996 until 2002
and was appointed chairman of AEGON Ireland when it was launched in
2002. Since 2012, Peter has acted as a consultant to a number of
businesses within the financial services sector with a particular
emphasis on governance, risk management and financial controls.
Diversity
Tavistock is an equal opportunities employer and does not
discriminate against staff on the basis of disability, age,
religious belief, gender, ethnicity or sexual orientation.
Greenhouse gas emissions
The Group currently has minimal greenhouse gas emissions to
report from its operations and does not have responsibility for any
other emission producing sources, as defined by the Companies Act
2006 (Miscellaneous Reporting) Regulations 2018. As a consequence,
it has not published a GHG Emissions Statement.
Communication with shareholders
The Board welcomes constructive engagement with shareholders.
Each shareholder receives a copy of the annual report, which
contains the Chairman's Statement. The annual and interim reports,
together with other corporate press releases are made available on
the Company's website www.tavistockinvestments.com. The Annual
General Meeting provides a forum for shareholders to raise issues
with the Directors. The Notice convening the meeting is issued with
21 clear days' notice. Separate resolutions are proposed on each
substantially separate issue.
Going concern
Given the Company's cash resources at the year-end date and the
GBP14 million of deferred consideration receivable from the sale of
Tavistock Wealth in 2021, the Board remains confident that the
business has sufficient cash resources to meet its working capital
requirements for the foreseeable future, being at least twelve
months from the date of approval of financial statements, and to
justify use of the going concern assumption as the appropriate
basis on which to prepare the Group's accounts.
Financial instruments
Details of the use of financial instruments by the Group are
contained in Note 16 of the financial statements.
Share capital
During the year the Company bought back and cancelled 3.3
million of its own shares. It also issued 2.48 million new shares
upon the exercise of share options. Full details of the changes to
share capital during the year are summarised in Note 17 to the
accounts.
Charitable and Political Donations
The Group made GBP3,790 in charitable donations in the year
(2022: GBP23,800).
Investment
In April 2023, the Company acquired the business of Precise
Protect Limited, a profitable and fast-growing protection business
based in Bangor, Northern Ireland. This business is expected to
contribute significantly to the Company's growth in the current
financial year.
Dividends
In July 2022, the Company disbursed an interim dividend of 0.07p
per share, representing a notable 40% increase compared to the
dividend issued in October 2021. The Company is issuing a
subsequent interim dividend of the same value, 0.07p.
Auditors
In February 2023, the Company appointed RPG Crouch Chapman LLP
to serve as the Company's auditors. A resolution reappointing RPG
Crouch Chapman LLP will be proposed at the Annual General Meeting
in accordance with S489 of the Companies Act 2006.
Supplier payment policy
The Group's policy is to agree terms of payment with suppliers
when entering into a transaction, ensure that those suppliers are
aware of the terms of payment by including them in the terms and
conditions of the contract and pay in accordance with contractual
obligations. Trade creditors at 31 March 2023 represented 28 days'
purchases (2022: 27 days).
Internal control
The Group has adopted the QCA's Corporate Governance Code. The
key elements of the internal control systems, which have regard to
the size of the Group, are that the Board meets regularly and takes
the decisions on all material matters, the organisational structure
ensures that responsibilities are defined, and authority only
delegated where appropriate, and that regular management accounts
are presented to the Board to enable the financial performance of
the Group to be analysed.
The Directors acknowledge that they are responsible for the
system of internal control, which is established in order to
safeguard the assets, maintain proper accounting records and ensure
that financial information used within the business or published is
reliable. Any such system of control can, however, only provide
reasonable, not absolute, assurance against material misstatement
or loss.
Directors' responsibilities
The Directors are responsible for preparing the annual report
and financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial period. Under that law the Directors
have elected to prepare the Group financial statements in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and in accordance
with UK adopted international accounting standards including
Financial Reporting Standard 101, the Financial Reporting Standard
applicable in the UK and Republic of Ireland and applicable law.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss of the Group for that period.
The Directors are also required to prepare financial statements
in accordance with the rules of the London Stock Exchange for
companies trading securities on the Alternative Investment
Market.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently,
-- make judgements and estimates that are reasonable and prudent,
-- for the Group financial statements, state whether they have
been prepared in accordance with international accounting standards
in conformity with the requirements of the Companies Act 2006,
-- for the parent Company financial statements, state whether
applicable UK adopted international accounting standards including
Financial Reporting Standard 101 have been followed, subject to any
material departures disclosed and explained in the financial
statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and the parent
Company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the requirements of the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Company and for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Company's website in accordance
with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from
legislation in other jurisdictions. The maintenance and integrity
of the Company's website is the responsibility of the Directors.
The Directors' responsibility also extends to the ongoing integrity
of the financial statements contained therein.
Directors' interests
The Directors' beneficial interests in the Ordinary Share
Capital and options to purchase such shares are as follows:
Ordinary shares of 1p each
31 March 2023 31 March 2022
Share options Shares Share options Shares
Executive Directors:
Oliver Cooke 30,000,000 30,600,000 30,000,000 30,367,756
Brian Raven 40,000,000 70,007,932 40,000,000 68,759,362
Johanna Rager 5,000,000 2,276,000 - -
Non-Executive Directors:
Roderic Rennison - 705,398 - 705,398
Peter Dornan - 250,000 - 250,000
Executive Date Weighted No. as at No. granted No. as
Directors of Grant Average Exercise 31(st) March during at 31(st)
Price 2023 the year March 2023
Brian Raven 14/06/2021 5.25p 40,000,000 - 40,000,000
Oliver Cooke 14/06/2021 5.25p 30,000,000 - 30,000,000
Johanna Rager 04/01/2023 6.65p 4,000,000 1,000,000 5,000,000
Directors' statements as to disclosure of information to
auditors
The Directors have taken all of the steps required to make
themselves aware of any information needed by the Group's auditors
for the purposes of their audit and to establish that the auditors
are aware of that information.
The Directors are not aware of any audit information of which
the auditors are unaware.
Approved by the Board of Directors and signed on its behalf
by
Oliver Cooke
Chairman
19 September 2023
TAVISTOCK INVESTMENTS PLC
AUDIT COMMITTEE REPORT
FOR THE YEARED 31 MARCH 2023
On behalf of the Board, I am pleased to present the Audit
Committee report for the financial year ended 31 March 2023.
Principal Responsibilities of the Committee
-- Ensuring the financial performance of the Group is properly reviewed, measured and reported;
-- Monitoring the quality and adequacy of internal controls and
internal control systems implemented across the Group;
-- Receiving and reviewing reports from the Group's management
and auditors relating to the interim and annual accounts;
-- Reviewing reports from the Company's Risk Committee and
considering risk management policies and systems;
-- Advising on the selection, appointment, re-appointment and
remuneration of independent external auditors and scheduling
meetings with external auditors, independent of management where
appropriate, for discussions and reviews; and,
-- Reviewing and monitoring the extent and independence of
non-audit services provided by external auditors.
Members of the Committee
The Committee members are the two Non-Executive Directors, Peter
Dornan (Committee Chairman) and Roderic Rennison, and Oliver Cooke
who is a Chartered Accountant and has previously served as a
partner in public practice.
The Committee met twice during the year, with all members in
attendance.
Audit Process
The audit process commenced with the preparation by the auditors
of an audit plan, which contained information regarding the
proposed audit process, timetable, targeted areas and the general
scope of work and considered any pertinent matters or areas for
special inclusion.
Following the audit, an Audit Findings Report was prepared by
the auditors and submitted to the Audit Committee, and this was
followed by a conference call with the Committee to review and
discuss the contents of the Report. The Audit Committee then
provided a report to the Board together with its recommendations.
For the year ended 31 March 2023, no major areas of concern were
highlighted.
Risk Management and Internal Control
As referred to under Principle 4 of the Corporate Governance
Report, the Group has established a separate Risk Committee, whose
role is to identify, monitor and report on the risks faced by the
Company. The Audit Committee reviews reports produced by the Risk
Committee from time to time and considers that the framework is
operating effectively.
The Audit Committee approved the rotation of the Company's
auditors and oversaw the selection and appointment of RPG Crouch
Chapman LLP as auditors.
The Audit Committee reviewed the non-audit services provided by
the Company's auditors and considered that there was no threat to
their independence in the provision of these services and that
satisfactory controls were in place to ensure this
independence.
Internal Audit
At present, the Group does not have an internal audit function
and the Committee believes that despite this, management is able to
derive assurances as to the adequacy and effectiveness of internal
controls and risk management procedures.
Approved by the Committee and signed on its behalf by
Peter Dornan
Committee Chairman
19 September 2023
TAVISTOCK INVESTMENTS PLC
REMUNERATION COMMITTEE REPORT
FOR THE YEARED 31 MARCH 2023
Compliance
Described below are the principles that the Group has applied in
relation to Directors' remuneration.
The Remuneration Committee
For reasons of independence the only members of the Remuneration
Committee are the Company's two Non-Executive Directors, Roderic
Rennison (Committee Chairman) and Peter Dornan.
The Committee is mindful of the need to attract, retain and
reward key staff. It reviews the scale and structure of the
Executive Directors' and senior employees' remuneration, the terms
of their service agreements and the extent of their participation
in share option schemes and any other bonus arrangements.
The remuneration of, and the terms and conditions applying to,
the Non-Executive Directors are determined by the entire Board.
During the year under review, the Remuneration Committee met
three times with both members in attendance.
Service contracts
The term of the Directors' service contracts can be summarised
as follows:
Oliver Cooke Start Date: 3 May Terminable on six months' notice
2013
Brian Raven Start Date: 12 To 31 March 2024, terminable
May 2014 thereafter on twelve months'
notice
Johanna Rager Start Date: 11 To 31 December 2024, terminable
January 2023 thereafter on twelve months'
notice
Non-executive Directors
Roderic Rennison Start Date: 12 Initial term 2 years, terminable
May 2014 at any time on three months'
notice
Peter Dornan Start Date: 22 Initial term 2 years, terminable
August 2017 at any time on three months'
notice
Directors' remuneration
Details of each Director's remuneration are provided in Note 6
to the financial statements entitled Staff Costs.
Directors' interest in shares
Details of the Directors beneficial shareholdings as at 31 March
2023 can be found in the Directors Report.
Approved by the Committee and signed on its behalf by
Roderic Rennison
Committee Chairman
19 September 2023
TAVISTOCK INVESTMENTS PLC
INDEPENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF TAVISTOCK
INVESTMENTS PLC
FOR THE YEARED 31 MARCH 2023
Opinion
We have audited the financial statements of Tavistock
Investments Plc (the 'Company') and its subsidiaries (the 'Group')
for the year ended 31 March 2023 which comprise the Consolidated
statement of comprehensive income, the Consolidated statement of
financial position, the Consolidated statement of changes in
equity, the Consolidated statement of cash flows, the Company
statement of financial position, the Company statement of changes
in equity and the related notes to the financial statements,
including a summary of significant accounting policies.
The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable law and
International Financial Reporting Standards as adopted in the
United Kingdom (IFRS). The Company financial statements have been
prepared in accordance with applicable law and United Kingdom
Accounting Standards, including FRS 101 Reduced Disclosure
Framework (UK GAAP).
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the Company's affairs as at 31 March
2023 and of the Group's loss for the year then ended;
-- the Group financial statements have been properly prepared in accordance with IFRS;
-- the Company financial statements have been properly prepared
in accordance with UK GAAP; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
and the parent company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in the
UK, including the FRC's Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
director's use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the directors' assessment of the entity's ability to
continue to adopt the going concern basis of accounting
included:
-- Review budgets and cash flows projections up to 31 March 2026;
-- Comparison of budget to past performance;
-- Sensitise cash flows for variations in trading performance
and working capital requirements;
-- Consider if there is any other information brought to light
during the audit that would impact on the going concern assessment;
and
-- Review of working capital facilities and assess headroom available in the projections.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Tavistock Investments Plc's ability to continue as a going concern
for a period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Our approach to the audit
In planning our audit, we determined materiality and assessed
the risks of material misstatement in the financial statements. In
particular, we looked at where the directors made subjective
judgements, for example in respect of significant accounting
estimates. As in all of our audits, we also addressed the risk of
management override of internal controls, including evaluating
whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
We tailored the scope of our audit to ensure that we performed
sufficient work to be able to issue an opinion on the financial
statements as a whole, taking into account the structure of the
Group and the Company, the accounting processes and controls, and
the industry in which they operate. We performed full-scope audits
of the material components of the Group.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement we identified (whether or
not due to fraud), including those which had the greatest effect
on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. Each
matter identified was addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
The key audit matters identified are listed below.
Carrying value of intangible assets
At the year-end, the Group held Our work included:
GBP19.6m (2022: GBP18.3m) of intangible * Reviewing the initial goodwill calculation, agreeing
assets, of which GBP12.6m relates consideration paid to the purchase agreement and the
to goodwill, GBP4.9m to client net assets acquired to the company balance sheet at
lists, and GBP2.1m to internally the date of acquisition;
generated assets.
In accordance with IAS36 Impairment
of Assets, entities are required * Reviewing management's goodwill impairment review and
to conduct annual impairment tests considering this for reasonableness, including
for certain intangible assets. challenging key assumptions in the model and using
Given the subjectivity of estimates sensitivity analysis where relevant; and
involved, we consider the carrying
value of goodwill to be a key
audit matter. * Reviewing the individual books of business across the
companies and the impairment review prepared by
management, flexing these accordingly to review for
any indicators of impairment.
-------------------------------------------------------------
Revenue recognition
Revenue recognition has a presumed Our audit work included:
risk of fraud under International * Performing detailed walkthroughs to verify the
Auditing Standards. operation of controls in place;
The majority of fees are in relation
to initial and ongoing services
in terms of revenue recognised. * Testing a sample of transactions throughout the year
Given the significant judgements to agree to external supporting documents;
in the estimated outcomes of open
contractual positions at the period
end and unsettled at the date * Performing analytical procedures by month and between
of approval of the financial statements, each business unit, investigating significant
we consider revenue recognition fluctuations; and
to be a key audit matter.
* Performing cut off testing to ensure revenue has been
recorded in the correct period and reviewed the
accuracy of accrued income at the year-end.
-------------------------------------------------------------
Legal and provisions
As the Group operates in the regulated Our audit work included:
area of financial services, it * Reviewing reasonableness of the provisions brought
is exposed to the risk of claims forward;
with respect to current and historic
work performed for clients. At
the year-end, the Group recognised * Vouching expected claims/workings through to
provisions of GBP6.0m (2022: GBP8.0m) documentation;
with respect to such claims.
Under IAS 37, provisions must
be recognised when it is probably * Tracing claims completed in the year through to bank
that an outflow of cash or other statements;
economic resource will be required
to settle the provision.
Given the subjective nature of * Discussions with management about any open cases and
the estimates involved, we consider claims;
the carrying value of legal provisions
to be a key audit matter.
* Reviewing and considering the adequacy of the
disclosure within the financial statements.
------------------------------------------------------------
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
We have based materiality on 2% of revenue for the operating
components. This benchmark is considered to be the most significant
determinant of the group's financial performance used by the users
of the financial statements. Overall materiality for the Group as a
whole was set at GBP0.7m. For each component, the materiality was
set at a lower level. The Company materiality was set at GBP0.5m,
based on 2% of gross assets, capped at 75% of group materiality as
that is considered the most appropriate measure for a holding
company.
We agreed with the Audit Committee that we would report on all
differences in excess of 5% of materiality relating to the group
financial statements. We also report to the Audit Committee on
financial statement disclosure matters identified when assessing
the overall consistency and presentation of the consolidated
financial statements.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We
have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and its environment obtained in the course of
the audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors'
responsibilities on page 19, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group's and the parent company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor's report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud, is detailed below:
-- We obtained an understanding of the legal and regulatory
frameworks within which the Company/Group operates focusing on
those laws and regulations that have a direct effect on the
determination of material amounts and disclosures in the financial
statements. The laws and regulations we considered in this context
were the Companies Act 2006 and relevant taxation legislation.
-- We identified the greatest risk of material impact on the
financial statements from irregularities, including fraud, to be
the override of controls by management. Our audit procedures to
respond to these risks included enquiries of management about their
own identification and assessment of the risks of irregularities,
sample testing on the posting of journals and reviewing accounting
estimates for biases.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our Auditor's Report.
Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Mark Wilson MA, FCA
Senior Statutory Auditor
for and on behalf of RPG Crouch Chapman LLP
Chartered Accountants and Registered Auditors
5th Floor, 14-16 Dowgate Hill
London
EC4R 2SU
19 September 2023
RPG Crouch Chapman LLP is a limited liability partnership
registered in England and Wales with registered number
OC375705.
TAVISTOCK INVESTMENTS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 MARCH 2023
Year Year
ended ended
31 March 31 March
2023 2022
Note GBP'000 GBP'000
Revenue 3 33,954 34,003
Cost of sales 3 (22,717) (22,053)
Gross profit 11,237 11,950
Administrative expenses 3 (12,174) (17,061)
Gain on sale of subsidiary - 35,778
(Loss)/Profit from Total Operations 4 (937) 30,667
------------------- ----------------
MEMORANDUM ONLY- Adjusted EBITDA 141 1,372
9 &
Depreciation & Amortisation 10 (1,244) (1,051)
Share Based Payments (107) (1,010)
Provision for one off reorganisation costs 14 - (800)
Provision for new costs as a consequence
of past reorganisation 14 - (2,250)
Regulatory provisions 14 342 (1,372)
Exceptional costs (69) -
Gain on sale of subsidiary - 35,778
(Loss)/Profit from Operations (937) 30,667
----------------------------------------------- ----- -------------------
Finance income/(costs) 139 (144)
LLP members remuneration charged as an
expense (551) (519)
Share of loss in associate (219) -
(Loss)/Profit before taxation (1,568) 30,004
Taxation 7 173 (363)
(Loss)/Profit after taxation and attributable
to equity holders of the parent and total
comprehensive income for the year (1,395) 29,641
=================== ================
(Loss)/Profit per share
Basic 8 (0.25)p 5.01p
=================== ================
Diluted 8 (0.25)p 4.40p
=================== ================
No other comprehensive income during the year (2022 -
GBPNil)
The notes below form part of the Group financial statements.
TAVISTOCK INVESTMENTS PLC Company number: 05066489
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
31 March 2023 31 March
2022
Note GBP'000 GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Tangible fixed assets 9 1,971 1,732
Intangible assets 10 19,560 18,309
Investment in associates 11 10,035 -
Trade and other receivables 12 8,740 12,090
----------
Total non-current assets 40,306 32,131
Current assets
Trade and other receivables 12 10,473 13,039
Cash and cash equivalents 9,733 15,274
--------------
Total current assets 20,206 28,313
Total assets 60,512 60,445
LIABILITIES
Current liabilities 13 (10,726) (6,722)
Non-current liabilities
Loan & Lease Liability 13 (999) (732)
Payments due regarding purchase
of client lists 13 (923) (1,298)
Provisions 14 (6,004) (7,955)
Deferred taxation 15 (89) (262)
-------------- ---------
Total liabilities (18,741) (16,968)
Total net assets 41,771 43,477
========== ==========
Capital and Reserves
Share Capital 17 5,567 5,578
Share Premium 17 1,614 1,541
Capital Redemption Reserve 17 534 501
Retained Earnings 34,056 35,857
Total equity 41,771 43,477
========== ==========
The financial statements were approved by the Board and
authorised for issue on 19 September 2023.
Oliver Cooke
Chairman
The notes below form part of the Group financial statements.
TAVISTOCK INVESTMENTS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MARCH 2023
Capital
Share Share Redemption Retained Total
Capital Premium Reserve Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 March 2021 6,079 1,541 - 8,114 15,734
--------- --------- ------------ ---------- ---------
Profit after tax and
total comprehensive
income - - - 29,641 29,641
Equity settled share
based payments - - - 1,013 1,013
Buy-back of shares (501) - 501 (2,607) (2,607)
Dividend payment - - - (304) (304)
31 March 2022 5,578 1,541 501 35,856 43,477
--------- --------- ------------ ---------- ---------
Loss after tax and
total
comprehensive
income - - - (1,395) (1,395)
Equity settled share
based payments - - - 107 107
Buy-back of shares (33) 73 33 (302) (230)
Dividend received - - - 373 373
Closure of
subsidiary - - - (192) (192)
Dividend payment - - - (391) (391)
Share options
exercised 22 - - - 22
31 March 2023 5,567 1,614 534 34,056 41,771
--------- --------- ------------ ---------- ---------
The notes below form part of the Group financial statements.
TAVISTOCK INVESTMENTS PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 MARCH 2023
Year ended Year ended
31 March 31 March
2023 2022
GBP'000s GBP'000s
Cash flow from operating activities
(Loss)/Profit from normal Operations (1,568) 30,004
Adjustments for:
Share based payments 107 1,010
Depreciation of tangible fixed assets 681 649
Amortisation of intangible assets 563 402
Movement on one-off reorganisation provision - 800
Provision for new costs as a consequence
of past reorganisation - 2,250
Regulatory provisions (342) 1,372
Exceptional costs 69 -
Finance (income)/costs (139) 144
Tax paid - (397)
Gain on sale of subsidiary - (35,778)
Cash flows from operating activities before
changes in working capital (629) 456
Decrease/(increase) in trade and other
receivables 111 (3,318)
(Decrease)/increase in trade and other
creditors (1,274) 3,977
Cash (used)/generated in Operations (1,792) 1,115
Investing activities
Intangible assets- client lists and internally
developed assets (732) (434)
Purchase of tangible fixed assets (1,176) (1,354)
Purchase of associate (6,060) -
Deferred consideration payments (1,621) (1,543)
Cash received on sale of client list 100 -
Cash paid for subsidiary (1,515) -
Cash received on sale of subsidiary entities 7,461 19,288
Net cashflow (used)/generated from investing
activities (3,543) 15,957
Financing activities
Finance income/(costs) 139 (144)
New leases 698 863
Lease repayment (445) (476)
Loan Repayments - (1,493)
CBILS repayment - (2,094)
Buy-back of shares (302) (2,607)
Dividend payment (391) (304)
Exercise of share options 95 -
------------------ ------------------
Net cashflow from financing activities (206) (6,255)
Net change in cash and cash equivalents (5,541) 10,817
Cash and cash equivalents at start of
the year 15,274 4,457
------------------ ------------------
Cash and cash equivalents at end of the
year 9,733 15,274
------------------ ------------------
The notes below form part of the Group financial statements.
Year ended Year ended
31 March 31 March
2023 2022
GBP'000 GBP'000
Net (decrease)/increase in cash and cash equivalents (5,541) 10,817
New lease liability (698) (861)
Lease repayment 445 476
Repayment of loans - 3,587
-------------------- ------------------
Movement in net debt in the
year (5,794) 14,019
Net debt at 1 April 2022 14,059 40
-------------------- ------------------
Net debt at 31 March 2023 8,265 14,059
==================== ==================
The net debt comprises:
Year ended Year ended
31 March 31 March
2023 2022
GBP'000 GBP'000
Cash 9,733 15,274
Current leases (469) (483)
Non-current leases (999) (732)
-------------------- ------------------
Net debt at 31 March 2023 8,265 14,059
-------------------- ------------------
Reconciliation of net
debt:
2022 Cashflows New Leases 2023
Lease liabilities 1,211 (446) 698 1,463
------------ ------------- --------------------- ------------
Long term debt 1,211 (446) 698 1,463
------------ ------------- --------------------- ------------
The notes below form part of the Group financial statements.
TAVISTOCK INVESTMENTS PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 MARCH 2023
1. ACCOUNTING POLICIES
Principal accounting policies
Tavistock Investments Plc ("The Company") is a public company
limited by share capital, incorporated in the United Kingdom with
registered company number 05066489 and its registered office is at
1 Queen's Square, Ascot Business Park, Lyndhurst Road, Ascot,
Berkshire, SL5 9FE. The principal accounting policies applied in
the preparation of these consolidated financial statements are set
out below. These policies have been consistently applied to all the
periods presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements have been prepared in
accordance with UK adopted International Financial Reporting
Standards ("IFRS") in conformity with the requirements of the
Companies Act 2006.
The financial statements are presented in pounds sterling and
all values are rounded to the nearest thousandth (GBP'000), except
when otherwise indicated.
Basis of Consolidation
The Group comprises a holding company and several individual
subsidiaries and all of these have been included in the
consolidated financial statements in accordance with IFRS10
Consolidated Financial Statements and the principles of acquisition
accounting as laid out by IFRS 3 Business Combinations.
Subsidiaries are consolidated from the date of their acquisition,
being the date on which the group obtains control and continue to
consolidate until the date such control ceases. Control comprises
the power to govern the financial and operating policies of the
subsidiary so as to obtain benefit from its activities.
Revenue recognition
Revenues within the advisory business are predominantly
comprised of advisory support commissions. Income is recognised and
accrued for when control has transferred, the resulting cash will
then be received at the point the underlying transaction
settles.
Revenues within the investment management business are
calculated as a percentage of funds under management. Income is
calculated daily and is received and recognised monthly. The
charges are collected directly from the assets held and there are
no significant payment terms. All revenues arise over time and are
received in arrears, none are linked to subsequent performance
obligations.
Intangible assets
Intangible assets include goodwill arising on the acquisition of
subsidiaries and represents the difference between the fair value
of the consideration payable and the fair value of the net assets
that have been acquired.
Also included within intangible assets are various assets
separately identified in business combinations (such as FCA
permissions, established systems and processes, adviser and client
relationships and brand value) to which the Directors have ascribed
a commercial value and a useful economic life. The ascribed value
of these intangible assets is being amortised on a straight-line
basis over their estimated useful economic life, which is generally
considered to be between 5 and 10 years.
During the year the Group has invested in the development of a
number of key initiatives designed to generate additional FUM
inflows. Where appropriate, this expenditure has been capitalised
as intangible assets.
Intangible assets are initially recognised at cost.
Costs that are directly associated with the production of
identifiable and unique products controlled by the Group and
capable of producing future economic benefits are recognised as
intangible assets. Direct costs include employee costs and directly
attributable overheads. After recognition, under the cost model,
intangible fixed assets are measured at cost less any accumulated
amortisation and any accumulated impairment losses.
Development costs are recognised as assets only if all of the
following conditions are met:
-- an asset is created that can be separately identified,
-- it is probable that the asset created will generate future
economic benefits; and
-- the development cost of the asset can be measured
reliably.
Client lists, regulatory approvals and systems and internally
developed assets are considered to have a finite useful life and
are only amortised once ready for use. If a reliable estimate of
the useful life cannot be made, the useful life shall not exceed 10
years.
Financial assets
Deferred consideration received, accrued income and receivables:
These assets are deemed to be non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They arise principally through the provision of goods and
services to customers (trade receivables), but also incorporate
other types of contractual monetary asset. They are carried at
amortised cost using the effective interest method.
Financial liabilities
Payments made under leases (net of any incentives received from
the lessor) have been recognised in accordance with IFRS 16 as
follows:
The Group's eases primarily relate to properties. Lease terms
are negotiated on an individual basis and contain a wide range of
different terms and conditions. Property leases will often include
extension and termination options, open market rent reviews, and
uplifts.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the individual lessee company's incremental
borrowing rate taking into account the duration of the lease. The
weighted average lessee's incremental borrowing rate applied to
lease liabilities recognised in the statement of financial position
at the date of initial application.
The lease liability is subsequently measured at amortised cost
using the effective interest method, with the finance cost charged
to profit or loss over the lease period to produce a constant
periodic rate of interest on the remaining balance of the
liability.
The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or before the commencement date, plus
any initial direct costs incurred, less any lease incentives
received. The right-of-use asset is typically depreciated on a
straight-line basis over the lease terms. In addition, the
right-of-use asset may be adjusted for certain remeasurements of
the lease liability, such as market rent review uplifts. Please
refer to Note 9 for further details.
Share based payments
Where share options are awarded to employees, the fair value of
the options at the date of grant is charged to the statement of
comprehensive income on a straight-line basis over the vesting
period. Non-market vesting conditions are taken into account by
adjusting the number of options expected to vest at each statement
of financial position date so that, ultimately, the cumulative
amount recognised over the vesting period is based on the number of
options that eventually vest. Market vesting conditions are
factored into the fair value of the options granted. The cumulative
expense is not adjusted for failure to achieve a market vesting
condition.
Fair value is calculated using the Black-Scholes model, details
of which are given in Note 18.
Tangible fixed assets
Tangible fixed assets are stated at cost net of accumulated
depreciation and provision for impairment. Depreciation is provided
on all tangible fixed assets, at rates calculated to write off the
cost less estimated residual value, of each asset on a
straight-line basis over its expected useful life. The residual
value is the estimated amount that would currently be obtained from
disposal of the asset if the asset were already of the age and in
the condition expected at the end of its useful economic life.
The method of depreciation for each class of depreciable asset
is:
Computer equipment - 3 years straight line
Office fixtures, fittings & equipment - 5 years straight line
Motor Vehicles - 5 years straight line
Impairment of Assets
Impairment tests on goodwill are undertaken annually at the
reporting date. The recoverable value of goodwill is estimated on
the basis of value in use, defined as the present value of the cash
generating units with which the goodwill is associated. When value
in use is less than the book value, an impairment is recorded and
is irreversible.
In assessing the carrying value of Assets, the Directors have
used 5-year forecasts and discounted the anticipated future
cashflows by entity and assets class over 5 years and then in
perpetuity using a discount rate of 15%. In all scenarios, the
recoverable amount exceeded the carrying value.
Other non-financial assets are subject to impairment tests
whenever circumstances indicate that their carrying amount may not
be recoverable. Where the carrying value of an asset exceeds its
estimated recoverable value (i.e.the higher of value in use and
fair value less costs to sell), the asset is written down
accordingly. Where it is not possible to estimate the recoverable
value of an individual asset, the impairment test is carried out on
the asset's cash-generating unit. The carrying value of tangible
fixed assets is assessed in order to determine if there is an
indication of impairment. Any impairment is charged to the
statement of comprehensive income. Impairment charges are included
under administrative expenses within the consolidated statement of
comprehensive income.
Taxation and deferred taxation
Corporation tax payable is provided on taxable profits at
prevailing rates.
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the Statement of
Financial Position differs from its tax base, except for
differences arising on:
-- the initial recognition of goodwill; and
-- the initial recognition of an asset or liability in a
transaction which is not a business combination and at the time of
the transaction affects neither accounting nor taxable profit.
Recognition of deferred tax assets is restricted to those
instances where it is probable that future taxable profit will be
available against which the asset can be utilised. The amount of
the asset or liability is determined using tax rates that have been
enacted or substantively enacted by the reporting date and are
expected to apply when the deferred tax liabilities/(assets) are
settled/(recovered).
Deferred tax assets and liabilities are offset when the Group
has a legally enforceable right to offset current tax assets and
liabilities and the deferred tax assets and liabilities relate to
taxes levied by the same tax authority on either:
-- the same taxable Group company; or
-- different Group entities which intend either to settle
current tax assets and liabilities on a net basis, or to realise
the assets and settle the liabilities simultaneously, in each
future period in which significant amounts of deferred tax assets
or liabilities are expected to be settled or recovered.
Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the
obligation, and the amount can be reliably estimated. Provisions
are measured at the present value of management's best estimate of
the expenditure required to settle the present obligation at the
end of the reporting period.
Where some or all of the expenditure required to settle a
provision is expected to be reimbursed by another party, the
reimbursement is recognised when, and only when, it is virtually
certain that reimbursement will be received if the Company settles
the obligation. The reimbursement is treated as a separate asset.
The amount recognised for the reimbursement cannot exceed the
amount of the provision.
As referenced in Note 14, settlement in relation to the claims
provision has been made on a case by case basis in respect of the
cost of defending claims and, where appropriate, the estimated cost
of settling claims. Where recovery of the cost of settlement is
expected to be virtually certain, a corresponding asset is
recognised. Any net provision expense is recognised in the Group's
statement of comprehensive income.
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of these financial statements has required
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses
during the reporting period. These judgements and estimates are
based on management's best knowledge of the relevant facts and
circumstances, having regard to prior experience, but actual
results may differ from the amounts included in the financial
statements. Information about such judgements and estimations is
contained below, as well as in the accounting policies and
accompanying notes to the financial statements.
Impairment of goodwill and other intangible assets
The Group is required to test, on an annual basis, whether
goodwill has suffered any impairment. Other intangible assets are
tested whenever circumstances indicate that their carrying value
may not be recoverable. The recoverable amount is estimated based
on value in use calculations.
In assessing the carrying value of Goodwill the Directors have
used 5-year forecasts which have been discounted by entity over 5
years and then in perpetuity using a discount rate of 15%. The
forecast assumes no annual growth in revenue after year one and a
2% annual increase in costs. Sensitivity analysis was also
performed alongside this to create various scenarios, with
different growth rates. In all scenarios, the recoverable amount
exceeded the carrying value.
Internally Developed Intangible Assets
Included in the amount capitalised in respect of key initiatives
are apportioned staff costs. Staff costs are capitalised where the
relevant staff member is directly involved in the product
development process. Management estimates the amount of time each
employee has spent on each project during the reporting period and
prorate the staff costs accordingly.
Share based payments
The share-based payment charge to the Profit or Loss account is
estimated from the operation of the Black-Scholes Model in respect
of share options granted by the Company as referred to in more
detail in Note 18.
Amortisation of Development costs and other Intangibles
Product development costs are being amortised over 10 years. The
estimated useful economic life of the intangible assets are based
on management's judgement and experience. When management
identifies that the actual useful economic life differ materially
from the estimates used to calculate amortisation, that charge is
adjusted accordingly.
Claims provision
As outlined in Note 14, three provisions have been made in
relation to potential exposure in relation to historic advice.
SEGMENTAL INFORMATION
3.
A segmental analysis of revenue and expenditure for the year
is:
Group Investment Advisory Investment Advisory
(Plc) Management Business 2023 Group (Plc) Management Business 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 245 965 32,744 33,954 135 2,550 31,319 34,004
Cost of
sales (336) (276) (22,105) (22,717) (303) (388) (21,362) (22,053)
Gross
profit (91) 689 10,639 11,237 (168) 2,162 9,957 11,951
---------- ---------- ---------- -------- ----------- ---------- ---------- --------
Attributed
Expenses (4,069) (732) (7,539) (12,340) (3,213) (1,069) (7,348) (11,630)
Other Administrative expenses
Share based payments (107) (1,010)
Provision for one off reorganisation costs - (800)
Provision for new costs as a consequence of past
reorganisation - (2,250)
Regulatory provisions 342 (1,372)
Exceptional costs (69) -
Gain on sale of subsidiary - 35,778
----- -------
(Loss)/Profit from operations (937) 30,667
===== =======
The segmental analysis above reflects the parameters applied by
the Board when considering the Group's monthly management accounts.
The Directors do not make reference to segmental analysis as part
of the day-to-day assessment of the business therefore have not
disclosed a segmental consolidated statement of financial position
within the accounts.
During the year under review the Group's revenue was generated
exclusively within the UK.
In calculating the gain on sale of subsidiary, the deferred
consideration of GBP20 million has been discounted by GBP1.5
million to reflect the time cost of money.
4. (LOSS)/PROFIT FROM OPERATIONS
2023 2022
GBP'000 GBP'000
This is arrived at after charging:
Staff costs (see Note 6) 8,711 9,322
Depreciation on tangible fixed assets 681 649
Amortisation of intangible fixed assets 563 402
Lease expense- property 545 414
Provision for one off reorganisation costs - 800
Provision for new costs as a consequence of
past reorganisation - 2,250
Regulatory provisions (342) 1,372
Exceptional costs 69 -
Gain on sale of subsidiary - 35,778
Auditor's remuneration in respect of the Company 8 9
Audit of the Group and subsidiary undertakings 58 68
Auditor's remuneration- non-audit services-
Interim 8 3
74 80
======== ========
5. BUSINESS COMBINATIONS
On 23 May 2022 the Group acquired LEBC Hummingbird Limited, a
subsidiary of LEBC Group Limited, obtaining 100% ownership of the
ordinary shares. The acquisition carried a value of GBP3 million,
with GBP1.5 million settled in immediate cash payment, while the
remaining GBP1.5 million was contingent upon deferred cash
considerations. During its tenure within the Tavistock Group,
Hummingbird Limited showcased strong performance metrics, achieving
a revenue of GBP451,000, an EBITDA of GBP328,000, and a profit of
GBP328,000.
Hummingbird Limited has specialised in providing research on
asset class allocations tailored for utilisation within funds and
model portfolios. Its services are meticulously designed to assist
investment managers in aligning their investment solutions with
distinct risk profiles, as identified through the administration of
"attitude to risk" questionnaires completed by clients.
On 17 August 2022, Hummingbird Limited was divested back to LEBC
Group Limited under the same terms as the initial acquisition,
amounting to GBP3 million. A sum of GBP1.5 million in cash was
reimbursed to Tavistock in accordance with the established
agreement.
6. STAFF COSTS
2023 2022
GBP'000 GBP'000
Staff costs for all employees, including Directors and
key management consist of:
Wages, fees and salaries 7,379 7,264
Social security costs 827 721
Pensions 398 327
-------------------------- ----------------
8,604 8,312
Share based payment charge 107 1,010
8,711 9,322
========================== ================
2023 2022
The average number of employees of the group Number Number
during the year was as follows:
Directors and key management 12 11
Operations and administration 149 133
161 144
========================== ================
The remuneration of the highest paid director was GBP474,769
(2022: GBP462,284). The total remuneration of key management
personnel was GBP2,438,258 (2022: GBP2,268,787). Included in this
figure are pension costs amounting to GBP242,535 (2022:
GBP187,748).
Outstanding pension commitments included in the balance sheet
amounted to GBP41,173 (2022: GBP39,592).
All pension contributions represent payments into defined
contribution schemes.
Directors' Detailed Emoluments
Details of individual Directors' emoluments for the 2023 are as
follows:
Benefits
Salary in kind Performance Pension
& fees & allowances Bonus contributions Total
GBP GBP GBP GBP 2023
O Cooke 211,369 35,349 24,000 31,680 302,398
B Raven 322,000 44,469 60,000 48,300 474,769
J Rager** 31,075 2,194 1,828 2,970 38,067
P Dornan* 30,000 - - - 30,000
R Rennison* 30,000 - - - 30,000
624,444 82,012 85,828 82,950 875,234
=========== =================== ==================== ===================== =========
* Denotes non-executive Director.
** Joined Board on 26(th) January 2023
Details of individual Directors' emoluments for the 2022 are as
follows:
Benefits
Salary in kind Performance Pension
& fees & allowances Bonus contributions Total
GBP GBP GBP GBP 2022
O Cooke 220,000 37,186 50,000 33,000 340,186
B Raven 280,000 40,284 100,000 42,000 462,284
P Dornan* 30,000 - - - 30,000
R Rennison* 30,000 - - - 30,000
560,000 77,470 150,000 75,000 862,470
=========== ================== ==================== ===================== =========
Element Purpose and link to strategy Operation
------------ -----------------------------------
Basic To attract, retain and reward Basic salaries are reviewed
Salary Executive Directors of a suitable annually by the independent
calibre. Remuneration Committee. Factors
considered by the Committee
include, intra alia, individual
seniority/length of service,
market comparisons, economic
climate, wider staff reviews.
----------------------------------- ----------------------------------
BIK and A package of benefits (car Car allowances are paid to
allowances allowance, private health cover, individuals via the PAYE system.
death in service cover, defined Insurance cover is provided
pension contribution) is provided either through membership
as part of a market competitive of Group Schemes or by payment
remuneration package. of subscriptions on behalf
of the individuals.
----------------------------------- ----------------------------------
Element Purpose and link to strategy Operation
------------ -----------------------------------
Performance To maximise the benefit of the The maximum potential bonus
Bonus arrangements for the Company, is set by the Remuneration
half of the performance bonus Committee at the start of
is linked to the reported results each year. Individual performance,
of the Group and the other half and thus bonus entitlement,
is linked to the achievement is assessed and determined
of other strategic objectives. by the Committee after the
year end date.
----------------------------------- ------------------------------------
Pension Defined contributions are made The Company pays defined
to individual's nominated pension pension contributions directly
providers as part of a market to the nominated providers.
competitive remuneration package.
----------------------------------- ------------------------------------
TAXATION ON (LOSS)/PROFIT FROM ORDINARY ACTIVITIES
7.
2023 2022
GBP'000 GBP'000
Corporation tax charge for current year - 297
Corporation tax adjustment in respect of previous
year - 53
Deferred tax (credit)/charge (35) 200
Deferred tax credit in respect of previous
period (138) (187)
----------------- ---------------
Tax (credit)/charge for the year (173) 363
================= ===============
The tax assessed for the year differs from the standard rate of
corporation tax in the UK applied to profit before tax.
On 10 June 2021, The Finance Bill 2021 received Royal assent.
The Bill confirms the increase in the corporation tax rate from 1
April 2023. From this date, the rate will tapper from 19% for
businesses of less than GBP50,000 to 25% with profits of over
GBP250,000. This does not amount to a significant impact on the
deferred tax charge for the year. The closing deferred tax balance
at 31 March 2023 has been calculated at 25% (2022: 25%) being the
substantively enacted tax rate at the balance sheet date.
2023 2022
GBP'000 GBP'000
Total (Loss)/Profit on ordinary activities
before tax (1,568) 30,004
================= ===============
(Loss)/Profit on ordinary activities at the
standard rate of corporation tax in the UK
of 19% (2022: 19%) (298) 5,701
Effects of:
Expenses not deductible for tax purposes 52 278
Other timing differences (231) (32)
Differences between capital allowances and
depreciation 1 251
Adjustments to prior periods deferred tax (2,445) (988)
Adjustments to prior corporation tax - 53
Non-taxable income - (6,731)
Adjust closing deferred tax to average rate
of tax (137) (495)
Deferred tax not recognised 2,885 2,326
----------------- ---------------
Tax (credit)/charge for the year (173) 363
================= ===============
8. (LOSS)/EARNINGS PER SHARE
2023 2022
(Loss)/Earnings per share has been calculated
using the following:
(Loss)/Earnings (GBP'000) (1,395) 29,641
Weighted average number of shares ('000s) 556,601 591,916
----------- ------------
(Loss)/Earnings per ordinary share (0.25)p 5.01p
----------- ------------
Weighted average number of shares and share
options that were exercisable at year end
('000s) - 81,616
----------- ------------
Diluted Earnings per ordinary share (0.25)p 4.40p
----------- ------------
Basic earnings per ordinary share has been calculated using the
weighted average number of share in issue during the relevant
financial periods.
TANGIBLE FIXED ASSETS
9.
Office
fixtures,
*ROU fittings,
Leasehold Motor Computer and
property Vehicles equipment equipment Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at 1
April
2021 1,176 - 340 613 2,129
Additions 872 33 329 121 1,355
Disposals (338) - (37) (107) (482)
Transfers - - 47 12 59
Balance at 31
March 2022 1,710 33 679 639 3,061
----------- ---------- ----------- ------------- --------
Additions 819 - 80 50 949
Disposals (353) - (113) (231) (697)
Transfers** - - (441) 441 -
----------- ---------- ----------- ------------- --------
Balance at 31
March 2023 2,176 33 205 899 3,313
----------- ---------- ----------- ------------- --------
Accumulated depreciation
Balance at 1
April
2022 575 - 114 403 1,092
Depreciation 442 5 87 172 706
Disposals (338) - (37) (153) (528)
Transfers - - 47 12 59
Balance at 31
March 2022 679 5 211 434 1,329
----------- ---------- ----------- ------------- --------
Depreciation 482 7 76 157 722
Disposals (364) - (113) (231) (708)
Transfers** - - (45) 45 -
Balance at 31
March 2023 797 12 129 404 1,342
----------- ---------- ----------- ------------- --------
Net Book
Value
At 31 March
2023 1,379 21 76 495 1,971
=========== ========== =========== ============= ========
At 31 March
2022 1,031 28 468 205 1,732
=========== ========== =========== ============= ========
*Right of Use.
**Transfers have been made between categories to correct
immaterial brought forward discrepancies.
Included in Office fixtures, fittings and equipment are assets
acquired under lease agreements with a net book value of GBP20,350
(2022: GBP65,218).
Included in Computer equipment are assets acquired under lease
agreements with a net book value of GBPNil (2022: GBP6,555).
Included in ROU Leasehold property are assets acquired under
lease agreements with a net book value of GBP1,380,387 (2022:
GBP1,041,733).
Included in Motor Vehicles are assets acquired under lease
agreements with a net book value of GBP21,506 (2022:
GBP28,105).
Depreciation charged on leased assets was GBP472,986 (2022:
GBP486,998).
INTANGIBLE ASSETS
10.
Goodwill Internally
Client Arising Developed
Lists on Consolidation Assets Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at 1 April 2021 9,185 14,751 2,481 26,417
Additions 2,593 - 332 2,925
Disposals - (1,916) - (1,916)
Balance at 31 March 2022 11,778 12,835 2,813 27,426
------------------ ----------------------- -------------------- --------------
Additions 1,331 - 583 1,914
Disposals (100) - - (100)
Balance at 31 March 2023 13,009 12,835 3,396 29,240
------------------ ----------------------- -------------------- --------------
Accumulated amortisation
Balance at 1 April 2021 7,242 235 1,238 8,715
Amortisation 380 - 22 402
Balance at 31 March 2022 7,622 235 1,260 9,117
------------------ ----------------------- -------------------- --------------
Amortisation 522 - 41 563
Balance at 31 March 2023 8,144 235 1,301 9,680
------------------ ----------------------- -------------------- --------------
Net Book Value
At 31 March 2023 4,865 12,600 2,095 19,560
================== ======================= ==================== ==============
At 31 March 2022 4,156 12,600 1,553 18,309
================== ======================= ==================== ==============
Client Lists relate to identifiable relationships between
acquired companies, their adviser network and the associated client
bases.
Internally Developed Assets predominately represent costs
associated with various initiatives.
GOODWILL
The carrying value of goodwill in respect of each cash generating
unit is as follows:
31 March 31 March
2023 2022
GBP'000 GBP'000
Financial Advisory business 12,600 12,600
12,600 12,600
=============== ===============
In assessing the carrying value of Goodwill the Directors have
used 5-year forecasts and discounted the anticipated future
cashflows by entity over 5 years and then in perpetuity using a
discount rate of 15%. In all scenarios, the recoverable amount
exceeded the carrying value.
INVESTMENTS IN ASSOCIATES
11.
Investments in Associates
Investments
in associates
GBP'000
Cost
Balance at 31 March -
2022
Additions 10,035
Balance at 31 March
2023 10,035
===========
Net Book Value
-----------
At 31 March 2023 10,035
===========
At 31 March 2022 -
===========
In April 2022 the Company received regulatory approval from the
FCA and completed the acquisition of a 21% stake in LEBC Holdings
Limited ("LEBC"). Consideration of GBP10m has been agreed, with
GBP6m on initial purchase and an additional GBP4m due on the first
anniversary.
TRADE AND OTHER RECEIVABLES
12.
Current
31 March 31 March
2023 2022
GBP'000 GBP'000
Trade receivables 393 109
Other prepayments and accrued income 2,228 2,136
Other receivables 7,852 10,794
10,473 13,039
================= ===============
Included within other receivables is the sum of GBP49k (2022:
GBP1.03m) being the estimated amount recoverable from insurers in
connection with the Neil Bartlett provision detailed in Note 14.
Included in other prepayments and accrued income is accrued income
at year end of GBP1,360,977 (2022: GBP1,637,583).
Included within other receivables due within one year is the sum
of GBP4,056.333 (2022: GBP6,410,256) being the amount due within
one year as part of the consideration on the sale of Tavistock
Wealth Limited. The remaining consideration of GBP13.33m has been
discounted at a rate of 4% to reflect the time value of money.
Also, included within other receivables is the sum of GBP2.2m
(2022: 2.2m) being the estimated amount recoverable from insurers
and GBP0.7m being the estimated amount recoverable from advisers in
connection with the British Steel provision detailed in Note
14.
Non-current
31 March 31 March
2023 2022
GBP'000 GBP'000
Deferred consideration due 8,740 12,090
---------------- -------------
8,740 12,090
================ =============
Included within deferred consideration due in more than one year
is the sum of GBP8,739,583 (2022: GBP12,090,350) being the amount
due after one year as part of the consideration on the sale of
Tavistock Wealth Limited.
LIABILITIES
13.
31 March 31 March
2023 2022
GBP'000 GBP'000
Current liabilities
Trade payables 1,754 1,730
Accruals 1,371 1,520
Commissions payable 907 919
VAT and social security liabilities 352 252
Other payables 619 310
Payments due regarding purchase of client lists 1,254 1,508
Deferred consideration owed 4,000 -
Leases 469 483
10,726 6,722
================ ================
31 March 31 March
2023 2022
GBP'000 GBP'000
Non-current liabilities
Payments due regarding purchase of client lists 923 1,298
Leases 999 732
1,922 2,030
================ ================
PROVISIONS
14.
Total
GBP'000
Balance at 1 April 2022 7,955
Additions 388
Payments to settle claims (150)
Provisions utilised (2,189)
Balance at 31 March 2023 6,004
===============
There are three main provisions at the year-end date: the
Bartlett provision, the Restructuring Reserve provisions and the
British Steel provision.
Bartlett provision
In December 2018, Mr Neil Bartlett one of the Group's former
advisers was found guilty of fraud and was sentenced to eight years
imprisonment. As a consequence of his actions, the subsidiary
company within the Group with which he was previously associated
has been approached by a number of victims, the majority of whom
were previously unknown to the company, seeking to recover monies
stolen from them by Mr Bartlett.
All steps are being taken by the Group to refute these
approaches and to address them individually in an appropriate
manner. Having consulted with the Company's legal advisers, the
Directors consider it appropriate that a provision of GBP132k is
made at the year-end date (2022: GBP1.45m). This provision is
matched in part by the provision referred to in Note 12, entitled
Trade and Other Receivables. The unmatched element of the provision
has been made in response to the actions of the FOS, as referred to
in the Chairman's Statement.
Restructuring Provisions
The restructuring provisions are made up of three principal
components.
Firstly, a provision of GBP113,673 to cover additional costs
associated with the disposal of offices no longer being used by the
Company.
Secondly, a provision of GBP120,698 to cover anticipated costs
associated with management restructure costs.
The third and largest provision relates to new costs arising as
a consequence of past restructuring. A provision of GBP1.6 million
has been made to cover additional payments anticipated to arise
over a number of future years to meet potential claims arising from
advice given by appointed representative firms whilst they operated
under the Company's regulatory umbrella, prior to being exited from
the Group.
The first layer of claims protection is provided by the
Company's captive insurance cell. The captive cell provides up to a
maximum of GBP750k of protection in each financial year. Claims
protection above this level is purchased from the traditional
insurance market. The Company is responsible for meeting all costs
associated with the operation of the captive cell. Thus, if the
claims covered by the above provision were to arise over a number
of financial years, and in each year were to amount to GBP750k or
less, the Company would be responsible for providing the captive
cell with the funds required to meet such claims.
British Steel Provision
A precautionary provision of GBP3.8 million (gross) has been
made in compliance with the FCA guidelines that were issued in
anticipation of a mandatory, industry-wide, review of past British
Steel Pension Fund transfer cases.
This provision is matched in part by the provision referred to
in Note 12, entitled Trade and Other Receivables. The unmatched
element of GBP930k has been charged to the Statement of
Comprehensive Income as an exceptional cost in the prior year.
Further information regarding the provisions can be found in the
Chairmans Statement on page 4.
DEFERRED TAX
15.
Total
GBP'000
Balance at 1 April 2022 (262)
Adjustment in respect of previous period 138
Deferred tax credit in the year 35
Balance at 31 March 2023 (89)
================
The Directors anticipate that the Deferred tax asset relating to
losses brought forward will be realised within the medium term.
The deferred tax provision comprises:
31 March 31 March
2023 2022
GBP'000 GBP'000
Deferred tax on intangibles (89) (262)
(89) (262)
================ ===============
For taxation purposes, the parent company of the Group,
Tavistock Investments Plc, has to date incurred losses amounting to
GBP10.75m (31 March 2022 GBP9.28m), no deferred tax asset in
connection with these losses has been recognised in the
accounts.
FINANCIAL RISK MANAGEMENT
16.
The Group is exposed to risks that arise from its use of
financial instruments. These financial instruments are within the
current assets and current liabilities shown on the face of the
statement of financial position and comprise the following:
Credit risk
The Group is exposed to the usual credit risks associated with
use of a mainstream bank headquartered in the UK, NatWest Plc.
However, the Board does not consider it to be necessary to carry a
specific provision against this risk.
The Group is exposed to a credit risk associated with the
deferred consideration due on the disposal of Tavistock Wealth to
Titan. However, the Board does not consider it necessary to carry a
specific provision against this risk as Ares, one of the largest
debt providers to the UK financial services sector, is a Titan
shareholder and is its principle financial backer.
The Group is exposed to a low level of credit risk primarily on
its trade receivables, which are spread over a range of Investment
platforms and advisers. Receivables are broken down as follows:
31 March 31 March
2023 2022
Deferred consideration due, accrued income GBP'000 GBP'000
and receivables
Trade receivables 393 109
Accrued income 1,361 1,638
Other receivables 16,591 22,885
================== ===============
The table below illustrates the due date of trade
receivables:
31 March 31 March
2023 2022
GBP'000 GBP'000
Current 195 18
31-60 days 174 36
61-90 days 3 5
91-120 days - 2
121 and over 21 48
393 109
==================== =================
Liquidity risk
Liquidity risk rises from the Group's management of working
capital and the finance charges and repayments of its
liabilities.
The Group's policy is to ensure that it will have sufficient
cash to allow it to meet its liabilities when they become due.
The Group has no bank borrowing or overdraft facilities.
The Group's policy in respect of cash and cash equivalents is to
limit its exposure by reducing cash holding in the operating units
and investing amounts that are not immediately required in funds
that have low risk and are placed with a reputable bank.
Cash at bank and cash equivalents
At the year end the Group had the following 31 March 31 March
cash balances:
2023 2022
GBP'000 GBP'000
9,733 15,274
================ =============
Cash at bank comprises Sterling cash deposits held within a
number of banks. There is no cash held on deposit in special
interest bearing accounts.
All monetary assets and liabilities within the Group are
denominated in the functional currency of the operating unit in
which they are held. All amounts stated at carrying value equate to
fair value.
31 March Due within Due within
2023 1 year 1-5 years
GBP'000 GBP'000 GBP'000
Financial liabilities at amortised
cost
Trade payables 1,754 1,754 -
Accruals 1,371 1,371 -
Commissions payable 907 907 -
VAT and social security liabilities 352 352 -
Other payables 619 619 -
Payments due regarding purchase of
client lists 2,177 1,254 923
Leases 1,467 468 999
8,647 6,725 1,922
========= =========== =================
31 March Due within Due within
2022 1 year 1-5 years
GBP'000 GBP'000 GBP'000
Financial liabilities at amortised
cost
Trade payables 1,730 1,730 -
Accruals 1,520 1,520 -
Commissions payable 919 919 -
VAT and social security liabilities 252 252 -
Other payables 310 310 -
Payments due regarding purchase of
client lists 2,806 2,479 327
Leases 1,215 724 491
8,752 7,934 818
========= =========== =================
Capital Disclosures and Risk Management
The Group's management define capital as the Group's equity
share capital and reserves.
The Group has a requirement to maintain a minimal level of
regulatory capital, which in practice means the FCA requires the
Group's core tier one capital, which is composed primarily of
retained earnings and shares, to exceed the requirements as set out
by the FCA. Compliance with minimum regulatory capital is assessed
internally monthly and reported to the FCA on a half yearly basis.
Should additional capital be required management ensure that this
is introduced in a timely manner.
The Group's objective when maintaining capital is to safeguard
its ability to continue as a going concern, so that in due course
it can provide returns for shareholders and benefits for other
stakeholders.
The Group manages its capital structure and makes adjustments to
it in the light of changes in the business and in economic
conditions. In order to maintain or adjust the capital structure,
the Group may from time to time issue new shares, based on working
capital and product development requirements and current and future
expectations of the Company's share price.
The Group monitors both its operating and overall working
capital with reference to key ratios such as gearing and regulatory
capital requirements.
Interest rate risk
Interest rate risk is the risk that the value of financial
instruments will fluctuate due to changes in market interest rates.
The Group considers the interest rates available when deciding
where to place cash balances. The Group has no material exposure to
interest rate risk.
SHARE CAPITAL AND SHARE PREMIUM
17.
31 March 31 March
2023 2022
GBP'000 GBP'000
Called up share capital
Allotted, called up and fully paid
556,857,576 Ordinary shares of 1 pence each 5,567 5,578
(2022: 557,677,576 shares of 1 pence each)
Capital Redemption Reserve 534 501
================ =================
6,101 6,079
Share Premium 1,614 1,541
---------------- -----------------
7,715 7,620
================ =================
Capital Redemption Reserve
In August 2022, in accordance with a mandate given by
shareholders, the Board arranged the buy-back of 3,000,000 of the
Company's ordinary shares of 1p each, representing 0.54% of the
then issued share capital, at a price of 9.35 pence per share.
Later in the financial year, in November 2022, the Board arranged
the buy-back of a further 300,000 of the Company's ordinary shares
of 1p each, representing 0.05% of the then issued share capital, at
a price of 7 pence per share. These shares were subsequently
cancelled, and the nominal value of the shares has been transferred
to the Capital Redemption Reserve.
The following describes the nature and purpose of each of the
Company's reserves:
Reserve Description and purpose
Share Capital Amount subscribed for share capital at nominal
value.
Share Premium Amount subscribed for share capital in excess
of nominal value.
Retained Earnings Cumulative net gains and losses recognised
in the consolidated statement of comprehensive
income.
Capital Redemption A statutory, non-distributable reserve into
Reserve which amounts are transferred following the
purchase, and cancellation of the company's
own shares out of distributable profits.
18. SHARE BASED PAYMENTS
During the year the Company issued options 8,100,000 (2022:
76,950,000) Ordinary shares.
All options outstanding at the year-end date have been valued
using the Black-Scholes pricing model. The weighted average of the
assumptions used in the model are:
31 March 31 March
2023 2022
Share price at grant 6.72p 4.76p
Exercise price 7.67p 5.24p
Expected volatility 117% 59%
Expected life 3.8 years 3.6 years
Risk free rate 3.4% 0.7%
Expected volatility has been determined by reference to the
fluctuations in the Company's share price between the
formation of its current Group structure and the grant date of
the share options.
31 March 2023 31 March 2022
Weighted Weighted
average average price
price (pence) Number (pence) Number
Outstanding at the beginning
of the year 1.45 124,405,967 0.76 51,520,983
Granted during the year 6.22 8,100,000 1.87 76,950,000
Exercised during the year 2.50 (2,480,000) - -
Lapsed during the year 0.24 (8,901,400) 0.47 (4,065,016)
Outstanding at the end
of the year 1.85 121,124,567 1.45 124,405,967
============= ===================
The average exercise price of the 81,445,067 options that had
vested and were exercisable at year end was 5.25p and their
weighted contractual life was 4 years.
The weighted average fair value of each option granted during
the current period was assessed as being 6.22p and their weighted
average contractual life was 10 years.
The range in exercise prices of share options outstanding at the
end of the year is 2.35p to 7.75p (2022: 2.35p to 7.25p) and their
weighted average contractual life was 3.8 years (2022: 3.6
years)
The vesting conditions in relation to management are disclosed
in the Remuneration Report on pages 22.
19. LEASING COMMITMENTS
The Group's future minimum lease payments
fall due as follows:
31 March 31 March
2023 2022
GBP'000 GBP'000
Not later than 1 year 468 465
Later than 1 year and not later than 5 years 999 784
1,467 1,249
============== ==============
Included in the above is GBP452k of Right of Use leasing
commitments due within 1 year, and GBP982k due later than 1 year
and not later than 5 years.
The interest expense in relation to Right of Use leasing
commitments due within 1 year is GBP38k, and GBP34 due later than 1
year and not later than 5 years.
20. RELATED PARTY TRANSACTIONS
During the year ended 2022 the former subsidiary Tavistock
Wealth Limited received fees of GBP1,549,955 under the terms of an
agreement entered into with Investment Fund Services Limited
("IFSL"). IFSL is a company of which Andrew Staley, a significant
shareholder in Tavistock Investments Plc, is a Director.
21. POST BALANCE SHEET EVENTS
In April 2023, the Company acquired the business of Precise
Protect Limited, a profitable and fast-growing protection business
based in Bangor, Northern Ireland. This business is expected to
contribute significantly to the Company's growth in the next
financial year. The company has a network of over 200 advisers
working with more than 37,000 UK clients. In the year ended 31
October 2022, Precise Protect reported a profit before taxation of
GBP1.45 million on turnover of GBP6.5 million and net assets of
GBP1.23 million.
TAVISTOCK INVESTMENTS PLC Company number 05066489
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
At 31 March
At 31 March 2023 2022
ASSETS Note GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Investments V 27,249 16,008
Tangible fixed assets VI 1,586 1,355
Intangible assets VII 555 74
Trade and other receivables VIII 8,740 12,090
---------- ----------
Total non-current assets 38,130 29,527
Current assets
Trade and other receivables VIII 10,875 14,943
Cash and cash equivalents IX 3,038 7,884
-------------- ----------
Total current assets 13,913 22,827
---------- ----------
Total assets 52,043 52,354
LIABILITIES
Current liabilities X (17,458) (10,096)
Non-current liabilities
Creditors: amounts falling
due after more than one
year XI (885) (626)
-------------- ----------
Total liabilities (18,343) (10,722)
Total net assets 33,700 41,632
========== ==========
Capital and reserves
Share Capital XII 5,567 5,578
Share Premium 1,614 1,541
Capital Redemption Reserve 534 501
Retained Earnings 25,985 34,012
Total equity 33,700 41,632
========== ==========
These accounts do not include a Cashflow Statement, or a
Financial Instruments note, as permitted by Section 1.8 of FRS
101.
The loss of the parent company for the year was GBP7 ,442,147
(2022: profit GBP36,410,000).
The financial statements were approved by the Board and
authorised for issue on 19 September 2023.
Oliver Cooke
Chairman
The notes below form part of the Company financial
statements.
TAVISTOCK INVESTMENTS PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MARCH 2023
Share Share Capital Retained Total
Capital Premium Redemption Earnings Equity
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 March
2021 6,079 1,541 - (497) 7,123
Buy-back of
shares (501) - 501 (2,607) (2,607)
Equity settled
share
based payments - - - 1,010 1,010
Dividend
payment - - - (304) (304)
Profit after
tax - - - 36,410 36,410
At 31 March
2022 5,578 1,541 501 34,012 41,632
Buy-back of
shares (33) 73 33 (303) (230)
Equity settled
share
based payments - - - 107 107
Share options
exercised 22 - - - 22
Dividend
payment - - - (391) (391)
Dividend
received - - - 373 373
Loss after tax - - - (7,813) (7,813)
At 31 March
2023 5,567 1,614 534 25,985 33,700
The notes below form part of the Company Financial
Statements.
TAVISTOCK INVESTMENTS PLC
NOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS
FOR THE YEARED 31 MARCH 2023
I. ACCOUNTING POLICIES
The principal accounting policies applied are summarised
below.
Basis of preparation
The financial statements have been prepared under the historical
cost convention and in accordance with Financial Reporting Standard
101 Reduced Disclosure Framework, the Financial Reporting Standard
applicable in the United Kingdom and the Republic of Ireland and
the Companies Act 2006.
The preparation of financial statements in compliance with FRS
101 Reduced Disclosure Framework requires the use of certain
critical accounting estimates. It also requires management to
exercise judgement in applying the Company's accounting policies
(see Note 2 in the Group financial statements).
Advantage has been taken by the Company of the exemptions
provided by Section 5(c) of FRS101 not to disclose Group
transactions in respect of wholly owned subsidiaries.
All accounting policies that are not unique to the Company are
listed on pages 33 to 36. All additional accounting policies have
been applied as follows:
Going concern
The Directors are of the opinion that the Company has sufficient
working capital for the foreseeable future, being at least twelve
months from the date of approval of financial statements. On this
basis, they consider it appropriate that the accounts have been
prepared on a going concern basis.
Valuation of investments
Investments held as fixed assets are stated at cost less any
provision for impairment in value.
II. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Impairment of Investments
The Company is required to test, when impairment indicators
exist, whether the carrying value of its investment in its
subsidiaries has suffered any impairment.
In assessing the carrying value of Investments the Directors
have used 5-year forecasts and discounted the anticipated future
cashflows by entity over 5 years and then in perpetuity using a
discount rate of 15%. In all scenarios, the recoverable amount
exceeded the carrying value.
Share based payments
The share based payment charge to the Profit or Loss account has
been estimated using the Black-Scholes Model in respect of share
options granted by the Company, as referred to in more detail in
Note 18.
III. LOSS FOR THE FINANCIAL PERIOD
The Company has taken advantage of the exemption allowed under
s408 of the Companies Act 2006 and has not presented its own profit
and loss account in these financial statements. The Company's loss
for the year was GBP7,442,147 (2022: profit GBP36,410,000).
Included within this loss are provisions totalling of GBPNil
(2022: GBP3,050,000) to cover the anticipated one-off costs
relating to planned Group restructuring, and new costs incurred as
a consequence of past restructuring, as described in the Strategic
report on pages 7 to 9.
In July 2022, the Company disbursed an interim dividend of 0.07p
per share, representing a notable 40% increase compared to the
dividend issued in October 2021. The Company is issuing a
subsequent interim dividend of the same value, 0.07p.
All Group staff are employed by Tavistock Investments Plc and
their costs are recharged to the relevant subsidiaries. Details of
the Company's staff costs are shown in Note IV.
STAFF COSTS
IV.
2023 2022
GBP'000 GBP'000
Staff costs for all employees, including Directors
consist of: 2,348 1,732
Wages, fees and salaries 289 176
Social security costs 163 66
Pensions 2,800 1,974
==============
The average number of employees of the Company
during the year was as follows: 2023 2022
Number Number
Directors and key management 7 4
Operations and administration 31 16
38 20
==============
During the year the Company incurred an additional GBP8.6
million (2022: GBP8.31 million) of staff costs relating to 161
employees (2022: 144 employees) which were recharged to subsidiary
companies within the Group .
V. INVESTMENTS
31 March 31 March
2023 2022
GBP'000 GBP'000
Subsidiary and associate undertakings
Cost
Balance at 1 April 2022 20,667 23,292
Additions 14,485 350
Release on disposal (3,025) (2,975)
Balance at 31 March 2023 31,127 20,667
Provisions for impairment
Balance at 1 April 2022 4,659 5,309
Impairment charge - (650)
Minority interest in associate 219 -
Balance at 31 March 2023 4,878 4,659
Carrying value of investments 27,249 16,008
At the year end the Company had the following wholly owned
subsidiaries:
Registered Office Address Name Holding
Tavistock Private Client Indirect
Limited
1 Queens Square, Lyndhurst Tavistock Partners Limited Direct
Road, Ascot, Berkshire, SL5
9FE
Tavistock Partners (UK) Direct
Ltd
The Tavistock Partnership Direct
Limited
Tavistock Estate Planning Direct
Services Limited
Tavistock Chater Allan LLP Indirect
King Financial Planning Direct
LLP*
Tavistock Asset Management Direct
Limited
Tavistock Holdings Limited Direct
Tavistock Services Limited Direct
Asset Lab Limited ** Direct
Tavistock Select LLP** Indirect
Duchy Independent Financial Direct
Advisers Limited**
Cornerstone Asset Holdings Direct
Limited**
* The Company owns 100% of King Financial Planning LLP and the
other member is entitled to 50% of the profit share.
** Dormant subsidiary during the year that is exempt from
preparing individual accounts by virtue of s394A of Companies Act
2006
TANGIBLE FIXED ASSETS
VI.
*ROU Leasehold Office
property fixtures,
Computer fittings
Equipment and equipment Total
GBP'000 GBP'000 GBP'000 GBP'000
Cost
Balance at 1 April 2022 1,391 404 534 2,329
Additions 757 16 25 798
Disposals (280) (99) (116) (495)
Balance at 31 March 2023 1,868 321 443 2,632
Accumulated depreciation
Balance at 1 April 2022 531 116 327 974
Depreciation charge 399 28 140 567
Disposals (280) (99) (116) (495)
Balance at 31 March 2023 650 45 351 1,046
Net book value
At 31 March 2023 1,218 276 92 1,586
At 31 March 2022 860 288 207 1,355
*Right of use
Included in ROU Leasehold property are assets acquired under
lease agreements with a net book value of GBP1,129,689 (2022:
GBP861,000).
Included in Computer equipment are assets acquired under lease
agreements with a net book value of Nil (2022: GBP7,000).
Included in Office fixtures, fittings and equipment are assets
acquired under lease agreements with a net book value of GBP20,350
(2022: GBP65,000).
VII. INTANGIBLE ASSETS
Total
GBP'000
Software cost
Balance at 1 April 2022 75
Additions 497
Balance at 31 March 2023 572
Accumulated amortisation
Balance at 1 April 2022 1
Amortisation charge 16
Balance at 31 March 2023 17
Net book value
At 31 March 2023 555
At 31 March 2022 74
VIII. TRADE AND OTHER RECEIVABLES
Current 31 March 31 March
2023 2022
GBP'000 GBP'000
Trade debtors 32 23
Prepayments and accrued income 237 323
Deferred consideration due 7,159 9,586
Amounts owed by subsidiary undertakings 3,447 5,011
10,875 14,943
Non-current
31 March 31 March
2023 2022
GBP'000 GBP'000
Deferred consideration due 8,740 12,090
8,740 12,090
IX. CASH AND CASH EQUIVALENTS
31 March 31 March
2023 2022
GBP'000 GBP'000
Cash at bank and in hand 3,038 7,884
3,038 7,884
X. CREDITORS: amounts falling due
within one year
31 March 31 March
2023 2022
GBP'000 GBP'000
Trade creditors 306 434
Accruals 460 768
Other tax and social security 353 252
Leases 386 381
Provision 5,638 6,664
Deferred consideration owed 4,000 -
Amounts owed to subsidiary undertakings 6,315 1,597
17,458 10,096
XI. CREDITORS: amounts falling due
after one year
31 March 31 March
2023 2022
GBP'000 GBP'000
Leases 885 626
884 626
XII. SHARE CAPITAL
Details of the Company's share capital and the movements in the
year can be found in Note 17 to the Consolidated Financial
Statements.
XIII. SHARE OPTIONS
EMI Share Option Scheme
Details of the share options outstanding at 31 March 2023 can be
found in Note 18 in the Consolidated Financial Statements.
TAVISTOCK INVESTMENTS PLC
ADVISERS
Registrars Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7XX
Nominated Adviser Allenby Capital
& Broker 5 St Helen's Place
London
EC3A 6AB
Independent Auditors RPG Crouch Chapman LLP
5(th) Floor, 14-16 Dowgate Hill
London
EC4R 2SU
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September 20, 2023 02:00 ET (06:00 GMT)
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