REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Company Number: 05066489
2020RECOVERY CONTENT
Chairman’s statement
Strategic report
Corporate governance report
Directors’ report
Audit committee report
Remuneration report
Independent auditor’s report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes forming part of the consolidated financial statements
Company balance sheet
Company statement of changes in equity
Notes forming part of Company financial statements
Advisers
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TAVISTOCK INVESTMENTS PLCREPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020
The Group is reporting an increased level of adjusted EBITDA (being earnings before interest, taxation, depreciation
and amortisation as adjusted for share based payments, exceptional items and for the one-off intangible asset
impairment provision detailed below), as it has done each year since its formation. Adjusted EBITDA for the year
under review of £1.83 million is 24% higher than the prior year’s £1.48 million.
This is particularly satisfying, given the various factors that adversely impacted financial markets and the wider
economic landscape during the year.
Investment Management
Tavistock Wealth increased gross revenues by 13% to £5.5 million (£4.9 million in the prior year) and the level of
discretionary funds under management (“FUM”) rose by 6% to over £1 billion (£945 million for the prior year).
The FUM number was, of course, severely impacted immediately prior to the year-end, by the pace and severity
of the decline in financial markets; the worst since 1929.
The strong performance of Tavistock’s ACUMEN Protection Portfolios has contributed significantly to the success of
this business. Designed specifically to shield clients from sharp and sustained falls in financial markets, they feature
an automated algorithmic safeguard. If markets fall, as volatility increases, the algorithm triggers movement out of
investment assets and into cash; when markets recover, as volatility decreases, the reverse is triggered, with cash
being gradually reinvested into higher risk assets. These funds perform well when used as a bond substitute within
clients’ investment portfolios.
The newest fund, the ACUMEN ESG Protection Portfolio, has performed particularly effectively since its launch on 5
December 2019, with its NAV (net asset value) having declined by less than 1%. Morgan Stanley & Co International Plc
provides the ESG Protection Portfolio with its protection level, set at 90% of its NAV’s highest ever value. This protection
enables investors to both limit their downside exposure, and lock in 90% of performance upside.
Industry recognition is increasing and Tavistock Wealth has again been shortlisted as a finalist for various awards later
in 2020; “Company of the Year” and “Best Discretionary Fund Manager” in the Money Marketing Awards 2020, and
“Best DFM” and “Innovation Award” in the Moneyfacts Investment Life & Pensions Awards 2020.
2
TAVISTOCK INVESTMENTS PLCCHAIRMAN’S STATEMENTFOR THE YEAR ENDED 31 MARCH 2020 Advisory
The Group’s advisory business also performed well, generating gross revenues of £23.3 million, 4% ahead of
the prior year (£22.5 million). Thus, fully recovering the income previously generated by the poorer performing
appointed representative firms that had been removed from the Group.
A number of initiatives have recently been taken to further develop this business and to enhance its contribution
to the Group’s profitability.
Financial review
Coronavirus Impact, Mitigation and Going Concern and Business Viability Review
Management responded swiftly to the onset of the pandemic, the Government imposed lock-down measures
and the markets’ reactions to these events. A variety of measures were introduced to mitigate the potential harm
to the business, including the rapid adoption of new technology-based work practices and the implementation of
business continuity plans, enabling the entire Group to move to home-based working while cost reductions were
made. Voluntary salary waivers by all senior management and the significant majority of other staff, together
with use of the Government’s furlough scheme, have enabled the Company to continue to trade profitably at the
adjusted EBITDA level and also to record profits at the pre-tax level during lock-down.
Given the exceptional circumstances, the Board undertook a detailed review of the Group’s business to confirm
the continued propriety of the going concern assumption as the basis on which to prepare the accounts for the
year ended 31 March 2020. As a part of this review process, new budgets were prepared on a worst-case scenario
basis, a capital repayment holiday was secured on the Company’s NatWest term loan facility and costs were
removed from the business where possible.
I am pleased to report that the Board remains confident that the business will now continue to trade profitably
at the pre-tax level and as a consequence, the going concern assumption continues to be the appropriate basis
on which to prepare the Group’s accounts.
Intangible Asset Impairment Review
The Board is conscious that the Group’s pre-tax profit performance is adversely impacted each year by amortisation
charges relating to the intangible assets, other than Goodwill, held on its balance sheet (predominantly relating
to past business acquisitions). These assets are currently being written off over a 5 – 10 year period, in line with the
Group’s accounting policies on amortisation.
The Board is also mindful of the current uncertainty regarding the long-term consequences of the coronavirus
pandemic, as well as the forthcoming recession, and the ultimate impact these may have on the Group’s business.
Therefore, in addition to reviewing and confirming the carrying value of Goodwill at the year-end date, the Board
has conducted a specific review of the carrying value of the Group’s other intangible assets. It has concluded
that the acquired value of these assets (being that generated by the former owners of the business units), has
been superseded by the input of the Group’s current management team. The Board has therefore decided that
it would be both prudent and appropriate for the amortisation of these assets to be accelerated so as to write the
carrying value down to nil at the year-end date.
3
TAVISTOCK INVESTMENTS PLCCHAIRMAN’S STATEMENT (continued)FOR THE YEAR ENDED 31 MARCH 2020 Consequently, a one-off impairment provision of some £5 million against the carrying value of these assets has
been put through this year’s profit or loss account. Having made this provision, the future amortisation charges
relating to these assets will be reduced by approximately £1 million per annum, which in turn will enable the
Group’s annual pre-tax profit to better reflect its current operational performance.
Financial Performance
Revenue in the Investment Management business is directly linked to the value of FUM and in the Advisory
business is directly linked to the value of AUA (assets under advice). The market value of these assets was subjected
to considerable downward pressure, at various times during the year. Initially, this was as a consequence of the
parliamentary paralysis associated with Brexit and the subsequent general election, and latterly as a direct
consequence of the coronavirus pandemic. Despite these challenges, the Group continued to grow the level
of EBITDA and for the year ended 31 March 2020, has reported EBITDA of £1.83 million, a 24% increase over the
previous financial year (£1.48 million). Having made the intangible asset impairment provision referred to above,
the reported Operating loss was £5.5 million (Operating profit for the year ended 31 March 2019 was £156,000).
Gross revenues at £28.8 million were 5% ahead of the prior year (£27.3 million) and gross profit at £11.8 million
was 6% ahead of the prior year (£11.1 million). At the year end, as a further consequence of the intangible asset
impairment provision, the Group’s net assets had reduced from £20 million at 31 March 2019 to £15.4 million.
The Group generated £2.4 million from operations (31 March 2019: £1.2 million) and raised £650,000 of new equity
capital. After making £3.4 million of payments (31 March 2019: £2 million) during the year on loan repayments,
finance costs, deferred consideration obligations, the purchase of client books and the development of key
initiatives, the Group had cash resources at year end of £2.4 million (31 March 2019: £3.1 million).
Adjusted EBITDA is highlighted in the table below. This is considered to be the most appropriate measure of the
Group’s performance as it removes the distorting effect of one-off gains and losses that arise on acquisitions, as
well as the impact of non-cash items.
4
TAVISTOCK INVESTMENTS PLCCHAIRMAN’S STATEMENT (continued) FOR THE YEAR ENDED 31 MARCH 2020 The financial performance of the Group during the past two years can be summarised as follows:
Year ended 31 Mar 2020
£’000
Year ended 31 Mar 2019
£’000
Movement
Gross revenues
Adjusted EBITDA
Depreciation & amortisation
Additional depreciation resulting
from the introduction of IFRS 16
Share based payments
Profit from Operations- before
exceptional items
Impairment of intangible assets
Acquisition related costs &
exceptional items
Reported (loss)/profit from
Operations
Loss per share
Net assets at year end
Cash resources at year end
28,803
1,825
(1,295)
(275)
(229)
26
(5,039)
(460)
(5,473)
(0.95)p
15,404
2,416
27,342
1,475
(1,053)
-
(248)
174
-
(18)
156
0.02p
19,996
3,116
5% increase
24% increase
23% increase
8% decrease
85% decrease
*below
23% decrease
22% decrease
*See detail above - as a consequence of making this provision, it is anticipated that pre-tax profit will increase by
some £1 million per annum in future years.
In March 2020, the Company successfully raised an additional £650,000 of equity capital through the issue of
32,500,000 new ordinary shares of 1p each (the “Placing Shares”) at an issue price of 2p per share (the “Placing”).
30,000,000 Placing Shares, equivalent to 4.94% of the Company’s issued share capital as enlarged by the Placing,
were issued to an experienced industry figure, Hugh Simon, and the Board is pleased to welcome him as a
significant new investor in the Company.
The balance of the Placing Shares were issued to members of the management team, including Brian Raven
and myself.
Hugh Simon is the Chief Executive, and ultimate owner, of the Hamon Investment Group (“Hamon Group”), an
asset management Group based in Hong Kong and London. Since being founded by Hugh in 1989, Hamon
Group has grown into a multi-asset boutique manager.
In the UK, Hamon Group owns GEM (global emerging market) equity fund manager, Blackfriars Asset
Management, which it acquired from BNY Mellon in 2011. Hamon Group is licenced in Hong Kong, Korea, Ireland,
and the UK. Blackfriars Asset Management is regulated by the Financial Conduct Authority.
Hugh’s interest is to develop a meaningful stake in the UK Wealth Management sector, and he has identified the
Company as a cornerstone investment.
The Company and Hamon Group are interested in identifying acquisition opportunities in the wealth and asset
management sectors in the UK and Europe. The Board believes that a strategic partnership with Hamon Group
provides an opportunity to significantly increase the assets invested in the Company’s funds, particularly the 90%
Protection Portfolios managed with Morgan Stanley & Co International Plc.
5
TAVISTOCK INVESTMENTS PLCCHAIRMAN’S STATEMENT (continued)FOR THE YEAR ENDED 31 MARCH 2020 Post Balance Sheet Events
The Group’s available cash resources have been strengthened, after the reporting date, by securing a one year
capital repayment holiday on its existing term loan facility with NatWest, and by entering into a new, additional,
£2.13 million CBILS (coronavirus business interruption loan scheme) facility. This facility has a six-year term, with a
capital repayment holiday and interest paid by the Government in year one, and can, at the Company’s discretion,
be repaid early at any time without financial penalty.
Trading during the first quarter of the current financial year has been ahead of the Board’s expectations. The
swift action taken to mitigate the impact of the COVID-19 lockdown has ensured that the Company continues to
trade profitably at the adjusted EBITDA level and also to record profits at the pre-tax level. The Company’s Chief
Investment Officer, Christopher Peel, has stepped down and been replaced by his deputy, John Leiper, who has
managed the investment team since joining the business over three years ago.
Future Prospects
The Group’s performance during the year is considered particularly satisfying in light of the volatile economic
landscape in which it was operating, as it continued the progress it has achieved since inception.
It is, currently, extremely challenging to assess future performance expectations. The long-term consequences
of the coronavirus pandemic, the forthcoming recession and the ultimate impact that these might have on the
Group’s business, are all unknown. However, the Board remains confident that the business will emerge from the
current crisis in good shape and will continue to grow and trade profitably.
For reasons of expediency, the Directors chose not to pay a dividend in relation to the current year but intend
to take the steps necessary to enable the Company to resume the payment of dividends in the near term (2019:
dividend of £57,528).
I would like to take the opportunity to acknowledge the significant contribution made during the year by our
excellent staff and to thank them once again for their hard work and dedication, as well as the tremendous
support that they have given to the Group during the COVID-19 crisis.
I look forward to updating you further.
Oliver Cooke - Chairman
22 July 2020
6
TAVISTOCK INVESTMENTS PLCCHAIRMAN’S STATEMENT (continued) FOR THE YEAR ENDED 31 MARCH 2020
Business Review
In reviewing the performance of the business, the principle KPIs (Key Performance Indicators) monitored by
management are gross revenues, the level of FUM, and adjusted EBITDA.
The Group’s prime objective is to increase the level of FUM, as the investment management business has been
established to have a predominately fixed overhead base, which enables additional revenues to contribute
directly to the Group’s profitability as measured by adjusted EBITDA.
Management is also focused on controlling and improving the balance between regulatory risk and commercial
return. This is achieved through the judicious increase of operating margins and by eliminating those areas of the
business that are deemed incapable of generating an acceptable level of return.
In light of the above, and the explanations given in the attached Corporate Governance Report (page 10), the
Board considers the Group to be in full compliance with the requirements of s172.
Group
During the year, the Group has reported a 24% increase in the level of adjusted EBITDA to £1.83 million (2019
£1.48 million).
Gross revenues rose by 5% from £27.3 million in 2019 to £28.8 million, this despite the removal of a number of
poorer performing appointed representative (“AR”) firms from the Group.
The Board consider this to be a creditable performance when viewed against an economic backdrop, that
encompassed BREXIT, a general election and most recently, a global pandemic.
In March 2020, the Company successfully raised an additional £650,000 of equity capital through the issue of
32,500,000 new ordinary shares of 1p each at an issue price of 2p per share.
30,000,000 of these shares, equivalent to 4.94% of the Company’s enlarged share capital, were issued to an
experienced industry figure, Hugh Simon, who is the Chief Executive, and ultimate owner, of the Hamon Group
an asset management Group based in Hong Kong and London. The Company and Hamon Group are interested
in identifying acquisition opportunities in the asset management sector in the UK and Europe. The Board believes
that a strategic partnership with Hamon Group provides an opportunity to significantly increase the flow of funds
into the Group’s investment management business.
Investment Management
During the year, the business increased gross revenues by 13%, to £5.5 million (2019 £4.9 million).
These revenues are directly linked to the value of FUM which were severely impacted by the pace and severity of
the decline in financial markets immediately prior to the year-end. Notwithstanding, the business increased the
level of FUM by 6% to over £1 billion (2019 £945 million).
Of particular note, was the strong performance of the Company’s Protection Portfolios, which had been designed
specifically to protect clients from sharp and sustained falls in financial markets. The newest fund, the ACUMEN
ESG Protection Portfolio, had performed particularly effectively since its launch on 5 December 2019, with its NAV
having declined by less than 1%.
Advisory Business
The business successfully made up the income previously generated by the “AR” firms that had been removed
from the Group and increased gross revenues by 4% to £23.4 million (2019 £22.5 million).
A number of initiatives have recently been taken to further develop this business and to enhance its contribution
to the Group’s profitability.
7
TAVISTOCK INVESTMENTS PLCSTRATEGIC REPORTFOR THE YEAR ENDED 31 MARCH 2020 The Chairman’s Statement contains further details on the impact of the coronavirus pandemic, the measures
taken to mitigate the potential harm to the business, and on the progress and f inancial performance of
the Group.
In the current financial year, the Board’s focus will be on the following areas:
•
•
•
•
•
•
further initiatives to mitigate the impact of the pandemic,
continuing the growth in FUM,
improving access to the Group’s products and services,
the development of further relationships with strategic channel partners,
promoting the use of the Group’s protected funds, and
launching a low cost, functionally rich, Tavistock Platform service.
Impairment of Intangible Assets
As outlined in the Chairman’s Statement, the Board has conducted a specific review of the carrying value of
the Group’s intangible assets, other than Goodwill, at the year-end date and the corresponding impact that the
amortisation charge has on financial performance. The Board has concluded that it would be both prudent and
appropriate for the amortisation of these assets to be accelerated so as to write the carrying value down to nil at
the year-end date.
As a consequence, a one-off impairment provision of some £5 million against the carrying value of these assets
has been put through this year’s profit or loss account. Having made this provision, the amortisation charges
relating to these assets in future years will be reduced by approximately £1 million per annum, which in turn will
enable the Group’s annual pre-tax profit to better reflect its current operational performance.
Financial Review
Adjusted EBITDA rose by 24% to £1.83 million on gross revenue of £28.8 million, equivalent to 6.4% (year ended 31
March 2019: adjusted EBITDA of £1.48 million on gross revenue of £27.3 million, equivalent to 5.4%). Having made
the impairment provision referred to above, the reported Operating loss was £5.5 million (2019 Operating profit
£156,000) and at the year-end the Group’s net assets were £15.4 million (31 March 2019: £20 million).
The Group generated £2.4 million from operations (2019: £1.2 million) and raised £650,000 of new equity capital.
After making £3.4 million of payments during the year on loan repayments, finance costs, deferred consideration
obligations, the purchase of client books and the development of key initiatives, the Group had cash resources at
the year-end of £2.4 million (31 March 2019: £3.1 million).
Risks and Uncertainties
The most immediate risks facing the business are the unknown long-term consequences of the coronavirus
pandemic and the widely anticipated recession.
Having conducted a detailed review of the Group’s business to confirm the continued propriety of the going
concern assumption as the basis on which to prepare the accounts for the year ended 31 March 2020, the Board
remains confident that the business will continue to trade profitably. As a consequence, the going concern as-
sumption continues to be the appropriate basis on which to prepare the Group’s accounts.
Operationally, the principal commercial risk facing the business relates to the continued growth in the level of
FUM. The Group is actively promoting the use of its protected funds, which have performed well in the current
economic environment and is continuing to build relationships with strategic channel partners to assist with the
distribution of its fund range.
8
TAVISTOCK INVESTMENTS PLCSTRATEGIC REPORT (continued)FOR THE YEAR ENDED 31 MARCH 2020 TAVISTOCK INVESTMENTS PLC
STRATEGIC REPORT (continued)
FOR THE YEAR ENDED 31 MARCH 2020
Mindful of the need to protect client data and to prevent unauthorised access being made to its systems, the
Group has subjected its systems to external review, conducted independent third-party penetration tests and
installed additional email filtering software.
The Group continues to face the usual risks of operating within a regulated environment, but to mitigate these
risks the Board continues to actively promote an ethos of acting at all times with honour, dependability and
vigilance, and a culture in which the client is placed at the centre of everything that the Group does.
After the reporting date, the Company secured a one-year capital repayment holiday on its existing term loan
facility, and has entered into a new £2.13 million, Government backed, Coronavirus Business Interruption Loan
Scheme Facility with its bankers, NatWest. In light of the Group’s available cash resources, the Board is confident
that the Group has sufficient working capital for its current needs.
Future Prospects
The Company responded swiftly to the onset of the coronavirus pandemic and to the need to move the entire
Group to home-based working. It successfully implemented significant cost saving measures and is introducing
a number of other initiatives to mitigate the potential impact on the business. These factors, when taken together
with the strong performance and suitability of the Group’s protected funds in the current economic environment,
give the Board confidence that the Company will emerge from the crisis in good shape.
For reasons of expediency, the Directors chose not to pay a dividend in relation to the current year but intend to
take the steps necessary to enable the Company to resume the payment of dividends in the near term.
I look forward to updating you on our progress.
Approved by the Board of Directors and signed on its behalf by
Oliver Cooke - Chairman
22 July 2020
9
The Directors, in acknowledgement of the importance of good corporate governance, have adopted the Quoted
Companies Alliance Corporate Governance Code (the “QCA Code”), as 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 Board recognises that good corporate governance can reduce risks within the business, can promote
confidence and trust amongst its stakeholders and underpins the effectiveness of the Company’s
management framework.
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:
COMPANY’S APPLICATION OF THE QCA CODE
Principle 1:
Establish a strategy and business model which promote long-term value for shareholders
• The management of retail investors’ funds on a discretionary basis, delivering an institutional quality
service at a fair value price, lies at the heart of the Group’s operations. The basis upon which the Group’s
investment management business has developed its funds, and the manner in which those funds are
managed, have been designed to ensure, as far as it is practical to do so, that this business operates with
a substantially fixed cost base. Once this cost base has been exceeded and the investment management
business becomes profitable, which it has already achieved, the incremental revenues earned from
additional inflows of FUM flow directly through to its bottom line and enhance the profitability both of
the investment management business and of the Group. The business has achieved a very high level of
asset retention.
• The Group’s funds are designed to be both relevant and attractive to its customer base. For example,
within the Group’s current fund range are three Protection Portfolios designed specifically to shield clients
from sharp and sustained falls in financial markets, such as those that have occurred recently and are
anticipated to recur with the onset of a recession or in the event of further waves of the coronavirus. Morgan
Stanley & Co International Plc provides these funds with their protection levels, set at between 85-90% of
their net asset value’s highest level.
• The Group’s advisory business trades profitably in its own right and in addition, represents a channel for the
distribution of the Group’s funds, subject to their being suitable for each client’s individual circumstances.
• The Board’s focus is on managing the regulatory risks associated with the operation of advisory and
investment businesses and on developing other distribution channels capable of generating fund inflows,
thereby enhancing the Group’s profitability.
• Key risks have been addressed in the Strategic Report.
Principle 2:
Seek to understand and meet shareholder needs and expectations
• To ensure that its strategy, operational results and financial performance are clearly understood,
the Company is committed to engaging with and updating its shareholders through its regulatory
announcements, and practices two-way communication with both its institutional and private investors.
From time to time it also attends investor events at which shareholders and potential shareholders are
able to engage with the Company’s Executive Directors.
• 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
10
TAVISTOCK INVESTMENTS PLCCORPORATE GOVERNANCE REPORTFOR THE YEAR ENDED 31 MARCH 2020 Meeting. All Board members endeavour to attend the AGM in person.
• The Executive Directors meet regularly 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 Company recognises the importance of engagement with its stakeholder groups, which, in addition
to investors, include its employees, clients, strategic partners and the relevant authorities. It also seeks to
treat each of these groups in a fair and open manner.
• The Company supports a national charity, the Clock Tower Foundation, and the involvement of staff in
various local and national fund-raising events.
• The Company endeavours to take account of feedback received from these stakeholders, and where
appropriate to revise and improve its working arrangements.
• 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 its carbon
footprint through the greater use of online meeting technology and through a reduction in the number of
office premises retained for use by its staff.
Principle 4:
Embed effective risk management, considering both opportunities and threats, throughout the organisation
• The principal risks and uncertainties facing the Group are summarised in the Strategic Report.
• The Company has in place a robust and effective Compliance department and regime, as it is required
to do by regulation. Regular reports are prepared by this department and are submitted for review by the
Board.
• The Group has also established a separate Risk Committee, which examines and assesses the risks
associated with all aspects of the Group’s operations. This committee has recently been strengthened
through the recruitment of an experienced professional risk manager. Regular reports are prepared by this
committee and are submitted to the Board. These reports are also reviewed by the Audit Committee.
• The Group’s IT systems have been subjected to third party review, to independent penetration testing
and have been enhanced through the installation of additional email filtering software.
• Commercial risks and opportunities are considered by the Board and by the Group’s management
board, which is comprised of the Executive Directors and the heads of all major Group functions. The
management board liaises regularly and meets formally on a quarterly 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 is
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 being approved
and signed by the Chairman.
11
TAVISTOCK INVESTMENTS PLCCORPORATE GOVERNANCE REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2020 • Both the Chairman, Oliver Cooke, and the Chief Executive, Brian Raven, 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 Non-Executive Directors, Roderic Rennison and Peter Dornan, both have extensive sector
knowledge and experience and come from strong regulatory backgrounds.
• The 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
• Biographies for each of the Directors can be found in the Directors’ Report.
• 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 Chief Executive
Officer, in conjunction with other members of the executive team, ensures that the Directors’ 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 advisors, brokers,
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.
Principle 7:
Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
• The Group has established separate Remuneration and Audit Committees and through their operation
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. It remains the intention of the Board in due course to create a more formal
process that will 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 in every three years.
Principle 8:
Promote a corporate culture that is based on ethical values and behaviours
• The Company actively promotes a culture in which the client is placed at the centre of everything that the
Company does. Its ethos is, to act at all times with honour, dependability and vigilance.
12
TAVISTOCK INVESTMENTS PLCCORPORATE GOVERNANCE REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2020 • The Company is also committed to providing a safe and secure environment for its employees, with its
policies and procedures enshrined in the Company’s Employee Handbook, which 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 within the Company
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, through the open
conduct of Board meetings with the accurate minuting of outcomes and the wider communication of
those outcomes as appropriate.
• The avoidance of conflicts of interest, through the delegation of responsibility for certain areas, such
as audit and remuneration, to specialist committees, has strengthened the governance structure within
the Company.
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 online and meet formally on a quarterly basis to be briefed on the
Company’s progress to discuss progress within their areas of responsibility.
• Other members of staff are briefed informally on an ad-hoc basis and more formally through a series of
presentations delivered to them at the annual Company Day.
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 two
Executive Directors and two Non-Executive Directors.
The Executive Directors are;
Oliver Cooke Chairman
Brian Raven Chief Executive Officer
The Non-Executive Directors are;
Roderic Rennison
Peter Dornan
13
TAVISTOCK INVESTMENTS PLCCORPORATE GOVERNANCE REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2020 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 judgment 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 16 times with a total 2 apologies. 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 on. It receives reports from the Group’s
management 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 of 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 his own remuneration.
For the year under review, two Remuneration Committee meetings were held, and all 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.
14
TAVISTOCK INVESTMENTS PLCCORPORATE GOVERNANCE REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2020 Principal Activities, Review of the Business and Future Developments
The principal activities of the Group during the year were the provision of investment management services and
the provision of support services to a network of financial advisers. The key performance indicators recognised
by management are gross revenues, operating profit, as represented by adjusted EBITDA, and the level of funds
under management by the Group.
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
22 July 2020:
Name
Brian Raven
Andrew Staley
Lighthouse Group Plc
Christopher Peel
Hugh Simon
Oliver Cooke
Kevin Mee
Paul Millott
Helium Rising Stars
Directors
Number of Shares
% of Ordinary Shares
66,172,362
55,953,204
30,487,805
30,035,277
30,000,000
27,709,256
27,475,963
26,902,417
26,873,378
10.89%
9.21%
5.02%
4.94%
4.94%
4.56%
4.52%
4.43%
4.42%
Details of the Directors of the Company who served during the period are as follows:
Oliver Cooke
Chairman, aged 65
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 64
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 £100 million. As a principal, Brian has been responsible for identifying, negotiating
and integrating numerous acquisitions, as well as for delivering organic growth.
Roderic Rennison
Non-Executive Director, Chairman of Remuneration Committee, aged 64
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
15
TAVISTOCK INVESTMENTS PLCDIRECTORS’ REPORT FOR THE YEAR ENDED 31 MARCH 2020 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 64
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 (Strategic Report
and Directors’ Reports) Regulations 2013. As a consequence, it has not published a GHG Emissions Statement.
Communication with shareholders
The Chairman and the Chief Executive are available to meet with institutional shareholders and to answer
questions from private shareholders. The Board is open to receiving constructive input from 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
In light of the coronavirus pandemic the Board undertook a detailed review of the Group’s business to confirm
the continued propriety of the going concern assumption as the basis on which to prepare the accounts for the
year ended 31 March 2020. Having completed this review, the Board remains confident that the business will now
continue to trade profitably at the pre-tax level and as a consequence, the going concern assumption continues
to be the appropriate basis on which to prepare the Group’s accounts.
Adoption of IFRS 16
The Group has for the first time adopted IFRS 16 which has changed the accounting treatment of operating
leases, such as leases on office premises. Further details of this policy and of its impact on the reported results
can be found in Note 1 to the financial statements.
Financial instruments
Details of the use of financial instruments by the Group are contained in Note 14 of the financial statements.
16
TAVISTOCK INVESTMENTS PLCDIRECTORS’ REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2020 Share capital
Changes to share capital during the year are given in Note 15 to the accounts.
Charitable and Political Donations
The Group did not make any political donations in the year but made charitable donations totalling £16,372
(2019: £10,500).
Post Balance Sheet Events
After the reporting date, the Company increased its available cash resources by entering into a new £2.13 million
CBILS loan facility with its bankers, NatWest Plc. The loan is repayable over a six-year period with no repayments
in year 1. The interest rate is fixed at 2.9% and under the terms of the facility, interest during the first year will be
paid by the Government. There is no penalty for the early repayment of the facility.
Dividends
For reasons of expediency, the Directors chose not to pay a dividend in relation to the current year but intend
to take the steps necessary to enable the Company to resume the payment of dividends in due course (2019:
dividend of £57,528).
Auditors
A resolution reappointing Crowe UK 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 2020 represented 22 days’ purchases
(2019: 21 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.
In preparing the financial statements, the Directors are required to:
• select suitable accounting policies in accordance with IAS 8 Accounting Policies, changes in Accounting
Estimates and Errors and then apply them consistently;
• present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information; provide additional disclosures when compliance with
the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the entity’s financial position and financial performance; and
17
TAVISTOCK INVESTMENTS PLCDIRECTORS’ REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2020 • state that the Group has complied with IFRSs, subject to any material departures disclosed and explained
in the financial statements, and make judgments and estimates that are reasonable and prudent.
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 Financial
Reporting Standards (IFRSs) as adopted by the European Union and the Company financial statements in
accordance with UK Generally Accepted Accounting Principles (“UK GAAP”) including Financial Reporting
Standard 102, 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 judgments and estimates that are reasonable and prudent;
• for the Group financial statements, state whether they have been prepared in accordance with IFRSs as
adopted by the European Union;
• for the parent Company financial statements, state whether applicable UK GAAP 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.
18
TAVISTOCK INVESTMENTS PLCDIRECTORS’ REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2020 Directors’ interests
The Directors beneficial interests in the Ordinary Share Capital and options to purchase such shares were as
follows:
Ordinary shares of 1p each
31 March 2020
31 March 2019
Executive Directors:
Share options
Shares
Share options
Shares
Oliver Cooke
Brian Raven
Non-Executive Directors:
Roderic Rennison
Peter Dornan
26,600,000
27,709,256
26,600,000
26,188,556
31,600,000
66,172,362
31,600,000
63,855,712
-
-
355,011
-
-
-
355,011
-
Full details of the share options held by the Executive Directors are given in the Remuneration Report.
Directors’ statement 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
22 July 2020
19
TAVISTOCK INVESTMENTS PLCDIRECTORS’ REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2020 On behalf of the Board, I am pleased to present the Audit Committee report for the financial year ended 31 March 2020.
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;
• Receive and review reports from the Group’s management and auditors relating to the interim and annual
accounts;
• Reviewing 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 2020, 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 in place a robust and effective
Compliance department and regime. It has also established a separate Risk Committee which examines and
assesses the risks associated with all aspects of the Group’s operations. 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 the appointment of Crowe UK LLP in
response to the longevity of the previous firm’s tenure.
The Audit Committee also considered the non-audit services provided by them and considered that there was
no threat to 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
22 July 2020
20
TAVISTOCK INVESTMENTS PLCAUDIT COMMITTEE REPORT FOR THE YEAR ENDED 31 MARCH 2020 Compliance
Described below are the principles that the Group has applied in relation to Directors’ remuneration.
The Remuneration Committee
The only members of the Remuneration Committee are the two independent 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 twice with both members in attendance.
Share options
The share options granted to the Directors under the Company’s EMI (Enterprise Management Incentive) Share
Option Scheme or as unapproved options can be summarised as follows:
EMI /
Unapproved
Exercise price
(pence)
Vesting
Condition
Executive
Directors
Number at
start and
at end of
period
Oliver Cooke
800,000
Oliver Cooke
800,000
Oliver Cooke
5,000,000
EMI
EMI
EMI
Oliver Cooke
5,000,000
Unapproved
Oliver Cooke
7,500,000
Unapproved
Oliver Cooke
7,500,000
Unapproved
Brian Raven
800,000
Brian Raven
800,000
Brian Raven
5,000,000
EMI
EMI
EMI
Brian Raven
5,000,000
Unapproved
Brian Raven
10,000,000
Unapproved
Brian Raven
10,000,000
Unapproved
5.25
5.25
5.25
5.25
6.0
6.5
5.25
5.25
5.25
5.25
6.0
6.5
Continued
employment
Continued
employment
£5 mill pre-tax
£1.5Bn FUM
£1.8Bn FUM
£7 mill pre-tax
Continued
employment
Continued
employment
£5 mill pre-tax
£1.5Bn FUM
£1.8Bn FUM
£7 mill pre-tax
Date from
which
exercisable
Expiry
date
Oct ‘17
Oct ‘24
Oct ‘19
Oct ‘24
Apr ‘17
Apr ‘17
Apr ‘18
Apr ‘18
Oct ‘17
Apr ‘27
Apr ‘27
Apr ‘28
Apr ‘28
Oct ‘24
Oct ‘19
Oct ‘24
Apr ‘17
Apr ‘17
Apr ‘18
Apr ‘18
Apr ‘27
Apr ‘27
Apr ‘28
Apr ‘28
The market price of the shares at 31 March 2020 was 1.5 pence (2019: 3.08 pence) and the range during the
financial year was 1.4 pence to 3.3 pence.
21
TAVISTOCK INVESTMENTS PLCREMUNERATION REPORT FOR THE YEAR ENDED 31 MARCH 2020 Service contracts
The term of the Directors’ service contracts can be summarised as follows:
Executive Directors
Commencement date
Term
Oliver Cooke
3 May 2013
Brian Raven
12 May 2014
Non-executive
Directors
Roderic Rennison
12 May 2014
Peter Dornan
22 August 2017
Directors’ remuneration
Fixed to 31 March 2022, terminable thereafter on
twelve months’ notice
Fixed to 31 March 2022, terminable thereafter on
twelve months’ notice
Initial term 2 years, terminable at any time on three
months’ notice
Initial term 2 years, terminable at any time on three
months’ notice
Details of each Director’s remuneration are provided in Note 5 to the financial statements entitled Staff Costs.
Directors’ interest in shares
Details of the Directors beneficial shareholdings can be found in the Directors Report.
Approved by the Committee and signed on its behalf by
Roderic Rennison - Committee Chairman
22 July 2020
22
TAVISTOCK INVESTMENTS PLCREMUNERATION REPORT (continued) FOR THE YEAR ENDED 31 MARCH 2020
Opinion
We have audited the financial statements of Tavistock Investments plc (the “Company”) and its subsidiaries (the
“Group”) for the year ended 31 March 2020, which comprise:
• the Group consolidated statement of comprehensive income for the year ended 31 March 2020;
• the Group consolidated and Company statements of financial position as at 31 March 2020;
• the Group and Company statements of changes in equity for the year then ended;
• the Group consolidated statement of cash flows for the year then ended; and
• the 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 (IFRSs) as adopted by the European Union.
The financial reporting framework that has been applied in the preparation of the Parent company financial
statements is applicable law and UK Accounting Standards, including Financial Reporting Standard 101 (“FRS
101”) Reduced Disclosure Framework, the Financial Reporting Standard applicable in the UK and Republic of
Ireland (United Kingdom Generally Accepted Accounting Practice).
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 2020 and of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
• the Parent 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 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, 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
We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report
to you when:
• the Directors’ use of the going concern basis of accounting in the preparation of the financial statements
is not appropriate; or
• the Directors have not disclosed in the financial statements any identified material uncertainties that
may cast significant doubt about the Group’s or the Company’s ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months from the date when the financial
statements are authorised for issue.
23
TAVISTOCK INVESTMENTS PLCINDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF TAVISTOCK INVESTMENTS PLC FOR THE YEAR ENDED 31 MARCH 2020 Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it
could reasonably be expected to change the economic decisions of a user of the financial statements. We used
the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.
Based on our professional judgment, we determined overall materiality for the Group financial statements as
a whole to be £215,000 (FY2019: £200,000), based on 0.75% of Total Group Turnover (FY2019: % of Total Group
turnover not reported).
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for the
audit of the financial statements. Performance materiality is set based on the audit materiality as adjusted for
the judgments made as to the entity risk and our evaluation of the specific risk of each audit area having regard
to the internal control environment.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party
transactions and Directors’ remuneration.
We agreed with the Board of Directors to report to it all identified errors in excess of £10,750 (FY2019: £10,000).
Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on
qualitative grounds.
Overview of the scope of our audit
The Group consists of Tavistock Investments Plc itself and the subsidiaries as disclosed in Note IV to the Company
financial statements.
All of the trading subsidiaries, excluding the non-UK registered entities and King Financial Planning LLP, have
been subject to a full scope audit.
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 (whether or not due to fraud) that we identified. These matters included 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. These matters were 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.
This is not a complete list of all risks identified by our audit.
Key audit matter
How the scope of our audit addressed the key audit matter
Revenue recognition
The Group derives its revenue from
fees and commissions arising
from
investment management
and advisory support services.
During the year ended 31 March
2020, the Group recorded total
revenue of £28,803k
(FY2019:
£27,342k).
fees
Investment management
and commissions are earned
• For each company in the Group, we gained an understanding of its
business model and the services and products it delivers to its customers;
• Based on that understanding, we identified when “control” passes to the
customer and, consequently, when revenue is earned;
• We selected a sample of contracts to confirm our understanding of the
principal terms and obligations;
• We gained an understanding of the key systems used to capture and
record that income and evaluate any key controls;
• Where the Group utilises third party platforms we evaluated those
24
TAVISTOCK INVESTMENTS PLCINDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF TAVISTOCK INVESTMENTS PLC (continued)FOR THE YEAR ENDED 31 MARCH 2020 platforms and the safeguards management have in place to corroborate the
output from those platforms;
• We performed an overall analytical review and corroborated the reasons for
any large and unusual variances;
• For a selection of transactions, we confirmed that the recognition criteria in
relation to the income earned in the period has been met;
• We reviewed and tested the basis for accrued and deferred income;
• We reviewed aged receivables profile and credit notes issued after the
reporting date; and
• Where relevant, we reviewed and tested revenue cut off procedures.
• We evaluated, in comparison to the requirements set out in IAS 36,
management’s assessment (using discounted cash flow models) as to
whether goodwill and/or other intangible assets were impaired.
• We challenged, reviewed and considered by reference to external evidence,
management’s impairment and fair value models as appropriate and their
key estimates, including the discount rate. We reviewed the appropriateness
and consistency of the process for making such estimates.
services
from the provision of investment
management
and
account for 19% of total revenue.
Advisory support services fees and
commissions are earned from the
provision of support services to a
network of financial advisers and
account for 81% of total revenue.
The key revenue recognition risk
is in respect of ensuring revenue
is recognised in the year that it
has been earned.
Carrying value of goodwill and
other intangible assets
The Group’s intangible assets are
comprised of goodwill arising
on consolidation, customer &
adviser relationships, regulatory
approvals & systems and internally
developed assets.
When assessing the carrying
value of goodwill and intangible
assets, management make
regarding
judgments
the
appropriate
cash generating
unit, strategy, future trading and
profitability and the assumptions
underlying these. We considered
the risk that goodwill and/or other
intangible assets were impaired.
Going concern
is responsible
for
The Board
ensuring
is appropriate to
it
prepare the Group’s financial
statements on the basis that it
is a going concern for a period
of at least 12 months from the
date of approving the financial
statements.
• We obtained and reviewed the Board’s assessment of going concern, which
included considerations arising from the COVID-19 pandemic. The Directors
have completed a full assessment of the Group’s financial resources, including
forecast projections.
• We challenged budgets used by management in their going concern
assessment by assessing the degree of effectivity in the management’s
budgeting process by comparing the prior year budgets with actual figures
and by comparing the first quarter of the 2021 budget to the actual Q1 2021
results.
• We examined within the working capital forecasts the key inputs within the
model and corroborated them through discussions with management.
25
TAVISTOCK INVESTMENTS PLCINDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF TAVISTOCK INVESTMENTS PLC (continued)FOR THE YEAR ENDED 31 MARCH 2020 Legal and regulatory
environment
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.
• We obtained client workings for the provision for the Bartlett case.
• We obtained the insurance documentation to confirm that the Group is
covered for the case. We agreed a sample of insurance proceeds already
recovered to bank receipts.
• We held discussions with the management and ascertained the financial
and other impact of the status of the FCA Enforcement investigations into
aspects of the subsidiary company’s actions around the Bartlett fraud at year
end.
• We sought confirmation from the Group’s legal representatives as to their
opinions relating to the likelihood and potential level of settlement.
• We held discussions/calls with the Group’s legal representative as to the
nature of this case.
• We reviewed correspondences relating to claims and assessed independent
legal advice provided which includes a grading of settlement risk.
• We ensured adequate disclosure has been made for the provision in the
notes to the accounts and Strategic/Directors’ reports.
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole.
They were not designed to enable us to express an opinion on these matters individually and we express no such
opinion.
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 our 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.
26
TAVISTOCK INVESTMENTS PLCINDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF TAVISTOCK INVESTMENTS PLC (continued)FOR THE YEAR ENDED 31 MARCH 2020 Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the 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 by the Company, or returns adequate for our audit
have not been received from branches not visited by us; or
• the 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 the Directors for the financial statements
As explained more fully in the Directors’ responsibilities statement set out on page 18, 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 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 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 an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a 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 the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
John Glasby (Senior Statutory Auditor)
For and on behalf Of Crowe U.K. LLP
London
22 July 2020
27
TAVISTOCK INVESTMENTS PLCINDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF TAVISTOCK INVESTMENTS PLC (continued)FOR THE YEAR ENDED 31 MARCH 2020
Revenue
Cost of sales
Gross profit
Administrative expenses
(Loss)/Profit from Operations
Memorandum:
Adjusted EBITDA
Depreciation & amortisation
Share based payments
Acquisition related costs and exceptional items
Intangible asset impairment
(Loss)/Profit from Operations
Finance costs
Profit share due to fellow member of LLP
Loss before taxation
Taxation
Loss after taxation and attributable to equity holders of the
parent and total comprehensive income for the year
Loss per share
Basic and diluted
Year ended
Year ended
31 March
31 March
2020
£’000
28,803
2019
£’000
27,342
(17,048)
(16,198)
11,755
11,144
(17,228)
(10,988)
(5,473)
156
1,825
(1,570)
(229)
(460)
(5,039)
(5,473)
(241)
(25)
(5,739)
274
1,475
(1,053)
(248)
(18)
-
156
(274)
-
(118)
(4)
(5,465)
(122)
(0.95p)
(0.02p)
Note
3
3
3
4
8&9
3
9
11
6
7
The notes on pages 33-49 form part of the Group financial statements.
28
TAVISTOCK INVESTMENTS PLCCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 MARCH 2020
31 March 2020
31 March 2019
Note
£’000
£’000
£’000
£’000
ASSETS
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Non-current assets
Tangible fixed assets
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Non-current liabilities
Other payables
Loan & Lease liability
Payments due regarding purchase of
client lists
Provisions
Deferred taxation
Total liabilities
Total net assets
Capital and reserves attributable to
owners of the parent
Share capital
Share premium
Retained (loss)/earnings
Total equity
10
8
9
11
11
11
11
12
13
15
915
16,907
4,998
2,416
7,414
17,822
25,236
586
19,897
5,353
3,116
8,469
20,483
28,952
(4,994)
(3,942)
-
(1,396)
(1,234)
(2,115)
(93)
(9,832)
15,404
13,426
6,001
(4,023)
15,404
(13)
(1,817)
(310)
(2,465)
(409)
(8,956)
19,996
13,101
5,681
1,214
19,996
The financial statements were approved by the Board and authorised for issue on 22 July 2020.
Oliver Cooke - Chairman
The notes on pages 33-49 form part of the Group financial statements.
29
TAVISTOCK INVESTMENTS PLCCONSOLIDATED STATEMENT OF FINANCIAL POSITIONFOR THE YEAR ENDED 31 MARCH 2020 31 March 2018
Issue of shares
Cost of share issue
Loss for the year total and comprehensive income
Equity settled share based payments
Share
capital
Share
premium
Retained
earnings/
(deficit)
Total equity
£’000
£’000
£’000
£’000
12,720
4,882
1,088
18,690
381
-
-
-
869
(70)
-
-
-
-
(122)
248
1,250
(70)
(122)
248
31 March 2019
13,101
5,681
1,214
19,996
Payment of 2019 interim dividend*
Issue of shares
Cost of share issue
Loss for the year total and comprehensive income
Equity settled share based payments
-
325
-
-
-
-
325
(5)
-
-
(58)
-
-
(58)
650
(5)
(5,408)
(5,408)
229
229
31 March 2020
13,426
6,001
(4,023)
15,404
*On 15 May 2019, having filed unaudited interim accounts at Companies House confirming the availability of
distributable reserves, the Company announced that it would, on 12 July 2019, pay a maiden interim dividend in
relation to the 2019 financial year of 0.01p per share to all shareholders on the Company’s share register at the
close of business on Friday 28th June 2019.
The notes on pages 33-49 form part of the Group financial statements.
30
TAVISTOCK INVESTMENTS PLCCONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 MARCH 2020
Cash flows from operating activities
Loss before tax
Adjustments for:
Share based payments
Depreciation on tangible fixed assets
Amortisation of intangible assets
Impairment on intangibles
Net finance costs
Loss on disposal of fixed assets
Acquisition related costs
Cash flows from operating activities before
changes in working capital
Decrease in trade and other receivables and con-
tract assets
Increase/(decrease) in trade and other payables
Cash generated in operations
Investing activities
Year ended
31 March 2020
Year ended
31 March 2019
£’000
£’000
£’000
£’000
(5,739)
229
506
1,064
5,039
241
-
460
1,800
375
175
2,350
(118)
248
198
855
-
274
15
-
1,472
417
(800)
1,089
Intangible assets- client lists and internally
developed assets
Purchase of tangible fixed assets
Payments due regarding purchase of client lists
Deferred consideration payments
(3,112)
(114)
1,623
(1,095)
(1,646)
(279)
712
(847)
Net cash absorbed from investing activities
(2,698)
(2,060)
Financing activities
Finance costs
New loans
Leases
Loan repayments
Issue of new share capital
Dividend payment
(241)
-
(241)
(462)
650
(58)
(274)
2,000
173
(2,173)
1,250
-
Net cash from financing activities
Net (decrease)/ increase in cash and cash
equivalents
Cash and cash equivalents at beginning of the
period
Cash and cash equivalents at end of the period
(352)
(700)
3,116
2,416
976
5
3,111
3,116
31
TAVISTOCK INVESTMENTS PLCCONSOLIDATED STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 31 MARCH 2020
Reconciliation of net cashflow to movement in net debt:
Year ended
31 March 2020
Year ended
31 March 2019
Net (decrease)/increase in cash and cash equivalents
New loans
New lease liability
Lease repayments
Repayment of loans
Movement in net debt in the year
Net debt at 1 April 2019
Net Debt at 31 March 2020
The net debt comprises:
Cash
Current loans
Current leases
Non-current loans
Non-current leases
Net Debt at 31 March 2020
£000
(700)
-
(757)
446
323
(688)
782
94
£000
5
(2,000)
-
(173)
2,173
5
777
782
Year ended
31 March 2020
Year ended
31 March 2019
£000
2,416
(63)
(469)
(1,460)
(330)
94
£000
3,116
(361)
(156)
(1,523)
(294)
782
The notes on pages 33-49 form part of the Group financial statements.
32
TAVISTOCK INVESTMENTS PLCCONSOLIDATED STATEMENT OF CASH FLOWS (continued)FOR THE YEAR ENDED 31 MARCH 2020
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 at 1 Bracknell Beeches,
Old Bracknell Lane, Bracknell, Berkshire RG12 7BW. 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 International Financial Reporting
Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International
Accounting Standards Board (IASB) as adopted by the European Union (“adopted IFRSs”) and those parts of the
Companies Act 2006 which apply to companies preparing their financial statements under IFRSs.
IFRS 16
The Group has adopted the IFRS 16 modified retrospective approach from 1 April 2019 but has not restated
comparatives for the 2019 reporting period, as permitted under the specific transitional provisions in the standard.
The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the
opening statement of financial position on 1 April 2019.
The Group previously classified leases as operating or finance lease based on its assessment of whether the lease
transferred substantially all the risks and rewards of ownership. Under IFRS 16, the Group recognises right-of-use
assets and the corresponding lease liabilities for most leases by recording them on the balance sheet.
In applying IFRS 16 on transition, the Group has used the following practical expedients permitted by the standard:
• The Group has elected not to reassess whether a contract is or contains a lease as defined in IFRS 16 at
the date of initial application. For contracts entered into before the transition date, the Group relied on its
assessment made when applying IAS 17 and IFRIC 4.
• For the majority of leases, reliance has been placed on previous assessments of whether leases are onerous
under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. For leases where the right-of-use asset
has been determined as if IFRS 16 had been applied since the lease commencement date, this expedient
has not been taken.
• Accounting for operating leases with a remaining lease term of less than 12 months as at 1 April 2019 as
short-term leases.
The Group has elected not to recognise the right-of-use assets and lease liabilities for short-term leases that have
a term of 12 months or less or leases that are of low value (£5,000). Lease payments associated with these leases
are expensed on a straight-line basis over the lease term.
At inception or on assessment of a contract that contains a lease component, the Group allocates the consideration
in the contract to each lease and non-lease component based on their relative stand-alone prices. However, for
leases of properties, the Group elected not to separate non-lease components and will instead account for the
lease and non-lease component as a single lease component.
The Group’s leases 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
33
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2020 commencement date, discounted using the individual lessee company’s incremental borrowing rate taking into
account the duration of the lease.
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. It is remeasured when there is a change in future lease payments arising
from a change in index or rate, or if the Group changes its assessment of whether it will exercise an extension or
termination option. The lease liability is recalculated using a revised discount rate if the lease term changes as a
result of a modification or re-assessment of an extension or termination option.
The right-of-use 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 indexation and market rent review uplifts. Please refer to Note 8 for further details.
Basis of Consolidation
The Group comprises a holding company and a number of individual subsidiaries and all of these have been
included in the consolidated financial statements in accordance with the principles of acquisition accounting as
laid out by IFRS 3 Business Combinations.
Revenue recognition
Revenues within the advisory business are predominantly comprised of advisory support commissions. Revenues
within the investment management business are predominantly comprised of commissions related to the
level of funds under management. All revenues arise over time and are received in arrears, none are linked to
subsequent performance obligations. Costs directly attributable with fulfilment of a contract with a customer are
recognised in the income statement in line with the revenue profile of that contract, resulting in prepayments
where appropriate.
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. However, as outlined in the Chairman’s Statement, the Board
has conducted a specific review of the carrying value of the Group’s intangible assets, other than Goodwill, at
the year-end date and for the reasons outlined has concluded that the amortisation of these assets should be
accelerated so as to write their carrying value down to nil at the year-end date.
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.
34
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 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.
All intangible 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 ten years. Expenditure not
capitalised as an intangible asset has been treated as a prepayment and will be released to the profit or loss
account over the three year life of that initiative.
See page 36 for Impairment of Assets in the financial year.
Financial assets
Loans 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.
Cash and cash equivalents: These include cash in hand and deposits held at call with UK banks.
Financial liabilities
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value
is recognised in the income statement over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting date.
Payments made under operating leases (net of any incentives received from the lessor) have been recognised in
accordance with IFRS 16 as described on page 33.
Where the Group enters into a lease an asset and corresponding liability are recognised as the future minimum
value of lease payments and amortised using the effective rate of interest.
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 16.
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
35
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 expected at the end of its useful economic life.
The method of depreciation for each class of depreciable asset is:
Computer equipment
Office fixtures, fittings & equipment
Motor vehicles
Impairment of Assets
-
-
-
3 years straight line
5 years straight line
3-7 years straight line
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.
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.
As referred to in the Chairman’s Statement the Board has conducted a specific review of the carrying value of
the Group’s intangible assets, other than Goodwill, at the year-end date, and concluded that it would be both
prudent and appropriate that the amortisation of these assets should be accelerated so as to write their carrying
value down to nil at the year-end date. As a consequence, a one-off impairment provision of some £5 million
against the carrying value of these assets has been put through this year’s profit or loss account (see Note 9).
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 balance
sheet 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.
36
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020
Provisions
Provisions are 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 to offset the provision. Any net provision is recognised in the Group’s statement of
comprehensive income.
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
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 judgments 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
judgments 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 a Group level discounted cashflow over 5 years
and then in perpetuity. This consideration included reference to anticipated future cashflows of the Group. It is
also assumed a discount rate of 15%. It is considered that any reasonably possible changes in the key assumptions
(including 0% growth rate and an increased discount rate of 20%) would not result in an impairment of the
present carrying value of the goodwill. In all scenarios, the recoverable amount exceeded the carrying value.
As referred to in the Chairman’s Statement the Board has conducted a specific review of the carrying value of
the Group’s intangible assets, other than Goodwill, at the year-end date, and concluded that it would be both
prudent and appropriate that the amortisation of these assets should be accelerated so as to write their carrying
value down to nil at the year-end date. As a consequence, a one-off impairment provision of some £5 million
against the carrying value of these assets has been put through this year’s profit or loss account (see Note 9).
Revenue recognition
In applying the accounting policy ‘revenue recognition’ on page 34 the Group have made the judgment to only
recognise income that have been contracted and earnt. Accrued income represents revenue that has been earnt
but not yet received.
Deferred tax
Where the Group has recognised a deferred tax asset it is in the Directors’ judgment, supported by internally
generated forecasts, that this will ultimately be realised. The timing and size of anticipated taxable profits is
subject to uncertainty and therefore the asset recognised is subject to estimates made by the Directors around
the size and timing of taxable profits.
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 estimate
the amount of time each employee has spent on each project during the reporting period and prorate the staff
costs accordingly.
37
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 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 16.
Amortisation of Development costs and other Intangibles
Product development costs are being amortised over 10 years. The estimated useful economics lives of the
intangible assets are based on management’s judgment and experience. When management identifies the actual
useful economic lives differ materially from the estimates used to calculate amortisation, that charge is adjusted
prospectively. Key initiative costs capitalised have not been amortised in the current year as they were not ready
for use.
Contract fulfilment costs
Certain costs included in the development of key initiatives have been judged as a prepayment and will be
released to the profit or loss account over the three year life of that initiative.
Claims provision
As outlined in Note 12, having sought legal advice the Directors have judged it appropriate to make a provision
for potential liabilities arising as a consequence of the fraudulent activities of a former adviser. An equivalent
receivable provision has also been made (see Note 10) as the Directors believe that any liability that might
ultimately arise is fully covered by the professional indemnity insurance policies that the Group has in place.
3. SEGMENTAL INFORMATION
A segmental analysis of revenue and expenditure for the period is:
Investment
Management
Advisory
Support
£’000
£’000
5,518
(464)
(2,932)
23,285
(16,584)
(8,637)
Investment
Management
Advisory
Support
£’000
£’000
4,878
(223)
(1,914)
22,464
(15,975)
(6,677)
2020
£’000
28,803
(17,048)
(11,569)
(5,659)
(5,473)
2019
£’000
27,342
(16,198)
(8,591)
(2,397)
156
REVENUE
Fees and Commissions
Cost of Sales
Administrative Expenses
Unallocated group costs
(Loss)/profit from
operations
Included in Investment Management Administrative Expenses of £2.932 million is £741,685 in relation to the
impairment of Other Intangible Assets. Included in Advisory Support Administrative Expenses of £8.64 million
is £1.58 million in relation to the impairment of Intangible Assets. Included in Unallocated Group Costs of £5.66
million is £3.02 million in relation to the impairment of Intangible Assets (see Note 9).
Also included in Unallocated Group Costs of £5.66 million is £460,000 in relation to acquisition costs on previously
acquired subsidiaries.
The segmental analysis above reflects the parameters applied by the Board when considering the Group’s
monthly management accounts. The Directors do not consider a division of the consolidated statement of
financial position to be appropriate or useful for the purposes of understanding the financial performance and
position of the Group.
During the year under review the Group’s revenue was generated exclusively within the UK.
38
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 4. PROFIT FROM OPERATIONS
This is arrived at after charging:
Staff costs (see Note 5)
Depreciation
Amortisation of intangible fixed assets
Operating lease expense – property
Lease expense- property
Loss on disposal of fixed assets
Impairment of Other Intangibles
Acquisition related costs
Auditors' remuneration in respect of the Company
Audit of the Group and subsidiary undertakings
Auditors' remuneration – non-audit services –interim
Auditors' remuneration – non-audit services –taxation
5. STAFF COSTS
Staff costs for all employees, including Directors consist of:
Wages, fees and salaries
Social security costs
Pensions
Share based payment charge
2020
£’000
7,338
506
1,064
-
283
-
5,039
460
7
51
2
10
70
2020
£’000
6,130
639
340
7,109
229
7,338
2019
£’000
6,871
199
855
249
-
15
-
18
7
57
2
14
80
2019
£’000
5,702
627
294
6,623
248
6,871
The average number of employees of the group during the year
was as follows:
Directors and key management
Operations and administration
2020
2019
Number
Number
7
137
144
9
136
145
The remuneration of the highest paid director was £288,552 (2019: £289,043). The total remuneration of key
management personnel was £1,771,867 (2018: £1,597,789).
All pension contributions represent payments into defined contribution schemes.
39
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 Directors’ Detailed Emoluments
Details of individual Directors’ emoluments for the year are as follows:
O Cooke
B Raven
P Dornan*
R Rennison*
Salary & fees
Benefits in kind
& allowances
Pension
contributions
£
180,000
220,000
25,000
25,000
£
35,753
35,552
-
-
£
27,000
33,000
-
-
Total
2020
£
242,753
288,552
25,000
25,000
Total
2019
£
241,193
289,043
25,000
25,000
450,000
71,305
60,000
581,305
580,236
* Denotes non-executive Director
6. TAXATION ON PROFIT FROM ORDINARY ACTIVITIES
Current tax credit
Deferred tax (credit)/charge
Tax (credit)/charge for the year
2020
£’000
-
(274)
(274)
2019
£’000
-
4
4
The tax assessed for the period differs from the standard rate of corporation tax in the UK applied to profit before tax.
Total Loss on ordinary activities before tax
Loss on ordinary activities at the standard rate of corporation tax
in the UK of 19% (2019: 19%)
Effects of:
Unutilised losses
Expenses not deductible for tax purposes
Other timing differences
Differences between capital allowances and depreciation
Adjust closing deferred tax to average rate of tax
Deferred tax not recognised
Tax (credit)/charge for the year
2020
£’000
(5,739)
(1,090)
218
1,511
(400)
(513)
-
-
(274)
2019
£’000
(118)
(22)
-
65
-
24
(75)
12
4
Tavistock Investments Plc operates as a non-trading holding company, incurring costs but with no external
revenues against which to offset these costs. For taxation purposes, it has to date incurred losses amounting to
£3.57 million (31 March 2019 £3.57 million), and it is considered unlikely that it will be able to offset these losses
against future taxable profits, for which reason no deferred tax asset in connection with these losses has been
recognised in the accounts.
40
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 7. LOSS PER SHARE
Loss per share has been calculated using the following:
Losses (£’000)
Weighted average number of shares (‘000s)
Loss per ordinary share
2020
£’000
(5,465)
576,450
(0.95p)
2019
£’000
(122)
550,968
(0.02p)
Loss per ordinary share has been calculated using the weighted average number of shares in issue during the
relevant financial periods. IAS 33 requires presentation of diluted EPS when a company could be called upon to
issue shares that would decrease earnings per share or increase the loss per share. There would be no dilutive
impact were the share options to be exercised.
8. TANGIBLE FIXED ASSETS
Leasehold
property
Motor
Vehicles
Computer
equipment
Office
fixtures,
fittings and
equipment
Total
£’000
£’000
£’000
£’000
£’000
Cost
Balance at 1 April 2018
Additions
Disposals
Transfers
Balance at 31 March 2019
Additions
Adoption of IFRS 16
Disposals
Balance at 31 March 2020
Accumulated depreciation
Balance at 1 April 2018
Depreciation
Disposals
Transfers
Balance at 31 March 2019
Depreciation
Disposals
Balance at 31 March 2020
Net Book Value
At 31 March 2020
At 31 March 2019
-
-
-
-
-
-
841
(150)
691
-
-
-
-
-
275
(30)
245
446
-
28
-
-
-
28
-
-
(28)
-
19
4
-
-
23
5
(28)
-
-
5
287
36
(164)
125
284
107
-
(51)
340
116
145
(179)
(21)
61
96
(51)
106
234
223
598
243
(20)
(125)
696
7
-
(3)
700
288
49
(20)
21
338
130
(3)
465
235
358
913
279
(184)
-
1,008
114
841
(232)
1,731
423
198
(199)
-
422
506
(112)
816
915
586
Included in Office fixtures, fittings and equipment are assets acquired under lease agreements with a net book
value of £339,000 (2019: £426,000).
In line with the accounting standard IFRS 16 the Group has capitalised its historic operating lease agreements
in the financial year. See accounting policy on page 33 for full description of the new recognition. Included in
Leasehold property are assets acquired under lease agreements with a net book value of £446,000 (2019: £Nil).
Depreciation charged on leased assets was £426,000 (2019: £85,000).
41
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 9. INTANGIBLE ASSETS
Client
Lists
Regulatory
Approvals
& Systems
Goodwill
Arising on
Consolidation
Internally
Developed
Assets
Total
£’000
£’000
£’000
£’000
£’000
Cost
Balance at 1 April 2018
Additions
Balance at 31 March 2019
Additions
5,415
702
6,117
2,291
Balance at 31 March 2020
8,408
Accumulated depreciation
Balance at 1 April 2018
Amortisation
Impairment
Balance at 31 March 2019
Amortisation
Impairment provision
Balance at 31 March 2020
Net Book Value
At 31 March 2020
At 31 March 2019
2,221
559
-
2,780
777
3,482
7,039
1,369
3,337
1,815
-
1,815
-
1,815
788
171
-
959
171
685
1,815
-
856
14,751
-
14,751
-
480
944
1,424
825
14,751
2,249
205
-
30
235
-
-
111
125
-
236
116
875
235
1,227
14,516
14,516
1,022
1,188
22,461
1,646
24,107
3,116
27,223
3,325
855
30
4,210
1,064
5,042
10,316
16,907
19,897
As referred to in the Chairman’s Statement the Board has conducted a specific review of the carrying value of
the Group’s intangible assets, other than Goodwill, at the year-end date, and concluded that it would be both
prudent and appropriate that the amortisation of these assets should be accelerated so as to write their carrying
value down to nil at the year-end date. As a consequence, a one-off impairment provision against the carrying
value of these assets has been put through this year’s profit or loss account.
Client Lists relate to identifiable relationships between acquired companies, their adviser network and the
associated client bases.
Regulatory Approvals and Systems relate to the estimated costs incurred by acquired companies in obtaining
authorisations to carry on their relevant business and in putting in place the appropriate staffing and information
structures. As part of the review all Regulatory Approvals and Systems have now been fully amortised.
Internally Developed Assets predominately represent costs associated with various initiatives including the
i-stock app. These have not been amortised in the current year as they were not ready for use.
Amortisation is charged over a period between 5 and 10 years.
The amortisation charge of £1.064 million , in the table above, when taken with the depreciation charge of £506k,
referred to in Note 8 above, gives a combined total for the year of £1.57 million.
42
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 GOODWILL AND IMPAIRMENT
The carrying value of goodwill in respect of each cash generating unit is as follows:
Financial Advisory business
Investment Management business
31 March 2020
31 March 2019
£’000
12,601
1,915
14,516
£’000
12,601
1,915
14,516
In assessing the carrying value of Goodwill the Directors have used a Group level discounted cashflow over 5 years
and then in perpetuity. This consideration included reference to anticipated future cashflows of the Group. It is
also assumed a discount rate of 15%. It is considered that any reasonably possible changes in the key assumptions
(including 0% growth rate and an increased discount rate of 20%) would not result in an impairment of the
present carrying value of the goodwill. In all scenarios, the recoverable amount exceeded the carrying value.
10. TRADE AND OTHER RECEIVABLES
Trade receivables
Prepaid Law Society contract expenses
Other prepayments and accrued income
Other receivables
31 March 2020
31 March 2019
£’000
96
153
2,333
2,416
4,998
£’000
1,391
153
1,186
2,623
5,353
Included within other receivables is the sum of £2,100,000 being the estimated amount recoverable from insurers
in connection with the provision detailed in Note 12.
11. LIABILITIES
Current liabilities
Trade payables
Accruals
Commissions payable
VAT and social security liabilities
Other payables
Payments due regarding purchase of client lists
Leases
Term loan
Non-current liabilities
Trade payables
Payments due regarding purchase of client lists
Leases
Term loan
31 March 2020
31 March 2019
£’000
1,151
770
1,130
177
144
696
469
457
4,994
-
1,234
330
1,066
2,630
43
£’000
430
646
1,306
184
204
655
156
361
3,942
13
310
294
1,523
2,140
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020
The term loan facility with NatWest was entered into in November 2018. The remaining term of this facility is 4
years. It is secured by a fixed and floating charge over the assets of the Group. The loan carries an interest rate
of 5.12% over the Bank of England base rate. After the reporting date the Group arranged a 12 month capital
repayment holiday on the facility commencing June 2020 however, the amount included within current liabilities
represents the amount considered at the year-end date to be payable within the following 12 months.
Included within the £241,000 (2019: £274,000) finance costs is an amount of £122,000 (2019: £219,000) related to
bank loans. The remainder of the charge relates to leases.
12. PROVISIONS
Balance at 1 April 2019
Payments to settle claims
Provisions released
Balance at 31 March 2020
Total
£’000
2,465
(367)
17
2,115
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 sought legal advice, the Directors consider it appropriate to make a provision of
£2,100,000 regarding this matter. This provision is matched by an equivalent receivable provision (see Note 10) as
the Directors believe that any liability that might ultimately arise is fully covered by the professional indemnity
insurance policies that the Group has in place.
13. DEFERRED TAX
The Directors anticipate that the Deferred tax asset relating to losses brought forward will be realised within the
medium term.
Balance at 1 April 2019
Deferred tax credit in the year
Balance at 31 March 2020
The deferred tax provision comprises:
Unutilised tax losses
Deferred tax on intangibles
Other timing differences
Total
£’000
(409)
316
(93)
31 March 2020
31 March 2019
£’000
(103)
196
-
93
44
£’000
(321)
544
186
409
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 14. FINANCIAL RISK MANAGEMENT
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 credit risk primarily on its trade receivables, which are spread over a range of Investment
platforms and advisers. Receivables are broken down as follows:
Loans, accrued income and receivables
Trade receivables
Accrued income
Other receivables
The table below illustrates the due date of trade receivables:
Current
31 – 60 days
61 – 90 days
91 – 120 days
121 and over
Liquidity risk
31 March 2020
31 March 2019
£’000
95
2,486
316
£’000
1,391
678
173
31 March 2020
31 March 2019
£’000
41
13
4
10
27
95
£’000
917
177
179
20
98
1,391
Liquidity risk arises 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 and so cash holdings may be high during certain periods throughout the year.
Other than the loans referred to in Note 11, the Group currently has no bank borrowing or overdraft facilities.
After the reporting date, the Company increased its available cash resources by entering into a new £2.13 million
loan facility with its bankers, NatWest Plc. The loan is repayable over a six-year period with no repayments in year 1.
The interest rate is fixed at 2.9% and under the terms of the facility, interest during the first year will be paid by the
Government. There is no penalty for the early repayment of the facility.
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.
Loan Covenants
The Group has provided various performance covenants to NatWest bank in connection with the term loan
facility entered into in November 2018. These give rise to a risk of non-compliance which the Group mitigates by
continually monitoring its performance against the covenants.
45
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 Cash at bank and cash equivalents
At the year end the Group had the following cash balances:
31 March 2020
31 March 2019
£’000
2,416
£’000
3,116
Cash at bank comprises Sterling cash deposits held within a number of banks. At 31 March 2020, £199,084 (2019:
£198,000) of cash is held on deposit in special interest bearing accounts to maximise returns.
All monetary assets and liabilities within the Group are denominated in the functional currency of the operat-
ing unit in which they are held. All amounts stated at carrying value equate to fair value.
Financial liabilities at amortised cost
Trade payables
Accruals
The table below illustrates the ageing of trade payables:
Current
31 – 60 days
61 – 90 days
91 – 120 days
121 and over
31 March 2020
31 March 2019
£’000
1,151
1,900
£’000
1,084
648
31 March 2020
31 March 2019
£’000
837
211
40
52
11
1,151
£’000
954
130
-
-
-
1,084
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 and should additional capital be
required management ensure that this is raised 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.
Share capital is used to raise cash and as direct payments to third parties for assets or services acquired.
46
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 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.
15. SHARE CAPITAL
Called up share capital
Allotted, called up and fully paid
607,795,801 Ordinary shares of 1 pence each
(2019: 575,295,801 shares of 1 pence each)
30,450,078 Deferred shares of 9p each
465,344,739 Deferred “A” shares of 0.99 pence each
31 March 2020
31 March 2019
£’000
£’000
6,078
2,741
4,607
13,426
5,753
2,741
4,607
13,101
On 19 March 2020, 32,500,000 new Ordinary shares of 1p were issued at an issue price of 2p per share.
The largest participant in the fundraising was Hugh Simon who subscribed £600,000 to acquire 30,000,000
shares, representing a 4.94% holding in the enlarged share capital of the Company.
The following describes the nature and purpose of each of the Company’s reserves:
Reserve
Description and purpose
Share capital
Share premium
Amount subscribed for share capital at nominal value.
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.
47
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020
16. SHARE BASED PAYMENTS
During the year the Company issued options over 250,000 (2019: 64,232,500) Ordinary shares.
These options have been valued using the Black-Scholes pricing model. The weighted average of the assumptions
used in the model are:
Share price at grant
Exercise price
Expected volatility
Expected life
Risk free rate
31 March 2020
31 March 2019
2.81p
5.25p
46%
10 years
0.8%
3.06p
6.19p
19%
10 years
1.4%
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.
Outstanding at the beginning of the year
Granted during the year
Lapsed during the year
Outstanding at the end of the year
31 March 2020
31 March 2019
Weighted
average
price
(pence)
5.72
5.25
5.25
5.72
Weighted
average
price
(pence)
5.25
6.19
5.40
5.70
Number
129,657,799
250,000
(3,032,016)
126,875,783
Number
75,429,099
64,232,500
(10,003,800)
129,657,799
The exercise price of options outstanding at the end of the year, 7,818,000 of which had vested and were
exercisable, was 5.25p and their weighted contractual life was 10 years.
There were no options over Ordinary shares exercised in the period. The weighted average fair value of each
option granted during the current period was assessed as being 1.14p and their weighted average contractual
life was 10 years.
The vesting conditions in relation to management are disclosed in the Remuneration Report on page 21. The only
vesting condition for other staff is continuous employment.
48
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 17. LEASING COMMITMENTS
The Group’s future minimum lease payments fall
due as follows:
Not later than 1 year
Later than 1 year and not later than 5 years
31 March 2020
31 March 2019
£’000
£’000
503
393
896
248
391
639
In line with the accounting standard IFRS 16 the Company has capitalised its operating lease agreements in the
financial year. See accounting policy on page 33 for full description of the new recognition. Included in mini-
mum lease payments not later than 1 year is £293,000 in relation to operating leases and in later than 1 year and
not later than 5 years is £221,000 in relation to operating leases.
18. RELATED PARTY TRANSACTIONS
During the year, Tavistock Wealth Limited received fees of £3,627,618 (2019: £4,409,048) 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.
In the prior financial year, the Group commissioned £8,434 of marketing and promotional services from
Pumphouse Limited, a Company of which Jamie Raven, Brian Raven’s son, is a Director.
As announced on 27 September 2019, in order to bolster the Company’s regulatory capital position in a
manner that would not be dilutive to shareholders, it entered into an unsecured, convertible loan facility with
two of its Directors, Oliver Cooke and Brian Raven, and with its then Chief Investment Officer, Christopher
Peel (the “Facility”).
The Facility was for £630,000 and could be drawn down by the Company at any point within the following year.
Each of the potential lenders gave an irrevocable undertaking to the Company that upon receipt of 30 days’
notice and subject to compliance with regulatory obligations regarding close periods, they would provide up to
£210,000 of loan capital to the Company on the following terms:
• Facility fee 5% of the funds committed;
• interest payable on funds drawn down of 10%;
• the repayment of any sums drawn down, together with interest thereon, to be made on 30 September
2020;
• the option for the Company only, at its absolute discretion, to elect to convert amounts drawn down,
together with interest thereon, into new ordinary shares in the Company of 1p each, at a conversion price
of 2p per share, being the then bid price; and
• a non-utilisation fee payable, if appropriate, on 30 September 2020, equivalent to 3% of funds committed
but not drawn down.
49
TAVISTOCK INVESTMENTS PLCNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020
At 31 March 2020
At 31 March 2019
£’000
£’000
£’000
£’000
Non-current assets
Investments
Tangible fixed assets
Intangible fixed assets
Current assets
Debtors
Cash at bank and in hand
III
IV
V
VI
VIII
17,973
744
-
18,717
1,561
539
2,100
1,197
349
1,546
Creditors: amounts falling due within one year
IX
(6,660)
(6,106)
Net current liabilities
Debtors: amounts falling due after one year
Creditors: amounts falling due after one year
Total assets less total liabilities
Capital and reserves
Called up share capital
Share premium account
Retained reserves
Shareholders’ funds
VII
X
XI
II
(4,560)
-
(1,732)
12,425
13,426
6,006
(7,007)
12,425
22,479
437
251
23,167
(4,560)
299
(1,766)
17,140
13,101
5,681
(1,642)
17,140
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 £8,136,000 (2019: £2,356,000).
The financial statements were approved by the Board and authorised for issue on 22 July 2020.
Oliver Cooke- Chairman
The notes on pages 52 - 57 form part of the Company financial statements.
50
TAVISTOCK INVESTMENTS PLCCOMPANY BALANCE SHEETAS AT 31 MARCH 2020 31 March 2018
Issue of shares
Cost of share issue
Loss after tax
Equity settled share based payments
Share
Capital
£’000
Share
Premium
Retained
deficit
Shareholder
funds
£’000
£’000
£’000
12,720
4,882
466
18,068
381
-
-
-
869
(70)
-
-
-
-
1,250
(70)
(2,356)
(2,356)
248
248
31 March 2019
13,101
5,681
(1,642)
17,140
Dividend received
Payment of 2019 interim dividend*
Issue of shares
Loss after tax
Equity settled share based payments
-
-
-
-
325
325
2,600
2,600
(58)
-
(58)
650
-
-
-
-
(8,136)
(8,136)
229
229
31 March 2020
13,426
6,006
(7,007)
12,425
*On 15 May 2019, having filed unaudited interim accounts at Companies House confirming the availability of
distributable reserves, the Company announced that it would, on 12 July 2019, pay a maiden interim dividend in
relation to the 2019 financial year of 0.01p per share to all shareholders on the Company’s share register at the
close of business on Friday 28th June 2019.
The notes on pages 52 - 57 form part of the Company financial statements.
51
TAVISTOCK INVESTMENTS PLCCOMPANY STATEMENT OF CHANGES IN EQUITYFOR THE YEAR ENDED 31 MARCH 2020
I. ACCOUNTING POLICIES
The principal accounting policies applied are summarised below:
Basis of preparation
For the financial year ended 31 March 2020, the Company elected to prepare the financial statements in
accordance with Financial Reporting Standard 101 Reduced Disclosure Framework. The purpose of this was to
more closely align the Company’s accounting policies with the Group’s policies. This transition is not considered
to have had a material effect on the financial statements.
The financial statements have been prepared under the historical cost convention as modified by the revaluation
of Tangible Assets 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 judgment in applying the
Company’s accounting policies (see Note 2 in the Group financial statements).
All accounting policies that are not unique to the Company are listed on pages 33-36. 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. On
this basis, and with the impact of COVID-19 fully considered in budgeting, the Directors 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. An impairment has
been recognised in the financial year (see Note IV).
IFRS 16
The Company has adopted the IFRS 16 modified retrospective approach from 1 April 2019 but has not restated
comparatives for the 2019 reporting period, as permitted under the specific transitional provisions in the standard.
For full discussion on the adoption of IFRS 16 see Note 1 in the consolidation financial statements.
II. 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 or loss account in these financial statements. The Company’s loss for the year was
£8,136,000 (2019: loss of £2,356,000). Included within this loss is an impairment to investments in subsidiaries of
£4,952,000 and costs in relation to acquisition of £460,000.
All staff are employed under Tavistock Investments Plc and staff numbers are shown in Note III. Total staff costs
total £722,375 (2019: £557,658).
52
TAVISTOCK INVESTMENTS PLCNOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2020
III. STAFF COSTS
Staff costs for all employees, including Directors consist of:
Wages, fees and salaries
Social security costs
Pensions
The average number of employees of the Company
during the year was as follows:
Directors and key management
Operations and administration
2020
£’000
567
69
86
722
2020
£’000
2
3
5
2019
£’000
410
61
92
563
2019
£’000
3
2
5
Not included in the amounts disclosed above is the Company’s recharges to its subsidiaries. In the year ended
March 2020 the Company recharged £6.39 million (2019: £6.06 million) in relation to 139 (2019: 140) staff members.
IV. INVESTMENTS
Subsidiary undertakings
Cost
Balance at 1 April 2019
Additions
Balance at 31 March 2020
Provisions for impairment
Balance at 1 April 2019
Impairment charge
Balance at 31 March 2020
Carrying value of investments
31 March 2020
31 March 2019
£’000
22,836
446
23,282
(357)
(4,952)
(5,309)
17,973
£’000
22,437
399
22,836
(327)
(30)
(357)
22,479
As referred to in the Chairman’s Statement the Board has conducted a detailed review of the carrying value
of the Group’s intangible assets at the year-end date. This resulted in the full impairment of intangible assets,
other than Goodwill, obtained on acquisition. The same intangible assets are recognised within the Company’s
investments in its subsidiary undertakings above, and consequently an impairment provision of £4.95 million has
been made against the carrying value of these assets.
53
TAVISTOCK INVESTMENTS PLCNOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 At the year end the Company had the following wholly owned subsidiaries:
Registered Office Address
Name
1 Bracknell Beeches, Old Bracknell Lane, Bracknell,
RG12 7BW
Tavistock Wealth Limited
Tavistock Partners Limited
Tavistock Partners (UK) Ltd
Duchy Independent Financial Advisers Limited
Price Bailey Financial Services Limited
Tavistock Private Client Limited
The Tavistock Partnership Limited
Tavistock Services Limited
Tavistock Estates Planning Services Limited
King Financial Planning LLP
3, The Cornerstone Market Place, Kegworth, Derby
DE74 2EE
Cornerstone Asset Holdings Limited
26 Upper Pembroke Street, Dublin 2, Ireland
Tavistock Wealth (Global) Limited
30, Boulevard Royal, L-2449 Luxembourg, Grand-
Duché de Luxembourg
Tavistock S.à.r.l.
Holding
Direct
Direct
Direct
Direct
Direct
Indirect
Direct
Direct
Direct
Direct
Direct
Direct
Direct
The Group has chosen not to consolidate Tavistock S.à.r.l. as it is immaterial to the Group.
The Company also had a 50% holding and exercised management control over King Financial Planning LLP.
V. TANGIBLE FIXED ASSETS
Leasehold
tangible
assets
Computer
equipment
Office fixtures,
fittings and
equipment
Cost
£’000
£’000
Balance at 1 April 2019
Additions
Adoption of IFRS 16
Disposals
Balance at 31 March 2020
Accumulated depreciation
Balance at 1 April 2019
Depreciation charge
Disposals
Balance at 31 March 2020
Net Book Value
At 31 March 2020
At 31 March 2019
-
-
573
-
573
-
207
-
207
366
-
51
98
-
(19)
130
19
38
(19)
38
92
32
£’000
673
3
-
-
676
268
122
-
390
286
405
Total
£’000
724
101
573
(19)
1,379
287
367
(19)
635
744
437
Included in Office fixtures, fittings and equipment are assets acquired under finance lease agreements with a
net book value of £296,000 (2019: £360,000).
54
TAVISTOCK INVESTMENTS PLCNOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 In line with the accounting standard IFRS 16 the Company has capitalised its operating lease agreements in
the financial year. See accounting policy on page 52 for full description of the new recognition. Included in
Leasehold tangible assets are assets acquired under operating lease agreements with a net book value of
£366,000 (2019: £Nil).
VI. INTANGIBLE FIXED ASSETS
Cost
Balance at 1 April 2019
Additions
Disposals
Balance at 31 March 2020
Accumulated amortisation
Balance at 1 April 2019
Amortisation charge
Disposals
Balance at 31 March 2020
Net Book Value
At 31 March 2020
At 31 March 2019
VII. DEBTORS: due within one year
Trade debtors
Prepayments and accrued income
Other debtors
Amounts owed by subsidiary undertakings
VIII. DEBTORS: due after one year
Deferred tax asset
Computer software
£’000
496
-
(496)
-
245
118
(363)
-
-
251
31 March 2020
31 March 2019
£’000
19
186
190
1,166
1,561
£’000
-
227
152
818
1,197
31 March 2020
31 March 2019
£’000
-
-
£’000
299
299
55
TAVISTOCK INVESTMENTS PLCNOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 IX. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
X. CREDITORS: amounts falling due within one year
Trade creditors
Accruals
Other tax and social security
Other creditors
Deferred consideration
Term loan
Amounts owed to subsidiary undertakings
XI. CREDITORS: amounts falling due after one year
Term loans
Other creditors
31 March 2020
31 March 2019
£’000
539
539
£’000
349
349
31 March 2020
31 March 2019
£’000
430
88
255
404
-
63
5,420
6,660
£’000
209
130
224
136
500
361
4,546
6,106
31 March 2020
31 March 2019
£’000
1,460
272
1,732
£’000
1,523
243
1,766
Details of the Company’s borrowings are provided in Note 11 to the consolidated financial statements.
XII. SHARE CAPITAL
Details of the Company’s share capital and the movements in the year can be found in Note 15 to the consolidated
financial statements.
XIII. SHARE OPTIONS
EMI Share Option Scheme
Details of the share options outstanding at 31 March 2020 can be found in Note 16 in the consolidated financial
statements.
56
TAVISTOCK INVESTMENTS PLCNOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020
XIV. RELATED PARTY TRANSACTIONS
Advantage has been taken by the Company of the exemptions provided by Section 33.1A of FRS 101 not to disclose
Group transactions in respect of wholly owned subsidiaries.
As announced on 27 September 2019, in order to bolster the Company’s regulatory capital position in a manner
that would not be dilutive to shareholders, it entered into an unsecured, convertible loan facility with two of
its Directors, Oliver Cooke and Brian Raven, and with its then Chief Investment Officer, Christopher Peel (the
“Facility”).
The Facility was for £630,000 and could be drawn down by the Company at any point within the following year.
Each of the potential lenders gave an irrevocable undertaking to the Company that upon receipt of 30 days’
notice and subject to compliance with regulatory obligations regarding close periods, they would provide up to
£210,000 of loan capital to the Company on the following terms:
• Facility fee 5% of the funds committed;
• judgment payable on funds drawn down of 10%;
• the repayment of any sums drawn down, together with interest thereon, to be made on 30
September 2020;
• the option for the Company only, at its absolute discretion, to elect to convert amounts drawn
down, together with interest thereon, into new ordinary shares in the Company of 1p each, at a
conversion price of 2p per share, being the then bid price; and
• a non-utilisation fee payable, if appropriate, on 30 September 2020, equivalent to 3% of funds
committed but not drawn down.
57
TAVISTOCK INVESTMENTS PLCNOTES FORMING PART OF THE COMPANY FINANCIAL STATEMENTS (continued)FOR THE YEAR ENDED 31 MARCH 2020 TAVISTOCK INVESTMENTS PLC
ADVISERS
Registrars
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey
GU9 7DR
Nominated Adviser
Arden Partners Plc
Broker
125 Old Broad Street
London
EC2N 1AR
Allenby Capital
5 St Helen’s Place
London
EC3A 6AB
Independent Auditors Crowe U.K. LLP
St Bride’s House
10 Salisbury Square
London
EC4Y 8EH
58
For more information about Tavistock Investments Plc or our investment products please write to the address
below or email us at investments@tavistockinvestments.com
Tavistock Investments PLC
1 Bracknell Beeches, Old Bracknell Lane, Bracknell RG12 7BW United Kingdom 01753 867000
Tavistock Investments PLC is registered in England and Wales with company number 05066489.
Registered Office as above.
TAVISTOCK INVESTMENTS PLCREPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020