Tavistock turns in solid first half after selling TWL

Financial services company Tavistock reported interim net assets of £49.8m in its half-year accounts on Monday, up from £15m at the start of the period.

The AIM-traded firm said an initial £20m of consideration had been received from the sale of Tavistock Wealth (TWL) to Titan Wealth Holdings in August, with the proceeds enabling it to repay all its outstanding borrowings of £3.53m.

They also allowed it to buy back and cancel 4.7% of its issued share capital, and pay an interim dividend of 0.05p per share, which was five times higher than its maiden dividend of 0.01p per share in 2019.

It also increased the firm’s net asset value per share to 8.6p as at the end of the first half on 30 September, from 3p at the end of March.

Revenues for the six months were 27% higher year-on-year at £17m, while adjusted EBITDA was 13% lower at £1.1m.

That fall in earnings was put down to the one-off impact of staff salary sacrifice and government furlough support during the first half of 2020, and the disposal of TWL in August.

Profit before tax totalled £35.5m for the first half, swinging from a £0.42m loss a year ago, with the figure including the present-day value of the profit arising from the disposal of TWL.

Looking specifically at its advisory business, Tavistock reported a 37% increase in revenues to £14.7m, with advisory revenues expected to exceed total 2020 group revenues.

The division’s contribution to group adjusted EBITDA was 56% higher year-on-year at £1.5m.

Its investment management business, meanwhile, saw revenues reduce 13% to £2.4m and EBITDA narrow by 6% to £1.6m due to the group benefitting from only five months' contribution from the investment management business prior to the completion of the sale to Titan.

“The strategic partnership with Titan and sale of TWL has transformed the shape of the business and its prospects,” said chief executive officer Brian Raven.

“It has enabled the delivery of immediate enhancement in value to shareholders while providing the company with the firepower to accelerate the growth of the business through acquisitions, with some exciting prospective targets already being considered.”

Raven said that in addition, Tavistock’s advisory business was performing “strongly”, and was already on track to deliver revenues ahead of the entire group in the prior year.

“We are in a strong position to continue developing a much larger and more profitable distribution and wealth management group, to deliver enhanced value to shareholders.”

At 1031 GMT, shares in Tavistock Investments were up 15.85% at 4.75p.