Tavistock has said the sale of its wealth business to Titan has “transformed the shape of the business and its prospects”.
In its latest half-year results, Tavistock said it had received the initial £20m of consideration from sale of Tavistock Wealth received in August 2021.
Tavistock chief executive Brian Raven said the sale has enabled the delivery of “immediate enhancement in value” to shareholders.
It has also provided the company with the firepower to accelerate the growth of the business through acquisitions.
Raven hinted at several “exciting prospective targets” already being considered by the board.
Since receiving the initial £20m, Tavistock has been able to repay all its outstanding borrowings of £3.53m to its bankers Natwest.
It has been able to buy back and cancel 4.7% of its issued share capital, and pay an interim dividend of 0.05p per share – five times higher than maiden dividend of 0.01p per share in 2019.
It has also increased the net asset value per share to 8.6p, up from 3p on 31 March 2021.
The board has received confirmation that the disposal of Tavistock Wealth to Titan qualifies for substantial shareholding exemption.
As a consequence, no tax charge will be incurred on receipt of the consideration of up to £40m in cash.
This is of significant benefit to the company as, without it, the transaction might have given rise to a tax charge of approximately £7m.
Net assets for the group now stand at £49.8m, compared with £15m at 31 March 2021.
Revenues were up 27% at £17m, compared with £13.4m in H1 2020.
Meanwhile, adjusted EBITDA was 13% lower than H1 2020, at £1.1m.
This was down to the one-off impact of staff salary sacrifice and government furlough support during H1 2020, and disposal of Tavistock Wealth.
Revenues from the firm’s advisory business jumped 37% to £14.7m. They are expected to exceed total group revenue for the full financial year 2020.
Raven said: “In addition, our advisory business continues to perform strongly and is already on track to deliver revenues ahead of the entire group revenues 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.”