Tavistock Investments is looking at “several” acquisitions after its cash reserves were recently bolstered.
In the company’s interim results today (December 20) it outlined how the sale of its investment management business and a £20mn facility offered by Bank of Ireland has allowed it to explore potential purchases.
Tavistock said the earnings lost as a result of selling part of the business will be replaced by an “acquisition strategy”, and chief executive Brian Raven said the company is “well placed” to pursue purchases.
“The company is currently engaged in discussions with several well qualified acquisition targets, which it is well positioned to pursue,” he said.
Tavistock also highlighted how it is moving away from less profitable areas of activity.
For instance its Reserved Alternative Investment Fund, listed on the Luxembourg Stock Exchange, has been closed after “market sentiment and hostile economic conditions” meant it did not get enough investment.
In the results, Tavistock posted a 16 per cent jump in revenue compared with the same period last year, rising to £17mn.
However, the company swung to a £805,000 pre-tax loss in the period, after the cost of sales increased.
This is in comparison to a £35mn pre-tax profit in the same period last year, boosted by the sale of Titan.
Reorganisation
The group’s investment management business was sold to Titan Wealth in August last year, in a deal worth £40mn which included a strategic partnership between Tavistock Investments and Titan Wealth.
Then, in the same month, the group bought a 21 per cent holding in LEBC Holdings, an independent financial advisory group with three wholly owned subsidiaries.
One of these, Hummingbird, which Tavistock bought in May, was purchased mainly to provide LEBC with additional working capital.
Tavistock announced earlier this month that LEBC had found an alternative source of working capital and therefore it agreed to sell Hummingbird back to Aspira.
Swinging profits
Tavistock itself has seen inconsistent profits since March 2018.
That year, it made a pre-tax profit of £221,000, compared to a pre-tax loss of £1.2mn the previous year.
That same year it sold its network business, Tavistock Financial, to Sanlam.
In 2019 it made a loss of £118,000, which deepened to £5.5mn by March 2020.
sally.hickey@ft.com
