TEAM plc (LON:TEAM), the wealth, asset management and complementary financial services group, has announced its final audited results for the year to 30 September 2024.
Financial Highlights
· Revenues increased to £10.3m (FY 23: £5.3m)
· Adjusted EBITDA loss of £1.6m (FY 23: £0.7m)
· Total client assets up 39% to £1.16bn (FY 23: £834m)
· £1.7m cash in bank as at 30 September 2024
· Post year-end the Company has raised an additional £2.36m through debt and equity raisings
Operational Highlights
· The business now organised into three divisions:
o Investment Management – AUM £325m (203: £289m)
o Advisory – AUA £355m (2023: £369m)
o International – AUA £481m (2023: £180m)
· Investment Management had a strong year, achieving a 39% increase in income, driven by significant capital inflows from both Advisory and direct clients into the division’s strongly performing Model Portfolio Service (“MPS”).
· The reorganisation of the Advisory division led to a reduction in comparable revenues during the period but this has laid the foundation for future growth, including the launch of a new advisory business in Guernsey
· The International division experienced significant expansion, driven by a full year of contributions from the Globaleye business, nine months from the Neba businesses, and the growing self-employed adviser team. With all businesses in the division now operating under the Neba brand, it is poised to be the primary growth engine for the Group.
Outlook
· The outlook for the current financial year is strong, with planned new fund launches, increased inflows, and an accelerated migration of client assets to MPS.
· The Group’s UCIT product launch, which will enable International clients to more easily access the MPS is expected to launch in the Spring.
· Advisory business has had a strong start to the financial year, adding new personnel, new clients and establishing a new office in Guernsey
· TEAM International aggressively growing adviser network across specific regions and targeting 12 new senior hires in the current financial year
Commenting on the results Mark Clubb, Executive Chairman of TEAM, said:
“We are concentrating our international efforts on the financial advisory markets where growth is strongest, specifically the Middle East, Southeast Asia, and Africa. Our business model is centered on recruiting talented advisers and providing them with the support they need to thrive, from robust compliance to a diverse product range and a competitive commission structure. The divisional management team is highly incentivised to drive expansion. And TEAM plc will benefit from the widespread distribution of our funds and investment management services, without the heavy costs typically associated with traditional fund distribution in competitive markets. It’s a proven model that we believe will fuel our future growth.”
Executive Chairman’s Statement
Last year, I wrote about our “Path to Progress” and looked forward to delivering “Further Progress.” We have done just that over the 12-month period.
Revenues nearly doubled to £10.3 million driven by our international businesses. Total client assets have increased 39% to £1,160 million.
The investment management business’s revenues grew by 39% as clients continued to invest in our market competitive MPS range.
UCITS & Investment Strategy
Our core investment philosophy emphasizes diversification across asset classes, regions, and styles.
We look to deliver steady consistent above average returns that align with our mainly retail clients’ objectives. All set within a suitable and appropriate risk profile.
Our active, systematic investment approach continues to deliver for clients.
See below 2024 returns.
| Sterling model | Dollar model | Euro model | |
| Conservative | 8.94% | 8.51% | 12.95% |
| Diversified income | 2.72% | 6.91% | |
| Balanced | 9.76% | 9.05% | 14.26% |
| Growth | 10.94% | 9.69% | 15.60% |
| Equity | 15.62% | 13.67% | 20.15% |
By H2 of this financial year, our models will be unitised under a Dublin “ManCo” provided by EPIC Fund Services. The launch of the TEAM UCITS fund range will enhance client protection and outcomes through clear investment guidelines, strong risk management, and transparency.
These funds will significantly broaden our global opportunity set, delivering consistent performance based on our best ideas and extensive market expertise. And all at extremely competitive fees to investors.
Epic Fund Services are already registered on most of the platforms our advisers use for their clients. Including international. This will hasten availability and fund flows.
Outside our MPS proposition, TEAM Asset Management started the year with something of a flurry. In November we received an additional £11.4 million in two segregated fixed income mandates.
Financial Momentum & Fundraising Success
My report would not be complete without referencing the share price.
At the beginning of April, the price was 22p, touching a low of 10p in December.
Strategic Ventures Private Europe (‘SVPE’) reduced its stake from 20.7% (6.2m shares) in January 2024 to 8.9% (3.5m shares), selling 2.7m shares. The good news: SVPE fully exited with Salus Alpha, a Liechtenstein-regulated firm, acquiring the shares in November 2024.
With the “overhang” cleared, and a steadier share price this strengthened our position to raise the required funds.
Post period in December 2024, we successfully completed a Placing and Subscription, along with the WRAP Retail Offer, raising gross proceeds of approximately £1.1 million and welcoming new shareholder Salus Alpha. But the bulk came from our long-standing shareholders, from the institutional to the smallest private individual. Wonderful support so gratefully received.
Harwood Capital Management LLP subscribed £250,000 into the existing Convertible Loan Note at a revised conversion price of 15p (previously 25p). Again, their continued support is highly valued and appreciated.
We also announced a £1 million unsecured B Convertible Loan Note (“B” CLN) issuance to NFG Capital Limited, with an 8% annual interest rate and a three-year term. Drawable in tranches of £250,000. We have drawn the first £250,000.
NFG specializes in private equity and structured finance investments across sectors such as insurance, financial services, energy, infrastructure, and real estate. They have a strategic international presence, operating in North America, Europe, Africa, and the Middle East.
I look forward to further joint strategic initiatives with NFG.
Lastly, and most recently, we are today introducing two new strategic investors, VT EPIC MA Growth Fund and VT EPIC Wealth Fund by issue of 5,686,750 of the new Ordinary Shares at 10p, raising £0.57 million.
This builds on the 2.36 million we have raised since the year-end further strengthening our business, providing the capital needed to drive growth, and enhancing our capabilities. With the availability of £750,000 to be drawn from the NFG “B” CLN.
As our CFO writes, “the cash position of the business looks the healthiest it has been.”
Cost Efficiency & Financial Outlook
While raising these funds I have being giving some thought to other matters. TEAM Plc remains loss making and we are actively reviewing costs.
We have already begun this year with circa £200,000 of group costs removed.
Each MD has been asked to review the costs. I believe they will identify savings.
However, the best solution to profitability remains revenue growth, particularly in investment management. UCITS funds will be a key driver, converting advised assets into managed assets.
While we have yet to reach the “gliding” point of cash positivity, we are closing in on “escape velocity,” with accelerating momentum as we scale and become more cost efficient.
Growth & Expansion
Regarding our Channel Islands “Financial Advice” companies, Concentric and JCap, we have successfully launched our operations in Guernsey, with the year starting encouragingly.
Concentric also is now recognized as a CISI Chartered Firm-one of only two in Jersey.
Three new senior and experienced Jersey Wealth Consultants started 1st January 2025.
Both Concentric Consulting and treasury management team, JCap, have seen good starts to the year. Both securing new long term contracts providing risk analysis and reporting.
Internationally, our presence spans Singapore, Kuala Lumpur, Abu Dhabi, Dubai, Durban, and Nairobi.
TEAM International, managed by John Beverly, is aggressively expanding its adviser network in these regions. Our ambition extends further, to include Europe (MiFID II) in the near future. Further unlocking new client and recruitment opportunities.
I fully expect 12 additional International Advisers to join by the September year end all with self-sustaining client bases.
Final Thoughts
To our colleagues, thank you. My role is to ensure you have the resources and training to showcase your excellence to clients and peers.
To our clients, thank you for your trust and support.
To our shareholders, thank you. Your patience will be rewarded as we deliver substantial shareholder value growth. “Escape Velocity” is within reach.
I am a substantial shareholder and have never been more excited or passionate about our business. I will continue to support TEAM shares.
Mr J M Clubb
Executive Chair
28 February 2025
Performance and Strategic Report
Introduction
The Directors present their Strategic Report on the Group for the year ended 30 September 2024.
Overview
The Directors’ aim is to provide long term capital appreciation for Shareholders by building a profitable and sustainable business. Growth will be sought through winning new clients and targeted acquisitions, underpinned by investment in the support infrastructure.
The overall strategy is to promote the continued development of the Group into a leading international wealth and asset management business. It is expected that the Group’s growth will be achieved through:
· an acquisition driven strategy to bring into the Group complementary offshore and onshore wealth management and financial planning businesses;
· a focus on delivering revenue and cost synergies, leveraging our increasing scale and breadth of services to gain a greater share of client wallet and economies of scale for clients and the Group;
· identifying and delivering complementary services such as specialist funds, cash management, and corporate services;
· the expansion into complementary locations – onshore UK, Crown Dependencies, other International Finance Centres, and
· client growth through team and selective hires and targeted business development.
The Directors believe that the successful execution of a buy and build strategy to acquire incremental scale is likely to have the most meaningful impact on the future value of the Group. The Directors also believe that expansion in the faster growing international markets, rather than the slower growing UK and Crown Dependencies markets, will also benefit the development of the Group.
Key Performance Indicators (KPIs)
The key targets for the Directors are to:
· manage the business with a high standard of corporate governance;
· improve the operating performance of the Group to a cashflow positive position;
· integrate and deliver the cost and revenue synergies identified in the acquired businesses, specifically the use of TEAM Investment Management services by advisers throughout the Group, and
· raise sufficient financing to enable the business to trade through to an operating cashflow surplus and settle all outstanding deferred consideration and debt instruments as they fall due.
Principal risks and uncertainties
Risk appetite is established, reviewed, and monitored by the Board. The Group, through the operation of its Committee structure, considers all relevant risks and advises the Board as necessary. The Group and each operating entity maintains a comprehensive risk register as part of its risk management framework encouraging a risk-based approach to the internal controls and management of the Group.
The Group seeks to ensure that its risk management framework and control environment is continuously evolving which the Board monitors on an ongoing basis.
Liquidity and capital risk: the Group’s focus is on bringing the business to a positive cash flow position, whilst implementing its growth strategy. Before this goal is reached, the availability of sufficient liquid resources to meet the operating requirements of the business, and any deferred payments due to vendors of businesses to the Group, are closely monitored and a key element of any investment decisions taken.
Operational risk: operational risk is the risk of loss to the Group resulting from inadequate or failed internal processes, people, and systems, or from external events. Each trading entity conducts a business risk assessment to identify all risks faced, and to put in place effective mitigating controls and procedures. These are reviewed regularly.
Business continuity risk: the risk that serious damage or disruption may be caused because of a breakdown or interruption, from either internal or external sources, to the business of the Group. This risk is mitigated in part by the Group having business continuity and disaster recovery arrangements.
Credit risk: the Board takes active steps to minimise credit losses, including the close supervision of credit limits and exposures, and the proactive management of any overdue accounts. Additionally, risk assessments are performed on an ongoing basis on all deposit taking banks and custodians and our outsourced relationships.
Non-compliance with laws and regulations risk: the Group has Compliance and Operations functions resourced with appropriately qualified and experienced individuals. The Directors monitor changes and developments in the regulatory environment and ensure that sufficient resources are available for the Group to implement any required changes.
S.172 Statement
As a Jersey company, TEAM plc does not fall under the UK Companies Act 2006 (the “CA 2006”), but we do follow the requirements under section 172 CA 2006 by which the Directors have a duty to promote the success of the Company for the benefit of shareholders. In doing so, the Directors have regard to the likely consequences of any decision in the long-term; the desirability of the Company for maintaining a reputation for high standards of business conduct; and the need to act fairly between members of the Company.
The Board considers that its primary stakeholders are shareholders, employees, clients, suppliers and regulators. We set out below how we engage with our stakeholders:-
Shareholders – contact with our shareholders is through several avenues which include the Annual Report, Annual General Meeting, one-to-one meetings and telephone conversations. Matters under discussion include strategy and its execution and generating positive returns.
Employees – the Board engages with employees through a variety of methods, including regular face-to–face meetings with the management teams of the operating entities. The executive Directors are more actively engaged with staff and are known personally to the management team.
Clients – the Group through its subsidiaries aims to provide investment and advisory services that meet the needs of its clients. The Group’s subsidiary management teams update the Board on a regular basis on matters of client service and performance, and new client requirements.
Suppliers – the Company places reliance on external third-party providers for certain activities and services. The selection process and engagement with these parties is undertaken by senior management to ensure the smooth operation and delivery of services to the Company.
Regulators – two of the Company’s subsidiaries are regulated by the JFSC, and there are regulated entities operating in Guernsey, Singapore, the UAE, South Africa, and the Federal Territory of Labuan (in Malaysia). Regular ongoing communication with the regulators is maintained by the boards of the respective operating companies and regular management information is supplied as required. All Board members and key individuals of the regulated entities are approved in their roles by the respective regulators, as are the significant shareholders in TEAM plc.
The Performance and Strategic Report on pages 8-10 has been approved by the Board and signed on its behalf.
Mr M C Moore
Chief Financial and Operating Officer
28 February 2025
Financial Overview
A summary of the Group’s performance for the financial year is set out below:
| Year to | Year to | |
| 30 Sep 2024 | 30 Sep 2023 | |
| £’000 | £’000 | |
| Revenues | 10,279 | 5,323 |
| Cost of sales | (4,505) | (924) |
| Operating expenses | (8,653) | (6,474) |
| Operating loss | (2,879) | (2,075) |
| Operating loss before exceptional items | (2,815) | (1,853) |
| Exceptional items | (64) | (222) |
| Operating loss after exceptional items | (2,879) | (2,075) |
| Fair value gains on deferred consideration | 730 | 1,680 |
| Impairment of goodwill | (600) | – |
| Share award expense | 1 | (13) |
| Other income and charges | (173) | (35) |
| Loss before tax | (2,921) | (443) |
| Tax | 14 | (2) |
| Loss after tax | (2,907) | (445) |
Adjusted EBITDA, excluding exceptional items, is set out below:
| Year to | Year to | |
| 30 Sep 2024 | 30 Sep 2023 | |
| £’000 | £’000 | |
| Loss after tax | (2,907) | (445) |
| Interest | 173 | 35 |
| Tax | (14) | 2 |
| Depreciation | 168 | 171 |
| Amortisation of intangible assets | 995 | 995 |
| EBITDA | (1,585) | 758 |
| Acquisition related expenses | 64 | 222 |
| Share award expense | 1 | 13 |
| Impairment of goodwill | 600 | – |
| Fair value adjustments | (730) | (1,680) |
| Adjusted EBITDA | (1,650) | (687) |
Financial analysis
The results for the year to 30 September 2024 when compared to the prior year were as follows:
Revenues
Total revenues rose 94% to £10.3 million (FY 23: £5.3 million) with a significant increase from the contributions from the International businesses acquired in 2023 and 2024.
| Year to | Year to | |
| 30 Sep 2024 | 30 Sep 2023 | |
| £’000 | £’000 | |
| Investment Management | 1,322 | 951 |
| Advisory | 2,003 | 3,040 |
| International | 6,953 | 1,332 |
| Other | 1 | – |
| Total | 10,279 | 5,323 |
Client assets
Total client assets increased year-on-year by 39% from £834 million to £1.16 billion as at 30 September 2024. This was through the significant flow into MPS services provided by the Investment Management division from Advisory clients, material new client wins in the investment consultancy services within the Advisory division, and the inclusion of the acquired Globaleye financial planning businesses.
| InvestmentManagement | Advisory | International | Total | |
| £’m | £’m | £’m | £’m | |
| As at 30 Sept 2023 | 289 | 365 | 180 | 834 |
| Net Inflows | 11 | (18) | 216 | 209 |
| Other including market performance | 25 | 8 | n/a | 33 |
| From acquired businesses | – | – | 84 | 84 |
| Total AUM/A at 30 Sept 2024 | 325 | 355 | 480 | 1,160 |
Investment Management
Investment Management saw a 39% increase in income as clients continued to invest in the model portfolio services. Investment Management AUM as at 30 September 2024 rose to £325 million (30 September 2023: £289 million), a 12% increase on last year.
We continue to benefit from the flow of client assets into the model portfolio service. By 30 September 2024 the assets managed with the models were up to £102 million, from £70 million at the start of the year. We continue to attract advice clients into the models from the wider TEAM group, and increasingly direct clients are adopting the models as they see the merits of our systematic active investment process via the model, run on all the investment platforms we work with.
Investment performance continues to be a great selling point for our investment services, returning above our peers, with the flagship multi-asset range of solutions delivering steady risk-adjusted returns over the prior twelve months amidst volatile market conditions.
The launch of the unitised version of the model portfolios has been slower to implement that originally expected, and we now expect these funds to be available to clients in Spring 2025. We expect to see the clients of the International division become the biggest acquirors of these funds and drive significant new revenues in the division.
Advisory
Overall Advisory reported revenues of £2.0 million (FY 23: £3.0 million), a 33% difference, primarily due to a one-off legal settlement paid to the Treasury Service business for £0.7m in FY 23, and the full year impact of transferring investment management services from some clients to our Investment Management division.
Excluding these one-off factors, business levels improved from the previous year as the interest rate cycle moved into a period of falling rates, and the rate of inflation has dropped back to more long-term levels. Client assets in the period moved from £365m to £355m and since the New Year a team of highly productive advisers joined the team and we expect a material uplift in client assets to follow.
In FY 24 we launched an advisory business in Guernsey, a logical geographical expansion, which has now been licensed and has begun trading. Revenues are now coming through and we are positive on the prospects for the business to both contribute to our cash flow and to win new clients to TEAM Investment Management.
The historic regulatory issues with one of our acquired entities have now been cleared with no financial penalties. The Advice division has completed its’ rebrand as the Concentric Group, with three divisions: Wealth for personal financial advice, Consultancy for investment review and assessment, and Treasury Services for cash yield and risk management services. All are now located in one office in St Helier.
The Treasury Service business has enjoyed a more positive market, with the increase in the returns on cash making the asset class of more interest to investors. Building on this momentum, additional services have been developed to offer current clients, and while a return to the historic levels of revenue is some way away, the Treasury Service business has remained profitable.
International
The international business comprises of the acquired entities outside of the Channel Islands. International generated revenues for the year to September 2024 of £7.0m, after £1.3 million for four months of FY 23, with an increase seen in the level of business written by the expanded self-employed adviser team, along with the contribution from a full year of trading from the Globaleye acquisition, and nine months of contribution from the acquired Neba businesses.
The necessary restructuring of the division is complete, with all activities united under the Neba brand. The market for international financial advisory services in the Middle East, SE Asia and Africa remains strong, with a significantly higher growth rate expected when compared to the UK and Europe.
The division’s business model is to recruit effective advisers, support them with our compliance, marketing and business development resources, provide them with access to the right investment and savings products for clients, and have a market norm commission share arrangement with the advisers. The management team is incentivised with a significant profit pool based on the earning of the division. TEAM plc benefits from extensive distribution of our funds and investment management services, without the heavy cost burden of fund distribution into competitive marketplaces. With the completion of the rebrand, and the launch of the TEAM funds, we expect the contribution from the division to be the main driver of profit growth for the Group.
Expenses
Total expenses rose by 73% to £13.2 million (FY 23: £7.6 million) with the inclusion of the two new International businesses (NEBA) in the year and the first full year of the Globaleye businesses (2023: 4 months).
| Year to | Year to | |
| 30 Sep 2024 | 30 Sep 2023 | |
| £’000 | £’000 | |
| Cost of sales | 4,505 | 924 |
| Staff costs | 4,333 | 3,359 |
| Non-staff costs | 4,384 | 3,337 |
| Adjusted total costs | 13,222 | 7,620 |
| Acquisition related expenses | (64) | (222) |
| Total | 13,158 | 7,398 |
As at 30 September 2024, the total staff in TEAM was 71, down from 87 at 30 September 2023, while staff costs were up 30% to £4.3 million (FY 23: £3.3 million).The change in headcount is primarily from a reduction in International and staff costs remained high in FY 24 but now align with the ongoing size of the team.
Cost of sales were 387% higher at £4.5 million (FY 23: £0.9 million), a result of the commissions paid to the self-employed advisors in Globaleye and NEBA, which is a feature of the operating model for that business.
Non-staff costs were up 31% at £4.4 million (30 September 2023 £3.3 million), reflecting the full year contributions from Advisory, high inflation in services seen in Jersey, and the costs from Globaleye.
Total costs in the Advice division were flat at £2.1m as costs savings in Jersey were offset by new costs in Guernsey, for Investment Management costs were up marginally at £1.8m (FY 23 £1.7m) as inflationary increases in supplier costs kicked in, while PLC costs fell from £0.9m to £0.8m as costs were actively cut.
Further costs cutting steps, especially in PLC, have already been taken and will be seen in the FY 25 outcome.
Adjustments to EBITDA
Acquisition related expenses were £64k (FY 23: £222k) and included the legal, regulatory and financial advice fees relating to the acquisition of NEBA.
Share award expenses were £1k (30 September 2023: £13k) and reflect the cost of equity to be issued to the executive directors which vested during the period.
Fair value adjustments were a gain of £730k (30 September 2023: £1,680k), being the reduction in the consideration payable to vending shareholders of certain acquired subsidiaries (see note 15).
Impairment of goodwill was £600k (30 September 2023: £nil) reflecting the loss of a material client in the Treasury Service division in FY 24.
Profit/Loss
The adjusted EBITDA was a loss of £1.7 million (FY 23: loss £0.7 million), a 141% increase. The most material change comes from a £1.0m decrease in contribution from Advice following the one-off settlement received in FY 23 (£0.7m), first time spend on setting up the Guernsey business (£0.2m) and a £0.4m reduction from Jersey Advice following the transfer of investment clients to the Investment Management division, which showed a corresponding increase in contribution.
Tax
Regulated financial services businesses in Jersey pay a flat corporation tax rate of 10%. The Treasury Services business is not regulated and has a nil tax rate. The Globaleye entities are subject to tax rates of 17% (Singapore), 3% (Labuan), between 7 and 27%% (South Africa), and 0% (UAE and BVI). The reduction in the tax recovery in the year reflects the group relief now available for current period losses from the Investment Management division to the Advisory division. The deferred tax asset of £168k (FY 23: £152k) is expected to be utilised against the future profits generated in the Investment Management Division.
Earnings/Loss per share
The headline loss per share increased to 8.6p from 2.0p. The adjusted loss per share increased 58% to 4.9p from 3.1p.
Cash Flows
Cash as at 30 September 2024 decreased to £1.7 million (30 September 2023: £1.9 million) as operating losses of £2.9 million (FY 23: £0.4 million) were incurred, cash balances of £0.25 million were acquired in NEBA (FY 23: £0.9 million for Globaleye), and further loan notes of £1.3 million were issued. There were no deferred cash payments made in the period relating to acquisitions (FY 23: £20k).
Statement of Financial Position
Net assets increased by 21% to £9.9 million (FY 23: £8.2 million), following the acquisition of the Neba companies and the issue of new shares of £4.6 million (FY 23: £nil) less the £2.9 million of losses (FY 23: £0.4 million).
Going concern
The Directors have prepared financial projections along with sensitivity analyses of reasonably plausible alternative outcomes, covering clients and assets, cost inflation, the take up of Group services and the potential acquisition of further businesses. Additional funding for the Group, both from existing shareholders and new investors has also been secured after the period end, with a successful equity raise completed in December 2024, further loan financing secured, a new strategic equity investor and further equity investment anticipated from new investors.
Taken together, the expected improvement in trading, the settlement of deferred consideration, the new debt and equity finance raised and the plans to mitigate the cost across the Group, gives the Board sufficient confidence to consider the going concern basis to be appropriate for the accounts.
Dividends
The Board does not propose to pay a dividend in respect of the financial year ended 30 September 2024 (FY 23: £nil).
Mr M C Moore
CFO and COO
28 February 2025
