10 January 2023

TEAM plc

(" TEAM " or the " Company ")

Final Results

 

TEAM plc (AIM: TEAM), the wealth, asset management and complementary financial services group, announces its final results for the year to 30 September 2022.

Financial Highlights

·    Revenues increased 44% to £2.1 m (FY 21: £1.5m)

·    Adjusted EBITDA a loss of £0.8m (FY 21: £0.8m)

·    Net assets increased by 15% to £8.6 million (FY21: £7.4 million)

·    Group assets under management / advice up 94% at £575m (FY 21: £297m)

·    Annualized revenue run rate of £3.7m, as at 30 September 2022

 

Operational Highlights

·    Increased headcount to 33 up from 16 at the outset of the year

·    Completion of strategic acquisitions, now full set of capabilities in Jersey

·    Starting to realising cost and revenue synergies

·    Recurring asset inflows improved, while markets and outflows not expected to recur

·    Good pipeline of acquisition opportunities

 

Commenting on the results Mark Clubb, Executive Chairman of TEAM, said:

"Our ambition remains to become a leading wealth and asset management business and these results reflect good progress towards this aim. In May we raised a further £2.7m to fund acquisitions and working capital. We have completed the acquisitions of Omega and Concentric both of which have bedded down well and our annualised revenues are now up to £3.7m. We have established a good base in Jersey and have an excellent pipeline of opportunities ahead of us as we enter 2023. We look forward to further developing our business in the coming year."

 For further information, please contact:

Team plc		Tel: +44 (0) 1534 877210
Mark Clubb / Matthew Moore
Shore Capital (Nominated Advisor & Broker)		Tel: +44 20 7408 4090
Tom Griffiths / Iain Sexton (Corporate Advisory) Guy Wiehahn (Corporate Broking)
Hannam & Partners (Financial Advisor to TEAM)		Tel: +44 20 7907 8500
Giles Fitzpatrick / Ernest Bell / Richard Clarke
Novella Communications (Financial PR)		Tel: +44 20 3151 7008
Tim Robertson / Safia Colebrook		team@novella-comms.com

About TEAM plc

 

TEAM plc is building a new wealth, asset management and complementary financial services group. With a focus on the UK, Crown Dependencies and International Finance Centres, the strategy is to build local businesses of scale around TEAM plc's core skill of providing investment management services. Growth will be achieved via targeted and opportunistic acquisitions, team and individual hires, collaboration with suitable partners, and by organic growth and expansion.

TEAM plc has three principal activities, Investment and Fund Management, Treasury Services and Financial Advice.

Investment and Fund Management provides discretionary investment management services, model portfolios, bespoke portfolios and fund management services via fixed income and equity fund vehicles. Total assets managed as at 30 September 2022 were £249m (FY21: £297m).

Treasury Services focused on improving the return and mitigating the risks associated with the management of cash for institutions, professional advisers, trustees and high net worth individuals.

Financial advice - primarily for individuals resident in Jersey, and investment consultancy services to wealthy individuals and trusts.

The Group's income is predominantly derived from activities conducted in Jersey, Channel Islands, with a number of retail, high net worth, family office, sovereign, institutional and corporate clients.

At the year end, the Group had 33 staff (FY21: 16), with 1 in the UK and 32 in Jersey (FY21: 1 and 15 respectively).

 

  

Executive Chairman's Statement

 

Progress

I am pleased to present the second set of full year results of TEAM plc (the "Company") as a public quoted company.  At the time of admission to trading on AIM in March 2021, we set out our ambition to become a leading wealth and asset management business. I am delighted to confirm that we continue to make significant progress towards this goal in spite of the market turbulence seen this year.

Savers and investors alike have been confronted with higher inflation and higher interest rates, coupled with geopolitical and domestic tensions. Our investment process, which is based on a systematic approach, diversification and active management, has demonstrated its value as we navigate these challenging markets and we are proud of our investor returns in the year. It is testament to the expertise and discipline of our Investment Committee, headed by Jason Jones, but more specifically, Craig Farley, our Head of Multi Assets. 

Results

Our financial results reflect the contribution made to the business from the first full year's consolidation of JCAP as well as two months of contributions from Omega and Concentric. Group assets under management/advice for the year were up 94% from £297 million to £575 million. Results also mirror a period of sustained market turbulence which led to some net asset outflows. Group revenues increased by 44% from £1.5 million to £2.1 million and adjusted EBITDA, our preferred measure of profitability, was unchanged at a loss of £0.8 million, as contributions from acquisitions were offset by a decline in revenues in investment management. Net assets increased by 15% to £8.6 million (FY21: £7.4 million) and we are well placed to continue with our growth plans.

Investment and Fund Management

In 2022, our investment management business launched its model portfolio service across four platforms (Morningstar, 7IM, Quilter International and Novia Global). The investment track record continues to build with our multi-asset portfolios outperforming the MPI peer group across all four strategies. 

This strong relative performance reflects the dedicated research efforts undertaken by the investment team during the first half of 2021 to overhaul TEAM's investment philosophy and framework. Central to the process is that the financial market landscape during the next twenty-five years is highly unlikely to resemble that of the past twenty-five years which was an extraordinary period of history, defined by little-to-no inflation, zero interest rates, globalisation, and expanding central bank balance sheets. This is now behind us, with profound consequences for asset allocation. TEAM has responded by expanding our allocation menu to provide more sources of capital growth and income for our clients, whilst always seeking out genuine diversification. We have side-stepped a lot of volatility and downside this year by holding: -

a) Far less equity risk than our peers;

b) Zero conventional sovereign and investment grade bonds until Q4 2022 (until that point they represented 'return-free risk');

c) Consistent exposure to energy commodities, the standout sector of 2022; and

d) Healthy levels of cash, which has re-emerged as a strategic asset class after years in the wilderness.

Whilst TEAM Asset Management remains loss making, the path to break even is clear. Additional fee revenue will not require significant increases in costs. I am confident, given the investment performance and more focused and resourced business development, that we can achieve this. A Group Revenue committee has been established and we are encouraged by the asset flows coming from new and existing IFA clients.

With our entrepreneurial culture, we expect to continue to attract relationship managers as well as to identify further acquisition opportunities. The business is well placed to scale as it benefits from building its performance track record and attracts new clients and talent.  We look forward to better opportunities ahead in 2023.

Treasury Services

JCAP, our Treasury Services business, has benefited from increased focus on cash advisory services as interest rates have increased. The Bank of England raised interest rates 9 times since December 2021 and the base rate now stands at 3.5%. It is forecast to increase further and rates are expected to remain elevated in the UK, Eurozone and US into 2024.

We continue to extend our client base into the institutional and particularly Jersey trust market and have identified a number of significant opportunities, all helped by the "tailwind" of higher interest rates.

Financial Advice and Consultancy

Concentric and Omega are significantly integrated into the Group as we had been working closely with the respective teams and jointly planning projects as we awaited regulatory approvals.  Much of the work to identify revenue and costs synergies, improve controls and improve client outcomes within these businesses has been started.  There are clear revenue synergies and clients will be able to benefit from group investment management services. We anticipate that recruitment to meet both client demand and succession planning will be one of the biggest challenges that we need to address. However, we think that the entrepreneurial business environment we offer will be appealing to experienced practitioners and experienced staff have already been brought into the business.

Acquisitions

Part of our growth strategy is to identify both targeted and opportunistic acquisitions to enhance the range and quality of services that we offer. In August 2022, we were able to complete the acquisition of Omega, a Jersey-based IFA specialising in retirement planning, mortgage advice, life assurance and bespoke investment advisory services for a headline consideration of £4 million. Somewhat frustrating was the time it took to receive regulatory approval which impacted the Group's financial results for the year ended 30 September 2022. We are working through a remediation exercise over certain historic control and management matters identified by the Jersey Financial Services Commission ("JFSC"). Against this, Omega has continued to deliver strong financial results, but unfortunately we were only able to include two months' trading in these results.

In the same month, we completed the acquisition of Concentric, a Jersey based financial planning and investment consultancy business focused on higher net-worth individuals both in Jersey and internationally. It is a very well managed business with strong processes and procedures, particularly regarding compliance, which will be used to strengthen the operating models of Omega and potentially other advisory businesses that we may acquire internationally.

ESG

Turning to ESG, our growing collaboration with BlackRock, a globally recognised analytics and reporting provider, has been very well received by existing and potential clients. BlackRock gives TEAM point-in-time analytics and reporting capabilities for our investment models. In addition to stand alone risk reporting and scenario analysis that seeks to measure the potential impact of disruptive events on our models, a key feature is our ability to extract an overall ESG score for each model, in addition to standalone 'E', 'S', and 'G' scores. For clients with specific ESG preferences or needs that may deviate slightly from TEAM's core investment model offering, we can build tailored solutions and provide an external reporting capability to ensure expectations are being met.

TEAM Plc is a Jersey based company and we look to contribute to our community in a meaningful manner. This year we again supported the Jersey Action Against Rape fundraising competition, and the "Borrow a Bucket" initiative showing Jersey as an environmentally friendly destination that also has "Impact" initiatives.

Ambition

TEAM is building a new wealth, asset management and complementary financial services group. With a focus on the UK, Crown Dependencies and International Finance Centres, our strategy is to build local businesses of scale around our core skill of providing investment management services. In May 2022, we raised £2.7m from new and existing shareholders to fund acquisitions and working capital. The acquisitions of Omega and Concentric have enhanced our range of products and broadened our financial advice services increasing the scale of our addressable market. We will continue to look to grow our adviser presence organically by recruitment and via acquisition.  We have been and are actively engaged in many conversations. The Group continues to aim for its target of completing two acquisitions per financial year, of increasing scale, and I am confident that this will be achieved.

I believe that we have a settled, experienced management team with depth, and are at the beginning of our "path to progress." I very much look forward to making further progress in the coming year while remaining mindful of the continuing macro-economic turbulence and market volatility. I remain confident in the Group's longer-term prospects and the value we are building.

Looking forward

Since our IPO, and in keeping with the commitments that we made at that time, we have taken every opportunity to develop and grow our business to enhance our services for clients.

We will continue to seek opportunities to enable us to work towards our goal to become a leading wealth and asset management business both in Jersey as well as internationally. We have deep experience as a management team on integrating acquisitions and identifying ways to enhance revenue growth across the Group. Our ethos is entrepreneurial  - our team is energetic and excited by the potential of being involved at the inception of a fast-growing  future leader in the sector.  I would like to thank the team for their commitment and hard work over the period and look forward to continued collaboration and success.

We expect to bring potential acquisitions to enhance TEAM and deliver the business plan to our shareholders, and further equity funding will be required to complete these transactions, and to fund the expected working capital requirements we forecast in the coming 12 months. 

We look to build resilience, be courageous in our ambitions, establish new clients and business lines, continue to grow and improve our technology resources in a fast-moving world, and lastly develop, and grow our existing and new potential colleagues. Staff retention is about providing opportunity and support. We look to offer fulfilling careers across a diverse range of candidates and roles.

I very much look forward to the coming year while remaining mindful of the continuing macro-economic turbulence and market volatility. I remain confident in the Group's longer-term prospects and the value we are building. This confidence has been, and will continue to be, evidenced by my ongoing purchase of TEAM Plc shares.

 

 

 

Mr J M Clubb

Executive Chair

9 January 2023

  

 

Performance and Strategic Report

 

Introduction

The Directors present their Strategic Report on the Group for the year ended 30 September 2022.

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 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 and asset management 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 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

·    AUM 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 believe that there are a number of asset managers who are significantly underperforming due to a variety of factors, including poor management, poor investment performance, increased regulatory and technology requirements, lack of capital and strategic vision.

Key Performance Indicators (KPIs)

As TEAM is in the initial stages of delivering the strategic plan for the business, the Board has yet to set longer term measures for the assessment of the performance of the business.

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;

·    build the business to scale within Jersey, which we define as AUM of over £500m and an operating surplus;

·    integrate and deliver the cost and revenue synergies identified in the acquired businesses, and

·    build and convert our pipeline of acquisition opportunities. This will enable the Directors to reapproach the shareholder base and potential investors for further funding to continue the Group's inorganic growth plans. A necessary part of further acquisitions will be raising additional financing, which is expected to be required for any further acquisitions to be made by the Group.

These measures, along with revenue, cost and profitability measures, will be developed into longer term KPIs for the business, to which future Board remuneration will be aligned.

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 as a result 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 as a whole. 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 as between members of the Company.

 

In this context, the Company is proposing to seek new revenue opportunities in developing an asset and wealth management business. 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 a number of 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 strong 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 the relatively small number of staff, all of whom (bar the CFO) live and work on Jersey, and are known personally to the management team.

 

Clients - the Company through its subsidiaries aims to provide investment products and advisory services that meet the needs of its clients. The Company'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 - three of the Company's subsidiaries are regulated by the JFSC. Regular ongoing communication with the JFSC 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 JFSC.

 

The Performance and Strategic Report on pages 9 - 11 has been approved by the Board and signed on its behalf.

 

 

 

Mr M C Moore

CFO and COO

9 January 2023

 

 

 

 

Financial Overview

 

A summary of the Group's performance for the financial year is set out below:

	Year to	Year to
	30 Sep 2022	30 Sep 2021
	£'000	£'000
Revenues	2,120	1,469
Cost of sales	(414)	(267)
Operating expenses	(3,271)	(2,994)
Operating loss	(1,565)	(1,742)
Operating loss before exceptional items	(1,436)	(1,052)
Exceptional items	(129)	(690)
Operating loss after exceptional item	(1,565)	(1,742)
Other income and charges	(23)	(9)
Loss before tax	(1,588)	(1,751)
Tax	64	45
Loss after tax	(1,524)	(1,706)

 

Adjusted EBITDA, excluding exceptional items, is set out below:

	Year to	Year to
	30 Sep 2022	30 Sep 2021
	£'000	£'000
Loss after tax	(1,524)	(1,706)
Interest	23	9
Tax	(64)	(45)
Depreciation	81	60
Amortisation of intangible assets	543	104
EBITDA	(941)	(1,488)
IPO related expenses*	-	449
Acquisition related expenses**	129	241
Adjusted EBITDA	(812)	(798)

 

Notes:

*On 8 March 2021 TEAM plc shares were admitted to trading on AIM, costs relating to this exercise are treated as exceptional.

** These are third party charges relating to the acquisitions of Omega and Concentric in 2022 and Theta, JCAP and Omega and the potential offer for Tavistock plc in 2021.

 

 

 

Financial analysis

The results for the year to 30 September 2022 when compared to the prior year are as follows:

 

Revenues

Total revenues rose 44% to £2.1m (FY 21: £1.5m) with a significant increase from the first full year of contribution from JCAP and two months' contributions from Omega and Concentric. Team's run rate revenue (the annualised revenues the Group would report if the AUM and fee rates remained static at the level shown at 30 September 2022) was £3.7m (FY 21: £2.0m), with a run rate revenue margin of 0.58% (the ratio of annualised revenues excluding Treasury Services to client assets) (FY 21: 0.44%).

Investment and fund management revenues decreased from £1.3m to £1.0m due to lower market values and net outflows principally due to the loss of one large mandate.

Treasury services revenues in 2022 were £0.8m (FY 21: £0.2m for three months only), which on an annualised basis was down from the £1.0m recorded in the 12 months to 30 September 2021. This reduction arose as one-off project fees and brokerage fees received from a partner bank in 2021 did not recur in FY 2022.  Additionally, JCAP has raised a claim with a client for non-payment of fees, which is expected to be successful, but until this is settled it is not accruing for fees due. 

The two financial advice and consultancy businesses (Omega Financial Services (Jersey) and Concentric Group Limited) were acquired in August 2022 and the revenues of £0.3m (FY21: nil) reflect only two months of income. New business activity was lower than that recorded in previous years by the acquired businesses, reflecting that it was the quieter summer months that were consolidated in Team's audited final results for the year ended 30 September 2022, and that new client activity was low against a background of negative economic and political news.

 

	Year to	Year to
	30 Sep 2022	30 Sep 2021
	£'000	£'000
Investment and Fund Management	1,025	1,283
Financial advice and consultancy	305	-
Treasury services	789	180
Other	1	6
Total	2,120	1,469

 

Client assets

Total client assets increased year-on-year by 94% from £297m to £575m as at 30 September 2022. This was primarily through the inclusion of the two acquired financial advice businesses.

	Investment management	Fund management	Financial advice & consultancy	Total
	£'m	£'m	£'m	£'m
As at 30 Sept 2021	202	94	-	297
Inflows	41	32	-	73
Outflows	(75)	(14)	-	(89)
From acquired businesses	-	0	326	326
Other including market performance	(18)	(14)	-	(32)
Total AUM at 30 Sept 2022	151	98	326	575

Investment management

Fees and commission are earned from investment management services for individuals, trusts, sovereign agencies and corporations. The majority of investment management clients are managed on the Pershing CI platform, with some historic relationships with other third party custodians.

Growth in this division will come from attracting new clients from intermediaries, both from TEAM group companies and external gatekeepers, primarily trustees and third-party financial advisers, and from referrals from existing clients. We also expect to continue to recruit relationship managers with existing client relationships and execute further corporate acquisitions of suitable investment management businesses on Jersey and onshore.

The total Investment Management AUM as at 30 September 2022 was £151m (FY21: £202m), a 25% decrease on the year, of which 9% was asset price related, and the balance from client outflows.

The change in AUM reflected the departure of one client with £40m under management, albeit at a low fee.  Client wins of £41m (20% of the opening balance) were pleasing, and a significant increase on FY 2021 (£12m) with increased traction in the larger pools of capital within the Jersey market and with overseas financial advisers.

During the year, we launched our model portfolio services on three retail platforms, and now manage clients' investments via our models on each of these. We have started to see a flow of client assets from our advisory businesses into TEAM models, helped by the increased availability of the portfolios and the strong performance of the models, especially against the peer group. As at 30 September 2022, assets advised and managed within the Group totalled £3m.

Fund management

TEAM manages a range of Liechtenstein domiciled corporate bond funds (the Keox funds), the TEAM International Equity Fund (TIEF), which is a Dublin domiciled UCITS, and the Diversified Multi Asset Income Fund, a Liechtenstein domiciled unitised version of our income model portfolio (DMAIF) that was launched this year. These are managed by the same investment team who manage the investment clients' portfolios.

The FUM of the Keox funds, fell from £90m at 30 September 2021 to £80m at the year end, despite attracting gross inflows of £16m, and a net inflow of more than £2m.  The fall in value reflects the difficult year for the asset class which was negatively impacted by higher inflation and interest rates. The share price of the main KEOX ESG Bonds fund declined by 14%, outperforming both its benchmark and the majority of its peer group over the year. The relative outperformance reflects the more defensive duration stance of the fund at a time when bond yields rose sharply.

TIEF was launched in May 2021 and is a long-only global equity fund, managed by Mark Clubb. the Company's Executive Chair. FUM grew to £5m as at 30 September 2022 from £4m as at 30 September 2021, an increase of 35%. The share price of the fund declined by 8%, versus a benchmark fall of 3%, during the 12 months, but outperformed the majority of its global large-cap equity fund peer group. The fund manager's active, high conviction style aims to outperform over the medium-term and does not seek to track a benchmark.

The Diversified Multi Asset Income fund was launched in July 2022 to give a unitised version of our model portfolio, which better suits some clients' requirements. FUM was £12m as at 30 September 2022 (FY 21: nil).

TEAM does not charge fund management fees where investment clients hold funds managed by TEAM.

Financial advice & consultancy

The financial advice and investment consultancy businesses were acquired in August 2022, and client assets recorded only at the quarter end, so the £326m of client assets are reported as acquired. In future years, we will be able to report on inflows and outflows and market effects.

Expenses

Total expenses rose by 13% to £3.6m (FY 21: £3.2m) with the inclusion of JCAP for a full year (three months in 2021) and Omega and Concentric for two months (nil for 2021).

	Year to	Year to
	30 Sep 2022	30 Sep 2021
	£'000	£'000
Cost of sales	414	267
Staff costs	1,678	1,335
Non-staff costs	1,722	2,299
Adjusted total costs	3,814	3,901
IPO related expenses	-	(449)
Acquisition related expenses	(129)	(241)
Total	3,685	3,211

 

As at 30 September 2022, the total staff in TEAM was 33, up from 16 at 30 September 2021, and staff costs were up 26% to £1.7m (FY 21: £1.3m). Costs of sales, primarily the cost of the Pershing CI platform in investment management, were 55% higher at £0.4m (FY 21: £0.3m), reflecting a full year of use having started incurring costs in Q3 2021. Non-staff costs, excluding IPO and acquisition related expenses, were flat at £1.6m (FY21 £1.6m), reflecting the focus on cost management across the Group and the delivery of cost synergies from the three acquired businesses.

Omega is subject to enhanced monitoring and review by the JFSC, following the identification of certain historic shortfalls in management controls prior to its acquisition by TEAM. These shortfalls are being remediated, at the cost of the vendor shareholders, by the strengthened management team, and through the roll-out of the operating model used by Concentric.

Exceptional Items

Acquisition related expenses included the legal, regulatory and financial advice fees on the two completed transactions in 2022 and one unsuccessful bid, and legal advice on the revised management incentive plan.

 

Profits

EBITDA adjusted for IPO and acquisition related expenses was a loss of £0.8m (FY 21: loss £0.8m), an increase of 2%, as the lower revenues in investment management offset the contributions from the full year of ownership of treasury services, and two months' ownership of the financial advice businesses. The run rate adjusted EBITDA at the yearend is a loss of £0.6m (FY 21: £1.4m loss).

 

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 increased tax recovery in the year reflects the higher taxable losses in the period.

Earnings per share

The headline loss per share decreased to 7.9p from 15.2p, a 48% reduction. The adjusted loss per share decreased 42% to 4.2p from 7.1p.

Cash Flows

Cash decreased to £1.7m (FY21: £4.9m) as cash operating losses of £1.1m were funded (FY 21: £1.5m) and cash payments of £3.5m (FY 21: £1.6m) were made for acquired businesses.

Statement of Financial Position

Net assets increased by 15% to £8.5m (FY 21: £7.4m), following the issue of new shares for £2.7m (FY 21: £9.6m) less the £1.5m of retained losses (FY 21: £1.7m).

Going concern

The Directors have prepared financial projections along with sensitivity analyses of reasonably plausible alternative outcomes, covering clients and assets, cost inflation and take up of group services. The forecasts demonstrate that the Directors have a reasonable expectation that the Group will require additional financial resources to meet the cash-settled deferred consideration liabilities due in the financial year ending 30 September 2023 (£0.8m). This liquidity position has been exacerbated by the challenging market conditions, with falls in asset prices, and cost inflation, especially in salaries, moving the business away from generating a cash profit from the current operations of the Group. The requirement for additional fundraising has been highlighted as a feature of the business model for TEAM in the initial years on the business plan. The placing and subscription in May 2022 which raised £2.7m for the acquisition of Concentric saw a high level of follow on investment from the Company's institutional and private shareholders, and certain Board members. It is this support from the current shareholders, and the expectation that further earnings enhancing acquisitions will be brought to current and potential shareholders for equity financing in the coming financial year, that gives the Board sufficient confidence to consider the financial position to not meet the test for material uncertainty, and for 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 2022 (FY 21: £nil).

 

 

Mr M C Moore

CFO and COO

9 January 2023

 

 

Corporate Governance 

 

The Board recognises the importance of sound corporate governance and has adopted the Corporate Governance Guidelines for Smaller Quoted Companies published in 2018 by the Quoted Companies Alliance (the "QCA Code"). The Directors anticipate that whilst the Company will continue to comply with the QCA Code, given the Group's size and plans for the future, it will also endeavour to have regard to the provisions of the UK Corporate Governance Code as best practice guidance to the extent appropriate for a company of its size and nature.

 

Below are the 10 key governance principles as defined in the QCA Code and details of how TEAM plc addresses each of these principles. 

 

1.   Establish a strategy and business model which promotes long-term value for shareholders 

How it should be applied:

The Board must be able to express a shared view of the Company's purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the Company intends to deliver shareholder value in the medium to long-term.  It should demonstrate that the delivery of long-term growth is underpinned by a clear set of values aimed at protecting the Company from unnecessary risk and securing its long-term future. 

 

How the Company applies it:

The Board is responsible for the Group's strategy. The operation of the Board is documented in a formal schedule of matters reserved for its approval which is reviewed annually. This includes the Group's strategic aims and objectives. Further, the Group's strategy is explained fully within our Strategic Report.  

 

2.   Seek to understand and meet shareholder needs and expectations 

 How it should be applied:

Directors must develop a good understanding of the needs and expectations of all elements of the Company's shareholder base. 

 

The Board must manage shareholders' expectations and should seek to understand the motivations behind shareholder voting decisions. 

 

How the Company applies it:

The Board is committed to regular shareholder dialogue with both its institutional and retail shareholders. 

 

The principal opportunity for the Board to meet shareholders is at the Company's AGM, which shareholders are encouraged to attend. 

 

The Company also has a dedicated email address which investors can use to contact the Company. The CEO is responsible for reviewing all communications received from shareholders and determining the most appropriate response. 

 

3.    Take into account wider stakeholder and social responsibilities and their implications for long-term success 

 How it should be applied:

Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators and others). The Board needs to identify the Company's stakeholders and understand their needs, interests and expectations. 

Where matters that relate to the Company's impact on society, the communities within which it operates or the environment have the potential to affect the Company's ability to deliver shareholder value over the medium to long-term, then those matters must be integrated into the Company's strategy and business model. 

 

Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups. 

 

How the Company applies it:

The Directors believe that, in addition to its shareholders, the main stakeholders of the Company are its clients, its employees, the communities in which it operates and its two regulatory bodies (the London Stock Exchange, and the Jersey Financial Services Commission). 

 

The Company acts with integrity, focuses on creating results and importantly values people - from its members of staff to those who form the communities it engages with.  

 

The Company dedicates significant time to understanding and acting on the needs and requirements of each of these Groups by way of meetings dedicated to obtain feedback.  

 

The Directors are available to discuss any matter stakeholders might wish to raise. 

 

4.   Embed effective risk management, considering both opportunities and threats, throughout the organisation 

 How it should be applied 

The Board needs to ensure that the Company's risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the Company's supply chain, from key suppliers to end-customer. 

Setting strategy includes determining the extent of exposure to the identified risks that the Company is able to bear and willing to take (risk tolerance and risk appetite). 

 

How the Company applies it  

The Board is responsible for determining the nature and extent of significant risks that may have an impact on the Group's operations, and for maintaining a risk management framework. The Board is responsible for the management of risk and regularly carries out a robust assessment of the principal risks and uncertainties affecting the Group's business, discussing how these could affect operations, performance and solvency and what mitigating actions, if any, can be taken. There is an annual review of the business risk assessments.

 

5.   Maintain the Board as a well-functioning, balanced team led by the Chairman 

 How it should be applied 

The Board members have a collective responsibility and legal obligation to promote the interests of the Company and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the Chairman of the Board. 

 

The Board (and any Committees) should be provided with high quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight. 

 

The Board should have an appropriate balance between executive and non-executive Directors and should have at least two independent non- executive Directors. Independence is a Board judgement. 

 

The Board should be supported by Committees (e.g. audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively. 

 

How the Company applies it  

The Board is responsible for the overall management of the Group including the formulation and approval of the Group's long-term objectives and strategy, the approval of budgets, the oversight of Group operations, the maintenance of sound internal control and risk management systems and the implementation of Group strategy, policies and plans. While the Board delegates specific responsibilities, there is a formal schedule of matters specifically reserved for decision by the Board. Such reserved matters include, amongst other things, approval of significant capital expenditure, material business contracts and major corporate transactions. The Board meets regularly to review performance.

 

The QCA Code recommends at least two members of the Board comprise Non-executive Directors determined by the Board to be independent. The Board is comprised of five Directors, of whom two are executive and three are non-executive. The Board considers all three of the Non-executives, to be independent and, as such, the Company complies with the requirements of the QCA Code in this regard.

 

The Board recognises that the QCA states that save in exceptional circumstances, a chairman should not also fulfil the role of chief executive. The Company does not have a Chief Executive, but relies on Mr J M Clubb as Executive Chair and Mr M C Moore as Chief Financial Officer and Chief Operating Officer to fulfil the duties of a Chief Executive. The Board believes this is appropriate due to the Company having limited financial and operational scale at present. The role and responsibilities of Mr J M Clubb and Mr M C Moore are supported by shareholders. The Board however intends to appoint a Chief Executive in the future, at the appropriate moment, and the role of Mr J M Clubb as an executive Director will be reviewed. The Company is committed to having a majority of independent Directors at all times.

 

With effect from Admission, the Board has established an audit and risk Committee (the "Audit and Risk Committee"), a nomination Committee (the "Nomination Committee") and a remuneration Committee (the "Remuneration Committee") with formally delegated responsibilities.

 

6.    Ensure that between them the Directors have the necessary up-to-date experience, skills, and capabilities 

 How it should be applied 

The Board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The Board should understand and challenge its own diversity, including gender balance, as part of its composition. 

 

The Board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a Board. 

 

As companies evolve, the mix of skills and experience required on the Board will change, and Board composition will need to evolve to reflect this change. 

 

How the Company applies it 

The experience and knowledge of each of the Directors gives them the ability to constructively challenge strategy and to scrutinise performance.  

 

Mr J M Clubb brings leadership, sector expertise and experience of substantially growing small businesses. Mr M C Moore brings sector expertise, financial and operational leadership, and experience of acquisition led growth strategies. Mr L P C Taylor, Mr M M Gray and Mr D J K Turnbull bring additional strategic, regulatory, commercial, transaction and leadership experience which will be invaluable as the Board pursues the Company's growth strategy and continues to develop the Group.  

 

Directors are expected to attend all meetings of the Board, which will all be held in Jersey, and the Committees on which they sit, and to devote sufficient time to the Group's affairs to enable them to fulfil their duties as Directors. In the event that Directors are unable to attend a meeting, their comments on papers to be considered at the meeting will be discussed in advance with the Chair so that their contribution can be included in the wider Board/Committee discussion.  

 

The Company Secretary ensures that all Directors are kept abreast of changes in relevant legislation and regulations, with the assistance of the Company's advisers where appropriate. The Executive Directors are subject to the Company's performance development review process through which their performance against predetermined objectives is reviewed and their personal and professional development needs considered. The Directors are encouraged to raise any personal development or training needs with the Chair.

 

7.    Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement 

 How it should be applied 

The Board should regularly review the effectiveness of its performance as a unit, as well as that of its Committees and the individual Directors. 

 

The Board performance review may be carried out internally or, ideally, externally facilitated from time to time. 

The review should identify development or mentoring needs of individual Directors or the wider senior management team. 

 

It is healthy for membership of the Board to be periodically refreshed. Succession planning is a vital task for Boards. No member of the Board should become indispensable. 

 

How the Company applies it 

A process of formal annual Board evaluation took place during the period. In addition, the Non-executive Directors met, without the Chair present, to evaluate his performance.  

 

The Nomination Committee is required to give recommendations to the Directors where there are vacancies or where it is felt that additional Directors should be appointed. For new appointments the search for candidates is conducted, and appointments are made, on merit, against objective criteria and with due regard for the benefits of diversity on the Board. 

 

8.   Promote a corporate culture that is based on ethical values and behaviours 

 How it should be applied 

The Board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and a source of competitive advantage. 

 

The policy set by the Board should be visible in the actions and decisions of the Chief Executive and the rest of the management team. Corporate values should guide the objectives and strategy of the Company. 

 

The culture should be visible in every aspect of the business, including recruitment, nominations, training and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the company. 

 

The corporate culture should be recognisable throughout the disclosures in the Annual Report, website and any other statements issued by the Company. 

 

How the Company applies it 

The Board monitors and promotes a healthy corporate culture and has considered how that culture is consistent with the Company's objectives, strategy and business model and with the description of principal risks and uncertainties. 

 

The Board has considered and assessed the culture as being inclusive, transparent and collaborative with appropriate behaviours. The Group has a Code of Conduct, an Anti-bribery and Corruption Policy, and policies and procedures relating to whistleblowing stating the Company's commitment to conducting its business with honesty and integrity, its expectation that staff will maintain high standards, and encouraging prompt disclosure of any suspected wrongdoing. All such policies are available to view in the staff handbook.  

 

The terms of reference of the Audit Committee include reviewing the adequacy and security of the Company's arrangements for its employees and contractors to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters and keeping under review the Company's procedures.

 

9.    Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board 

How it should be applied 

The Company should maintain governance structures and processes in line with its corporate culture and appropriate to its: 

·               size and complexity; and 

·               capacity, appetite, and tolerance for risk. 

The governance structures should evolve over time in parallel with its objectives, strategy, and business model to reflect the development of the Company. 

 

How the Company applies it 

The Board has an established Audit, Remuneration, Risk and Nomination Committees which meet regularly in accordance with their terms of reference. The details of these Committees, including their terms of reference and composition, are set out in our website. This detail also includes the roles and responsibilities of each of the Directors. 

 

The matters reserved for the Board, are set out in the Board Terms of Reference, and can be summarised as follows: 

·               Reviewing, approving, and guiding corporate strategy, major plans of action, risk appetite and policies, annual budgets and business plans; setting performance objectives; monitoring.

·               Implementation and corporate performance; and overseeing major capital expenditures, acquisitions and disposals. 

·               Monitoring the effectiveness of the Company's governance arrangements and practices, making changes as needed to ensure the alignment of the Company's governance framework with current best practices. 

·               Ensuring that appointments to the Board or its Committees are effected in accordance with the appropriate governance process. 

·               Monitoring and managing potential conflicts of interest of management, Board members, shareholders, external advisors, and other service providers, including misuse of corporate assets and abuse in related party transactions; and overseeing the process of external disclosure and communications. 

·               The Board is also responsible for all other matters of such importance as to be of significance to the Group as a whole because of their strategic, financial, or reputational implications or consequences. 

 

At this stage the Board believes that the governance framework is appropriate for a Company of its size, but it continues to keep this under review. 

 

10. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders 

 How it should be applied 

A healthy dialogue should exist between the Board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the Company. 

In particular, appropriate communication and reporting structures should exist between the Board and all constituent parts of its shareholder base. This will assist: 

 

·               the communication of shareholders' views to the Board; and 

·               the shareholders' understanding of the unique circumstances and constraints faced by the  

               Company. 

 

It should be clear where these communication practices are described (Annual Report or website). 

 

How the Company applies it 

The Company is committed to open dialogue with all its stakeholders. The Executive Chair liaises with the Company's principal shareholders, regulators and, where appropriate, clients and relays their views to the wider Board. 

 

On the Company's website, www.teamplc.co.uk, shareholders can find all historical regulatory announcements, Interim Reports and Annual Reports.  Annual General Meeting Circulars are posted directly to all registered shareholders or nominees and results of Annual General Meeting votes are also published on the Company's website. As described earlier, the Company also maintains email and phone contacts which shareholders can use to make enquiries or requests. 

 

The Non-executive Directors are available to discuss any matter stakeholders might wish to raise, and the Executive Chair and Non-executive Directors will attend meetings with investors and analysts as required. 

 

Following the Company's AGM, the results of all votes will be made available on its website. 

 

By order of the Board

Mr M C Moore

CFO and COO

9 January 2023

 

The Board and its Committees

 

The Board is responsible for the overall management of the Group including the formulation and approval of the Group's long-term objectives and strategy, the approval of budgets, the oversight of Group operations, the maintenance of sound internal control and risk management systems and the implementation of Group strategy, policies and plans. While the Board may delegate specific responsibilities, there will be a formal schedule of matters specifically reserved for decision by the Board. Such reserved matters will include, amongst other things, approval of significant capital expenditure, material business contracts and major corporate transactions. The Board meets regularly to review performance.

The QCA Code recommends at least two members of the Board comprise Non-executive Directors determined by the Board to be independent. The Board is comprised of five Directors, of whom two are executive and three are non-executive. The Board considers all three of the Non-executive Directors to be independent and, as such, the Company complies with the requirements of the QCA Code in this regard.

The Board recognises that the QCA states that save in exceptional circumstances, a Chairman should not also fulfil the role of Chief Executive. The Company does not have a Chief Executive, but relies on Mr J M Clubb as Executive Chair and Mr M C Moore as Chief Financial Officer and Chief Operating Officer to fulfil the duties of a Chief Executive. The Board believes this is appropriate due to the Company having limited financial and operational scale at present. The roles and responsibilities of Mr J M Clubb and Mr M C Moore are supported by shareholders. The Board, however, intends to appoint a Chief Executive in the future, at the appropriate moment, and the role of Mr J M Clubb as an executive Director will be reviewed. The Company is committed to having a majority of independent Directors at all times.

The Board has established an audit and risk Committee (the "Audit and Risk Committee"), a nomination Committee (the "Nomination Committee") and a remuneration Committee (the "Remuneration Committee") with formally delegated responsibilities. The reports of the chairs of these Committees are as follows:

 

The Audit and Risk Committee

 

The Audit and Risk Committee is chaired by Philip Taylor. Its other members are Michael Gray and David Turnbull, with Matthew Moore in attendance.

The Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported on.

The Committee received and reviewed reports from the Company's management and auditor for the annual accounts and the accounting and internal control systems in use throughout the Group. Further, the Committee advises the Board on the Group's overall risk appetite and strategy, the risk assessment processes, including in relation to compliance functions, and assisting in overseeing implementation of the adopted strategy.

The Committee meets at least three times a year at appropriate intervals in the financial reporting and audit cycle and otherwise as required. The Committee has unrestricted access to the Company's auditor.

The principal areas of focus during the year included the following items:

1.    Reviewed the terms of reference for the Committee to monitor the Committee's compliance.

2.    Reviewed the internal control and compliance procedures, including monitoring of progress on matters requiring improvement.

3.    Review of the Interim and Annual Report and financial statements.

4.    Approval of the management representation letter.

5.    Review of the financial projections and related funding requirements of the Group.

6.    Review of the independence of the auditor, their fees and engagement letter.

7.    The Committee discussed the Audit Plan, the auditor's report and significant issues arising during the audit with the auditor.

 

Role of the external auditor

The Committee monitored the relationship with the external auditor, Grant Thornton Channel Islands, to ensure their independence and objectivity. Based on that assessment, the Committee recommended to the Board the re-appointment of Grant Thornton Channel Islands. In assessing independence and objectivity, the Committee considered the level and nature of services provided by Grant Thornton Channel Islands as well as confirmation from them that they have remained independent within the meaning of the IESBA Code of Ethics.

The auditor did not carry out any non-audit services during the year.

Audit process

The external auditor prepared an Audit Plan for the Committee's review and audit of the full year financial statements. The audit plan set out the scope of the audit, areas to be tested and audit timetable. Following the audit, the auditor presented their findings to the Audit Committee. No major areas of concern were highlighted by the auditor during the year.

 

 

 

Internal audit

The Group assessed the need for an internal audit function and considered that in the light of the existing control environment within the business, there is currently no requirement for a separate internal audit function

 

 

Mr L P C Taylor

Chairman of the Audit & Risk Committee

9 January 2023

 

 

Nomination Report

 

The Nomination Committee is chaired by David Turnbull and its other members are Philip Taylor, Michael Gray and Mark Clubb. Matthew Moore acts as its Secretary.

The Nomination Committee assists the Board in discharging its responsibilities relating to the composition of the Board. It is responsible for, and evaluates, the balance of skills, experience, independence and knowledge of the Board, its size, structure and composition, retirements and appointments of additional and replacement Directors, and will make appropriate recommendations to the Board on such matters. The Nomination Committee also considers succession planning, taking into account the skills and expertise that will be beneficial to the Board in the future.

The Committee met in October 2022. It reviewed the terms of reference then discussed and confirmed the individual and collective suitability of Board members. It was agreed that the Board had operated effectively, that the Executive had performed well and that the Non-Executives had provided appropriate challenge and guidance. It was also agreed that the size of the Board was commensurate with the current size of the business and that the composition provides TEAM with a balanced, experienced, knowledgeable and informed group of Directors who bring strategic experience, foresight and challenge to the Executive and, as such, no changes were necessary at this time to its membership. The Committee reviewed succession planning and agreed that the current plan was sensible and appropriate, but that it must be reviewed on a regular basis as the Group grows.  The Committee noted that it takes into account the diversity or otherwise of the Board and will continue to do so.

The Annual Board Effectiveness review was introduced and conducted in the form of a confidential questionnaire completed by each Director. This provided an opportunity for each of the Directors to comment anonymously on various themes, including Board composition, function and capabilities, strategy, performance of the Company and individuals, governance and organisation, team dynamics and alignment of the Board and Executive team, the processes and procedures of the Board and the performance of themselves and their colleagues. The responses were mostly positive and consistent with the findings at the Committee meeting. However, there are areas that should be enhanced as the Company grows, particularly Group risk assessment, including worst case scenario and crisis management, long term succession planning and Board composition as current Board members approach their reappointment date. The feedback was collated by the Chairman of the Nomination Committee, will be discussed in detail at the next Board Meeting and an action plan agreed to address the issues.

 

 

 

Mr D J K Turnbull

Chairman of the Nomination Committee

9 January 2023

 

Remuneration Report

 

The Directors present the Directors' Remuneration Report (the "Remuneration Report") for the financial year ended 30 September 2022.

Composition and Role of the Remuneration Committee

As detailed within the Corporate Governance report, the Board has established a Remuneration Committee which currently consists of all the Non-Executive Directors, chaired by Mr M M Gray.

The Committee determines and agrees with the Board the framework and policy of Executive remuneration and the associated costs to the Group and is responsible for the implementation of that policy. The Committee determines the specific remuneration packages for each of the Executive Directors and no Director or Senior Executive is involved in any decisions as to their own remuneration. The Committee has access to information and advice provided by the Executive Chairman and the CFO and has access to independent advice where it considers it appropriate. The Committee meets at least twice a year.

This report explains how the Group has applied its policy on remuneration paid to Executive Directors.

Framework and Policy on Executive Directors' Remuneration

The Group's remuneration policy is designed to provide competitive rewards for its Executive Directors, taking into account the performance of the Group and the individual Executives, together with comparisons to pay conditions throughout the markets in which the Group operates. It is the aim of the Committee to attract, retain and motivate high calibre individuals with a competitive remuneration package. It is common practice in the industry for total remuneration to be significantly influenced by bonuses.

The Committee takes the remuneration and employment conditions of its broader employee population into account when setting the remuneration policy for its Executive Directors. The Committee also considers its responsibilities to its shareholders and wider economic environment and market developments.

The remuneration packages are constructed to provide a balance between fixed and variable rewards. Therefore, remuneration packages for Executive Directors normally include basic salary, bonuses, benefits in kind and share based rewards. In agreeing the level of basic salaries and annual bonuses, the Committee takes into consideration the total remuneration that Executives could receive.

Basic Salary

Basic salaries are reviewed on an annual basis or following a significant change in responsibilities. The Committee seeks to establish a basic salary for each Executive determined by individual responsibilities and performance, cognisant of comparable salaries for similar positions in companies of a similar size in the same market.

Incentive Arrangements

Bonuses

These are designed to reflect the Group's performance, taking into account the performance of its peers, the market in which the Group operates and the Executive's contribution to that performance.

Performance related contractual incentive scheme

These are designed to reward performance by the Executive Directors.

Share based rewards

The Group does not have any options nor an Employee Share Ownership Trust (ESOT).

Other Employee Benefits

Depending on the terms of their contract, the Executive Directors are entitled to a range of benefits, including contributions to individual personal pension plans, private medical insurance and life assurance.

Service Contracts and Notice Periods

The Executive Directors are employed on rolling contracts subject to six months' notice from either the Executive or the Group, given at any time.

Service contracts do not provide explicitly for termination payments or damages, but the Group may make payments in lieu of notice. For this purpose, pay in lieu of notice would consist of basic salary and other relevant emoluments for the relevant notice period excluding any bonus.

External Appointments undertaken by Executive Directors

In the Committee's opinion, experience of other companies' practices and challenges is valuable for the personal development of the Group's Executive Directors and for the Company. It is therefore the Group's policy to allow Executive Directors to accept Non-Executive Directorships at other companies, provided the time commitment does not interfere with the Executive Directors' responsibilities within the Group. Fees are retained by the individual Executive Director.

Non-Executive Directors

All Non-Executive Directors have a letter of appointment for an initial period of thirty six months and thereafter on a rolling basis subject to three months' notice by either the Non-Executive Director or the Group, given at any time.

In the event of termination of their appointment, they are not entitled to any compensation.

Non-Executive Directors' fees are determined by the Executive Directors having regard to the need to attract high calibre individuals with the right experience, the time and responsibilities entailed, and comparative fees paid in the market in which the Group operates. They are not eligible for pensions.

Management Incentive Plan ("MIP")

On 12 May 2022. the Company set up the TEAM plc MIP in order to ensure selected employees of the Company are well motivated and identify closely with the success of the Group. The Company's remuneration Committee committed to make decisions about participation, size and timing of awards following the IPO of the Company.

Following consultation with major shareholders, the Remuneration Committee agreed to proceed with grants under the MIP, but with amended participation, size and timing from that set out at the IPO. In summary the grants will be as follows:

-      Matthew Moore, CFO and COO, 650 shares, equivalent to 6.5% of the issued capital in TEAM Midco Limited.

-      One-third of the MIP will be set with reference to the TEAM plc share price, with full pay out where the share price is twice the Subscription Price of 60p.

-      Two-thirds of the scheme will be set with reference to the TEAM plc market capitalisation, with full pay out where the market capitalisation is equal to or exceeds £40m.

-      A holding period of 12 months is required for any Ordinary Shares issued under the MIP. Previously, there were no holding periods under the MIP.

Directors' Emoluments

The remuneration of each Director as listed on page 54, in the Company Information section, during the year ended 30 September 2022 is set out below:

						Pension	Pension
						Contribution	Contribution
				Year ended	Year ended	year ended	Year ended
	Salary	Benefits	Bonus	30 Sept 2022	30 Sept 2021	30 Sept 2022	30 Sept 2021
	£	£	£	£	£	£	£
Executive
J M Clubb	118,750	3,322	20,000	142,072	89,436	9,500	4,667
M Moore *	160,000	8,468	40,000	208,468	138,270	12,792	7,467
Non-Executive
L P C Taylor *	25,000	-	-	25,000	14,581	-	-
M M Gray *	25,000	-	-	25,000	14,581	-	-
D J K Turnbull *	25,000	-	-	25,000	14,581		-
L Smith ***	-	-	-	-	3,750	-	-
L Trevellyan **	-	-	-	-	4,166	-	-
A Stanton ***	-	-	-	-	2,085	-	-
	353,750	11,790	60,000	425,540	281,450	22,292	12,134
Notes:
* appointed 1 March 2021
** resigned 27 January 2021
*** resigned 1 March 2021

The highest paid Director for 2022 was Mr M C Moore receiving emoluments of £208,468 (FY21: M C Moore £138,270).

Mr J M Clubb has a salary of £250,000, of which he has elected to waive half, ahead of the Group generating a positive cash flow.

Directors' Interests in Management Incentive Plan shares

	Total	Total
	30 Sept 2022	30-Sep-21
Director	No.	No.
J M Clubb	-	375
M C Moore	650	438
	650	813

 

The management incentive plan does not qualify as an employee share option scheme as the shares were purchased at fair value. There are no voting rights attached to these shares.

Directors' Report for the year ended 30 September 2022

 

Introduction

The Directors present their report and the consolidated financial statements for TEAM plc (the "Company") and its subsidiaries (the "Group") for the year ended 30 September 2022.

Results

The financial statements are set out on pages 42 to 66.

Dividend

The Directors do not propose to pay a dividend for the year ended 30 September 2022 (FY21: £nil).

Capital Structure

Full details of the issued share capital, along with movements during the year, are set out in note 16 on page 61.

Incorporation

The Company was incorporated on 4 July 2019. The Company is a registered public company limited by share capital and was incorporated and registered in Jersey, Channel Islands. The Company registration number is 129405.

Directors' Shareholdings

The Directors who held office during the year and their interest in the shares of the Company were as follows:

		30 Sept 2022	30 Sept 2021
	Appointed	Number of shares	Number of shares
J M Clubb	4 July 2019	3,768,750	3,432,500
M C Moore*	1 March 2021	-	-
M M Gray	1 March 2021	47,727	22,727
D J K Turnbull	1 March 2021	33,645	17,045
L P C Taylor	1 March 2021	33,645	17,045

 

Further details of Directors' service contracts, remuneration, share interests and interests in options over the Company's shares can be found in the Remuneration Report on page 27.

*Mr Moore holds shares in the Management Incentive Plan, see note 5 on page 54 for further details.

Major Shareholdings

At the date of publication of this report, the Company had been notified of the following shareholdings of 3% or more of its issued share capital:

	Ordinary shares	% of issued share capital
Mark Clubb	3,780,500	17.20
Schroders plc	2,069,284	9.42
Canaccord Genuity (Marlborough Funds)	1,706,626	7.77
Lance Trevellyan	839,844	3.82
Metropolitan Guarantee Limited	763,502	3.47

 

Political Contributions

The Group and Company did not make any political donations or incur any political expenditure during the year (FY21: nil)

Going concern

The Directors have prepared financial projections along with sensitivity analyses of reasonably plausible alternative outcomes. The forecasts demonstrate that the Directors have a reasonable expectation that the existing Group will require additional financial resources to meet the cash-settled deferred consideration liabilities due in the coming financial year (£0.8m). This liquidity position has been exacerbated by the challenging market conditions, with falls in asset prices, and cost inflation, especially in salaries, moving the business away from generating a cash profit from the current operations of the Group. The requirement for additional fundraising has been highlighted as a feature of the business model for TEAM in the initial years in the business plan. The placing and subscription in May 2022 saw a high level of follow on investment from the institutional and private shareholders, and the Board members. It is this support from the current and potential shareholder base, and the expectation that further earnings enhancing acquisitions will be brought to current and potential shareholders for financing in the coming financial year, that gives the Board sufficient confidence to consider the financial position to not meet the test for material uncertainty, and for the going concern basis to be appropriate for the accounts. 

Certain activities of the Group are regulated by the Jersey Financial Services Commission, the statutory regulator for financial services business in Jersey which has responsibility for policy, monitoring and discipline for the financial services industry. The JFSC requires the regulated entities' capital resources to be adequate; that is sufficient in terms of quantity, quality and availability, in relation to its regulated activities. The Directors monitor the regulatory capital resources on a regular basis. Theta Asset Management is however expected to generate ongoing losses, that will require further capital allocations to maintain the required capital adequacy of the business. These losses will be funded by the positive cashflow made in other group entities, however these positive cashflows are not expected to be sufficient to also cover the ongoing costs of the plc entity. As at the date of signing this report, further capital will be required within the coming financial year to maintain the liquidity of the Group, while the capital position of the regulated businesses within the Group are expected to remain sufficient.

Likely future developments

The Directors are focused on bringing the Group to a cashflow positive position, and able to cover deferred acquisition payments from Group resources. In the early years of the Team business plan, this was not expected, nor has it been the outcome. This was due to the costs associated with running a plc entity with a listing on the AIM market, together with the losses made in the investment management division. The Board is actively pursuing a pipeline of earnings enhancing acquisitions, in Jersey, other Crown Dependencies, and in the UK, and in delivering the revenue and cost synergies from the acquired subsidiaries.  These developments, where supported by raising further share capital, are expected to move the Group into cash flow positive trading.

Events after the Reporting Period

No events occurred after the statement of financial position date that are required to be disclosed.

 

Annual General Meeting (AGM)

The resolutions being proposed at the AGM include usual resolutions dealing with the ordinary business of the AGM. A description of all the resolutions is set out within the Notice of AGM document being posted separately.

Statement of Directors' Responsibilities

The Directors acknowledge their responsibilities for preparing the Annual Report and the consolidated financial statements in accordance with applicable law and regulations.

Companies (Jersey) Law 1991 requires the Directors to prepare consolidated financial statements for each financial year. Under that law. the Directors have elected to prepare the financial statements in accordance with the requirements of International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board ('IASB'). Under Companies (Jersey) Law 1991, 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 Company and Group and of the profit or loss of the Company and Group for that period. In preparing these financial statements, the Directors are required to:

·    select suitable accounting policies and apply them consistently;

·    make judgements and accounting estimates that are reasonable and prudent;

·    state whether applicable Accounting Standards 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 Company and Group 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 Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the Company and Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to the auditors     

Each of the persons who are Directors at the time that this Directors' Report is approved has confirmed that:

·    so far as that Director is aware, there is no relevant audit information of which the Company's and the Group's auditor is unaware, and

·    that Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant information and to establish that the Company's and the Group's auditor is aware of that information.

This report was approved by the Board on 9 January 2023 and signed on its behalf by:

 

 

Mr J M Clubb                                                                               Mr M C Moore

Executive Chair                                                                            CFO and COO

 

 

Directors' Biographies

 

Jonathan Mark Gordon Clubb

EXECUTIVE CHAIRMAN

Mark began his 27 year career in investment banking at Hoare Govett and has held various senior management roles at UBS Philips and Drew and BZW (latterly Credit Suisse First Boston). In 1997 Mark, together with six partners, founded London-based investment banking boutique, Altium Capital Partners. Following a management buyout of Altium Capital Partners in 2008, Mark returned to Jersey and has spent the last 12 years in investment management, including at private client stockbroker, Collins Stewart, later acquired by Canaccord Genuity Inc.

 

Matthew Charles Moore

CHIEF FINANCIAL OFFICER & CHIEF OPERATING OFFICER

Matthew is a chartered accountant with a wealth of experience in senior leadership and financial roles, having been CFO at Close Investments, CFO and COO at Origen Financial Services (an Aegon group company) and CFO and COO at Ascot Lloyd, a vertically integrated UK wealth management firm founded by Oaktree, a leading private equity investor. Matthew adds significant acquisition and integration expertise to TEAM. He was responsible for acquisitions at Bellpenny, and subsequently Ascot Lloyd, and previously worked in the acquisitions team at Close Wealth Management, prior to which he held various roles in M&A at Commerzbank Securities and ING Barings.

 

Louis Philip Chetwynd Taylor

INDEPENDENT NON-EXECUTIVE DIRECTOR & SENIOR INDEPENDENT DIRECTOR

Philip has over 40 years' experience in the finance industry, beginning his career at PwC in London. Philip is currently a lay member of the States of Jersey Public Accounts Committee and as a Director of a property development company. Philip was the Senior Partner of PwC Channel Islands and a Global Leader of the PwC Quality Assurance Programme. Philip has previously served as Chairman of the States of Jersey Treasury Advisory Company a Commissioner of the JFSC, as a Member of the Conduct and Case Management Committees of the UK Financial Reporting Council, as a Member of Jersey Financial Services Advisory Board and as Director of number of listed and other financial services companies.

 

David James Ker Turnbull

INDEPENDENT NON-EXECUTIVE DIRECTOR

He is currently Chairman of Fiduciary Settlements Ltd and a Non-Executive Director of mnAI Data Solutions Ltd.

David was previously a Managing Director at Salomon Brothers (now Citigroup) where he held various senior positions within the firm including Global Co-Head of Japanese Equities and Global Head of European Equities. David also served on the European Management Committee, Global Equity Committee and Global Business Practices Committee. Prior to Salomon Brothers, David worked for Rowe and Pitman in London and Tokyo. In 1999 David cofounded and was Chief Operating Officer of Antfactory, a global technology investment firm; in addition, he founded and acted as Chief Executive of its Japanese subsidiary, Ant Capital.

From 2002 to 2010, David was a fund manager focused on Asia, first at Prodigy Capital, where he was a Founding Partner, and then at Morant Wright. David is a former Senior Advisor to the Industrial and Commercial Bank of China, has advised several other companies, particularly in the financial sector, and served on several company boards including Whittard of Chelsea.

Michael Mckenzie Gray

INDEPENDENT NON-EXECUTIVE DIRECTOR

Michael has over 20 years' management experience in banking. Michael founded MMG Consulting Ltd in 2015, an advisory consultancy firm based in Jersey.

Currently, Michael serves as a non-executive director for Triton Investment Management Limited (a Swedish private equity group), GCP Infrastructure Investments Limited (a FTSE 250 listed company), J-Star Jersey Company Limited (a Japanese private equity group), Foresight Enterprise VCT plc (a listed venture capital fund), Jersey Finance Limited (a Jersey finance not-for-profit), JTC plc (a FTSE 250 listed trust and corporate services company) and EPE Special Opportunities Limited.