Tavistock Investments PLC (LON:TAVI) said the financial year to March 31 ended strongly.
The takeover target said it could not say too much about its performance in fiscal 2021 without incurring considerable additional expense as it is deemed to be in an offer period because of a bid approach by TEAM PLC.
READ Tavistock Investments again dismisses Team takeover approach
The wealth management firm did reveal, however, that gross revenues in the company's advisory business were in line with the last financial year, at £24 million, of which roughly 80% is annualised recurring revenue.
The board noted that recently reported mergers & acquisitions (M&A) transactions in the sector have been conducted at a multiple of between 3 – 3.5 times recurring advisory revenue.
Tavistock's funds under management at the end of March also remained similar to last year at about £1.1bn. The board, which continues to resist the bid approach from TEAM, said investment management businesses have recently changed ownership at values equivalent to between 2% and 4% of funds under management.
The company received £2.1mln via the government’s Coronavirus (COVID-19) business interruption loan scheme (CBILS) as a precautionary measure but has not needed the money and plans to repay the CBILS loan as soon as circumstances properly permit.
Tavistock's new low-cost investment platform was launched in December 2020 and has been well received, the company said and is already attracting many new clients. The board believes that significant assets will be transferred to the Tavistock platform over the next few years.
Tavistock said the bid approach by TEAM, a newly listed AIM company supported by a small group of former employees and disaffected shareholders, has been an unwelcome distraction.
The Tavistock board has repeatedly rebuffed the approach, saying it is significantly below the value of the company's assets and only offers illiquid shares as consideration.
By contrast, the Tavistock board has been exploring ways in which the inherent value of the company's assets can be used to fund the company's development and to deliver significant value for shareholders, it said.
Shares in Tavistock were up 2.1% at 2.4p in early deals.