1 June 2023

TEAM PLC

("TEAM", the "Company" or the "Group")

Interim Results

TEAM plc (AIM :TEAM), the wealth, asset management and complementary financial services group, is pleased to announce its unaudited interim results for the six months ending March 31st 2023. Separately today TEAM is announcing two acquisitions which deliver on its strategy to expand geographical reach and service capabilities and on completion will lift assets under management and advice to over £850 million.

·    TEAM is today announcing its interim results with total revenues for the six month period to March 31st of £1.9 million (2021: £999,000) reflecting the contribution made by acquisitions.

·    Underlying loss before tax was reduced to £374,000 (2021: £382,000)

·    The integration of the Omega and Concentric acquisitions has been successful and both are now operating from the same offices

·    TEAM is pleased to report that £25 million of client assets have transitioned to TEAM AM model portfolios, underlining their robust performance 

·     TEAM is also announcing separately today two acquisitions that extend its geographical reach and service capabilities. First, for a total consideration of up to £5.6 million, is Dubai headquartered Globaleye Wealth Management which has 5 offices across Africa and Asia. Second, for a total consideration of up to £2.5 million, is Thornton Associates, a financial planning business based in the Isle of Man

·    These deals, the fifth and sixth acquisitions since TEAM came to the market in 2021 deliver on TEAM's strategy to build and expand into fast-growing international finance centres and enhance its service capabilities as well as on TEAM's strategy to build in the Crown Dependencies. The integration of these businesses should deliver material cross -selling, revenue and cost synergies

·     As a result of these acquisitions, TEAM's total AUM will increase to over £850 million

·   TEAM has an ambitious roll-out strategy which requires ongoing shareholder support;  with its Jersey location, TEAM is ideally placed to support clients living outside of their mainland home tax jurisdiction and their specialist financial needs

Mark Clubb, CEO and Founder of TEAM said: "I am pleased to report that our interim results demonstrate our ability to deliver, demonstrating the attractions of our multi asset approach as well as our ability to successfully deliver on integrating acquisitions. As a Group we continue to have an ambitious roll-out strategy and I would like to thank our shareholders for their ongoing support.

The acquisition of Globaleye and Thornton takes TEAM closer to £1 billion under management in our target markets, and extends our global footprint to seven countries. In doing so, we believe we are carving out a valuable section of the high net worth market who are living outside of their mainland home tax jurisdiction and in need of specialist financial advice, which in the past has not been easily accessible. TEAM is filling that space and we see significant scope to expand further."

Enquiries

TEAM plc

Mark Clubb / Matthew Moore

Telephone: +44 (0) 1534 877210

Hannam & Partners

(Financial Adviser to TEAM)

Giles Fitzpatrick / Ernest Bell / Richard Clarke

Telephone: +44 20 7907 8500

Shore Capital

(Nominated Adviser and Broker to TEAM)

Tom Griffiths / Guy Wiehahn / Iain Sexton

Telephone: +44 20 7408 4090

Novella Communications

(Financial Public Relations)

Tim Robertson / Safia Colebrook

Telephone: +44 20 3151 7008

teamplc@novella-comms.com

Information on TEAM

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, through team and individual hires, through collaboration with suitable partners, and organic growth and expansion.

www.teamplc.co.uk

Executive Chairman's Statement

Dear Shareholders,

I am delighted to share with you the latest updates regarding our Company's performance, strategic initiatives, and two significant acquisitions being separately announced today that will greatly enhance our presence and capabilities in the wealth, asset management and complementary financial services industry.

First,  I am pleased to report that we have witnessed ongoing client migration into our Team AM Model Portfolios, our Discretionary Fund Management (DFM) offering. To date, we have seen over £25 million of client assets transitioning into these portfolios on various platforms, driven by our strong investment performance and the suitability of our offerings.

Furthermore, our Model Portfolios are now available on various platforms, including Morningstar and Quilter International. Expanding our presence on these platforms will be a priority for us moving forward.

I am particularly proud of the successful integration of the Omega and Concentric acquisitions. Both entities now operate from the same office, following streamlined procedures and processes. Moreover, we are confident of recruiting new talent to strengthen our team. This integration sets a strong foundation for our continued growth and improved operational efficiency.

In light of recent developments in the banking sector, we have observed an increase in client interest across various levels of our treasury management services at JCAP. Clients have been taken by surprise and are actively seeking reliable financial solutions. The business development opportunity has never been stronger. Our focus now lies in converting these opportunities into clients. The potential for growth is evident, and we are determined to capitalise on these opportunities.

Turning to the financial performance for the 6 month period ended 31st March 2023 (unaudited), our revenue grew to £1.9 million representing a substantial increase from the previous year's corresponding period (£999,000). However, staff costs as anticipated increased to £1.4million as we continued to invest in our talented workforce. Non-staff costs also increased as part of our commitment to operational enhancements. These factors contributed to an underlying loss before tax of £374,000 versus a loss of £382,000 in the prior year.

While these results demonstrate the challenges we have faced, we are confident in our ability to overcome them. This involves extending our services, both in terms of type and jurisdictionally, and managing costs. But growing our client base remains our top priority.

We are firmly committed to building shareholder value and believe that our ongoing efforts and strategy will lead to improved financial performance in the future. Our near term objective is to be cash-flow break even.  However, we have a clear path to achieving much more.

In addition to our financial performance, I am thrilled to announce two significant acquisitions being separately announced today that will greatly enhance our presence and capabilities and provide further scale and access to new geographies.

First, the acquisition of Globaleye Wealth Management, a renowned boutique advisory firm specialising in wealth management and financial services. With offices across key global locations, including Dubai and Singapore, Globaleye brings a wealth of expertise and a substantial client base with total assets under advice of £242 million.

This strategic acquisition allows TEAM to tap into high-growth markets, expand into new regions, and provide a wider range of services to our clients. We are particularly excited about the opportunity to transition Globaleye clients to TEAM's investment management services, offering them a seamless and integrated experience.

Additionally, we are delighted to announce the conditional acquisition of Thornton, a respected chartered Financial Planning firm based on the Isle of Man. Thornton has established a strong reputation for providing financial advice and investment services to individuals, trustees, and business owners. With assets under advice of £121 million, Thornton brings valuable expertise and a loyal client base to TEAM.

The integration of Thornton into our operations will create synergies and open up growth opportunities within our previously stated Crown Dependencies ambitions. Thornton's strong reputation and client relationships will complement our existing international finance center offerings.

These acquisitions will bring our total AUA and AUM to over £850 million and align with our strategic objectives of expanding our international footprint and enhancing our service capabilities. By combining the strengths of Globaleye and Thornton with TEAM's expertise and resources, we are well-positioned to deliver good client value and holistic financial solutions to our clients.

I would like to extend a warm welcome to the teams at Globaleye and Thornton, who will play integral roles in our continued growth and success. We are excited about the future prospects that these acquisitions bring and remain committed to providing our clients with industry-leading financial services across multiple jurisdictions.

Thank you for your ongoing support as we continue this transformative journey. Together, we will seize new opportunities and solidify TEAM's position as a premier wealth management and financial services group.

Thank you.

Sincerely,

Mr J M Clubb

Executive Chair

31 May 2023

Operational and Financial Review

Review of the results for the period

The table below shows the Group's financial performance for the six months to March 2023 along with prior comparative periods and provides a reconciliation to the underlying results, which the Company considers to be an appropriate reflection of the Group's underlying trading, and the statutory result.

The first six months of the financial year includes full contributions from the two financial advice businesses acquired in July and August 2022, and these acquisitions account for the majority of the changes from the previous interim results to 31^st March 2022. Overall, the Group traded as expected, in a challenging macroeconomic environment.

Revenues increased 90% to £1,898,000 from £999,000, while the underlying loss before tax was improved at a loss of £374,000, reduced from £382,000. Underlying adjustments  of £132,000, reflecting non-cash expenses, were down from £328,000.  

Client assets

Reflecting the range of services provided by TEAM, we now report client assets by the service provided:

·    Investment management includes bespoke, modelled and advisory portfolio management

·    Fund management is where TEAM is the manager for fund structures (together referred to as assets under management ("AUM")

·    Financial planning assets under administration ("AUA") is where our IFA businesses advise client but do not manage the investments

·    Asset under review refers to the investment consulting service provided to large trustee and institutional investors, and

·    Cash Management is where JCAP advises trustees and institutional invetors on their cash holdings.

The Directors consider that AUM and AUA together are the most informative measure of client assets.

The table below shows the opening and closing client asset position and the movements during the period broken down by segment and service provided:

.

During the 6 months to 31 March 2023, we are pleased to report that AUM and AUA increased by 4% overall, with 1% from net inflows and 3% from investment performance. This is a significant improvement from H1 2022 and reflects that the businesses have settled down from a period of initial post-acquisition disruption. The flow of client assets into investment management from the financial planning businesses has accelerated, and there is now £6 million of client assets under advice and management.  

Segmental analysis

Revenues

Total revenues rose 90% to £1,898,000 (H1 22: £999,000). Investment and fund management ("IFM") revenues fell 3.8% to £511,000, as the MSCI Private Client Balanced Index fell 4.8% compared with the average of H1 22. Advisory and Consultancy ("A&C") increased 196% to £1,387,000 (H1 22: £468,000), with the change primarily due to the inclusion of a full 6 months of contributions from the two financial planning acquisitions.

Costs

The total underlying costs for the Group increased by 78% to  £2,044,000, (H1 22: £1,151,000), with the new acquisitions accounting for the bulk of the increase. IFM saw a 15% increase to £715,000 (H1 22: £621,000), as the businesses responded to salary and IT inflation in Jersey, while A&C increased 348% to £1,005,000 (H1 22: £224,000).

Loss before tax

The resulting loss before tax for the half year was £506,000 (H1 22: £710,000), a reduction in the loss of 28%. The underlying loss before tax decreased by 2% to £374,000 (H1 22: £382,000). IFM's loss increased 57% to £404,000 (H1 22: 292,000), which A&C generated a profit of £354,000, 64% up from £216,000.

The underlying adjustments are shown in the below table:

Amortisation of client relationships was £497,000 (H1 22: £229,000) with a full period of amortisation of the intangible assets relating to the two financial planning business. Contingent deferred consideration payable for these acquisitions included income targets, and with the fall in global asset markets in the past period,  neither businesses reached the targets for the maximum payments, and a reduction in the amount payable has been recorded. This was £452,000 in 2023 (H1 22: nil). There were no acquisition related expenses. Total underlying adjustments were £132,000 (H1 22: £328,000).

Taxation

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.

Earnings per share

The Group's underlying loss per share was 1.7p, a reduction of 23% from 2.2p in H1 22. The loss per share was 2.3p, a reduction of 41% from 3.9p in H1 22.

Financial position and going concern

The Group's cash position has fallen from £3.0 million to £0.9 million. As at 31 March 2023 the regulated entities within the Group all held in excess of the required level of regulatory assets.

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 an expectation that the Group will require additional financial resources to meet working capital requirements and the cash-settled consideration liabilities due in the coming 12 months. 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 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 2023, that gives the Board sufficient confidence to consider the going concern basis to be appropriate for the accounts. 

Dividend

The Group is at the early stages of building the business, and so is consuming capital. No dividends are expected to be paid until underlying profits are made.

Mr M C Moore

CFO and COO

31 May 2023