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A growing business at a bargain basement price

Tavistock's shares trade on less than half sum-of-the-parts valuations even though the firm is rebuilding profitability
January 9, 2024
  • First-half revenue up 19 per cent to £20.6mn
  • Operating profit of £0.9mn reverses £0.5mn loss
  • Net cash of £2.6mn boosted £5mn post period end
  • Interim dividend of 0.07p paid in December 2023

Aim-traded financial services group Tavistock Investments (TAVI: 5.25p) is successfully rebuilding profitability through selective acquisitions and organic growth initiatives after selling off its profitable multi-asset manager to discretionary fund manager Titan Wealth Services.

Last April’s earnings-accretive acquisition of Precise Protect, a fast-growing insurance and protection business based in Bangor, Northern Ireland, has played a major part in the return to profit (‘Two valuation anomalies that are worth exploiting’, IC, 13 April 2023). Precise Protect boosted the group’s client base by almost half to 110,000 private clients, doubled its network of financial advisers to more than 400, and is lifting revenue through upskilling of its mortgage and protection advisers to independent financial advisers (IFAs) through the group’s academy. The contribution from Precise Protect and Tavistock’s growing advisory business now cover central overheads, hence the dramatic improvement in profitability. It’s not unreasonable to expect an even better outcome in the second half.

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