TEAM plc (LON:TEAM) Chief Executive Officer Mark Clubb caught up with DirectorsTalk to discuss the group’s FY25 results, organic growth across all divisions, and the transformational impact of the WH Ireland and Epic acquisitions.
Q1: Now, you’ve announced your FY25 results today, and recently you’ve made some significant acquisitions. Let’s begin by talking about the results and the main financial highlights.
A1: So, basically, these results show that we’ve delivered organic growth, that the platform has been built, and that we’re now, post the results, adding scale.
So, just returning to the numbers, revenue up 16%, and client assets up, we’re now just short of £1.3 billion, £1.29 billion. Pleasingly, good growth in the investment management division, up 19% and that’s starting to filter through into our EBITDA where, yes, it was a loss, but it was an improved loss. So, the momentum is clearly there and International is producing useful and growing profits.
What actually happened, really, was this was a clean year, effectively so it’s all organic. Costs were well controlled, that’s seen by costs up 6% versus revenue up circa 16% so we’re controlling our costs. The EBITDA shows that the operating sort of leverage is starting to come through and it shows that actually, even without acquisitions, we can deliver progress. We’re positioned extremely well to scale.
Q2: What happened in terms of the divisional performance?
A2: Taking it from the top, I always think investment management is our core activity. So AUM was up 19% to 387 million so that was good inflow but most importantly, the landmark point from last year was the launch of the UCITS range. Pleasingly, performance has been good and multi-asset portfolios were ranked 3rd out of 342 portfolios by the independent ratings agency Defaqto. In actual fact, the low risk and balanced both received platinum awards and the growth gold award so that’s investment management.
We’ve then got the advisory business in Jersey. Again, good growth in revenue. We got the discretionary licence in that business that allowed us to continue to shift clients into that discretionary service, which is good in terms of client outcomes, but also stickiness of client.
In International, revenues are now over £8 million, or as reported. So, again, very good growth, 17%. Assets are now all the way up to just short of £560 million and there’s an underlying profit of over £400,000 in the reported period versus a loss the prior year. What I would say is that the adviser network in International recruitment is very strong and was in the period and so it’s working, as they say.
Q3: Now, TEAM’s been busy since the year end with a series of significant transactions, most notably the WH Ireland transaction. What will be the impact of these deals?
A3: Well, let’s start with WH Ireland. I’m actually sitting in WH Ireland’s London office as we speak. The obvious one when it comes to WH Ireland is that our client assets increase by £900-odd million on top of our own and I would argue that that moves us from being subscale to being highly scalable.
For Epic businesses, the book of mandates is an additional £150-odd million of assets under management. So, that will drive our core investment management proposition. The services business in Guernsey is a fiduciary business with a fiduciary licence, which means that we can provide a full suite of services to a family office, a charity, a foundation, an investment company and I think that that’s highly, highly scalable.
Basically, we did exactly what we said we would do. We grew the business organically, we improved the efficiency, we took International into profit, and that was all without those acquisitions. Post the period, so post September, we then executed.
So, the two acquisitions, WH Ireland in particular, are transformational, basically because it gives us that scale and out of that scale, we will achieve further operating leverage. So, we’re no longer building the platform, we’re now exploiting it.
Q4: Finally, just looking ahead, where will TEAM be focusing its energies?
A4: We’re just bigger, which means that we’re operationally stronger and we want to prioritise the same things that we always prioritise. That is grow the client assets, scale the discretionary and the multi-asset solutions, including the UCITS funds, and move the platform into profitability. That direction has always been clear, and I would argue that the results and the post-results acquisitions show that the execution is well underway.
