After a business review, the firm decided to close 5 of its 11 offices and has made a small number of senior and junior staff redundant.
Despite the cost cutting the firm said in its interim results today that it was planning to grow and is going ahead soon with plans to launch its own ‘low cost’ platform, The Tavistock Platform, for the group’s advisers.
The group reported revenue for the six months ending 30 September down 7% from £14.2m to £13.8m.
Cost cutting helped it report adjusted EBITDA up from £1.006m to £1.26m however the group made an overall pre-tax loss from operations of £416,000 due to £1.2m in restructuring costs.
During the period, Tavistock Wealth, the investment management arm, increased its contribution to the group's adjusted EBITDA by 32% from £1.5m to £2m compared to the same period last year. Funds under management remained steady at £1.1bn.
The advisory business increased its contribution to the group's adjusted EBITDA by 344%, from £217,000 to £964,000 mainly due to curtailing previous losses at two entities.
However new business levels, which the group says are heavily influenced by ”advisers' ability to meet with clients” and recurring revenues linked to the value of the clients' investment assets have been adversely impacted in the short-term by the pandemic. During the six months to 30 September, advisory gross revenue fell by 8% in comparison with last year, from £11.6m to £10.7m.
Chairman Oliver Cooke said during the six months the company’s leadership team had undertaken a detailed review of business operations which has led to a “comprehensive group-wide reorganisation exercise.”
This will result in the reduction in the number of offices used by the group from 11 to 6 and annual cost savings of £750,000.
The company has also axed a number of tie-ups, such as one with the Law Society, due to lack of “productivity.”
Mr Cooke added that it was difficult to predict the company’s likely performance in the second half due to the pandemic, Brexit and the consequences of the US Presidential election.
But he added: “The leadership team is confident that the business will continue to perform well over the medium and long term. In addition to focusing on the optimisation of the group's facilities, the containment of costs and the improvement of operational efficiency, they are progressing with plans to deliver greater value to shareholders.”