By Lois Vallely 5th October 2022 2:23 pm
Tenet Group has set aside £13.7m to cover potential liability arising from the British Steel Pension Scheme redress scheme.
In its financial results to 30 September 2021 (see Companies House,) the company said it has reached an agreement with its shareholders to enable it to meet estimated historic liabilities arising from the BSPS.
The group’s focus is to “ensure BSPS clients are redressed where necessary”. It estimates compensation will be paid between December 2023 and February 2024.
Tenet reported profit before tax had grown to £3.5m in 2021, compared with a loss of £600,000 in 2020. It said this was driven by “strong performance” across all business lines.
Gross profit was up 20% to £23.5m, compared with £19.7m in 2020. Tenet out this down to a focus on its own-branded businesses and improving margins.
Meanwhile, the company achieved EBITDA of £4.3m – significantly up on the £800,000 reported in 2020.
However, the group said it had continued to struggle with the effects of the Covid-19 pandemic, particularly during the first half of the financial year.
Revenue reduced slightly to £157.4m, compared with £160.7m in 2020, due to “lower volumes in the network”.
In January, Money Marketing reported that adviser members have continued to leave Tenet, amid complaints about technology and system issues.
Money Marketing understands that Tenet had also released a number of firms which do not, or are not willing to, meet new standards such as the Consumer Duty, or which no longer suit its proposition.
As well as the BSPS provision, the business reported an impairment charge of £10.3m, owing to reorganisation of the business and “historical acquisition activity”. This is a non-cash item.
Loss before tax after impairment and BSPS provisioning was £21.3m, compared with a loss of £4.1m in 2020.
CEO Response
Tenet Group chief executive Mark Scanlon said: “Despite the unprecedented challenges of the Covid-19 pandemic, I am pleased to report that the proactive measures we implemented together with the dedication and hard work of our colleagues have generated a good set of underlying results in the year under review.
“Our focus in 2020/21 has been on reorganisation, continued investment in technology and establishing partnerships to better support our network members, as well as making strategic acquisitions to support our growth objectives.”
Tenet said it has continued focus on digitisation and investment in technology. This includes significant investment in its own in-house technology – Tenet Tech.
These measures aim to improve efficiencies and prepare for increased regulation and future growth.
Tenet’s own advisory arm – Tenet&You – launched its first digital product in 2021 – a mortgage monitoring service.
It automatically calculates the money that employees could save by switching their mortgage provider, in partnership with Personal Group and Dashly.
Scanlon added: “We have remained mindful of external pressures, including increasing levels of regulatory oversight, and we have in place a strategic vision for the network model for AR advisers that is centred on quality, not quantity.
“This aligns with the regulator’s industry-wide push to ensure good outcomes for end-customers. It includes the new Consumer Duty standards and increasing AR regime and Principal scrutiny.
“We have raised our standards for new members as well as tightening our existing membership criteria. In addition we introduce new and revamped learning, development, and growth services for members. All underpinned by our ongoing investment in technology for the benefit of advisers within our network.
“Our actions ensure we continue to champion our financial advisers. Who have a vital role to play in managing people’s financial peace of mind.”
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