KINGSWOOD HOLDINGS LIMITED
("Kingswood", the "Company" or the "Group")
Market Update and Notice of Results
Major strategic initiatives in place to deliver sustained earnings growth for investors
Kingswood Holdings Limited (AIM: KWG), the integrated wealth management group, is pleased to announce that after a period of restructuring, the platform is in a position to deliver sustained earnings growth for investors.
While the last couple of years have seen a period of significant change within the Group and 2018 also impacted by a highly uncertain market environment and weaker investor sentiment resulting in an industry-wide slowdown in net inflows, the Board believes that the Group is well-positioned for growth once sentiment improves. A new management team and organisation structure is now in place, and the three-year growth plan initiated by the Board at the beginning of the year has solidified a number of strategic initiatives designed to enhance client yield and stimulate growth. The Board and management's key objective is to prove its model and execution capability.
Gary Wilder, Kingswood's Group CEO said: "Since Patrick Goulding and I have taken over day-to-day management control at the Board's request earlier this year, we have now implemented the significant changes that were originally planned."
Recent business initiatives include:
· The expansion of the Wealth Planning business with the acquisition of Marchant McKechnie in East Yorkshire completed in Q4 2018, in addition to the purchase of Oxford-based Thomas & Co in early Q1 2019, have further bolstered the Group's wealth planning foundation. The acquisitions, which are performing to plan, broaden Kingswood's UK footprint and the Group continues to pursue additional accretive investments across the UK and internationally with a pipeline in excess of £100 million under evaluation. In order to execute on this pipeline, the Company is exploring opportunities to source additional funding via institutional investors to meet its requirements;
· Embarking on an enhanced strategy to provide existing and new clients unprecedented access to best in class investment products across equities, fixed income and alternatives, managed by best in class global investment managers. Many of these products are currently solely available to institutional investors;
· The appointment of Richard Jeffrey as Chairman of the Investment Committee and Richard Klein as Head of Alternatives and Distribution. The firm is building a robust Investment Committee process with a group of highly experienced investment professionals, under the stewardship of Mr Jeffrey. Mr Klein joined to lead and expand Kingswood's alternative product offerings for distribution to the firm's growing client base;
· Setting its sights on US expansion and growing investment distribution channels for its products and to support its US growth efforts, Kingswood has appointed Najib Canaan as US CEO. Mr Canaan's extensive knowledge and experience will be invaluable as Kingswood grows in the US;
· Launching an enhanced Managed Portfolio Service ('MPS') which is available via industry platforms used by wealth planners across the UK. The MPS offering provides intermediaries with a discretionary managed, risk-rated investment solution for their underlying clients;
· Expanding its product offering particularly in real estate, Kingswood recently signed a cooperation agreement with its affiliate Moor Park Capital Partners LLP, an independent pan-European real estate investment firm that creates a partnership to broaden Kingswood's alternative investment product offering to its clients; and
· Further commitment to broadening its client offering with a range of holistic, value added client services through its Kingswood affiliates including the provision of personal taxation compliance services, incorporating the preparation of annual tax returns, tax planning and advisory support. Kingswood, via its affiliates, also now offers a range of services for small and medium-sized businesses including the provision of accounting and annual tax compliance as well as corporate finance offerings.
Patrick Goulding, Group CFO and CEO of Kingswood's operating platforms, commented: "We have a strong competitive advantage with our integrated Wealth Planning and Investment Management platform. We plan to leverage the platform to its full potential and are looking to expand our current product offering with turn-key opportunities such as mortgages, cash management and lending products, including the launch of Kingswood labelled products in partnership with best in class industry expertise."
On the corporate side, the following changes have taken place since the start of 2019:
· The election of the first group of Managing Directors and Partners. Through the Group's 2019 LTIP plan, Partners will have a significant portion of their compensation aligned with Group targets, with some subject to Group target EBITDA and TSR performance conditions and some subject to Group target EBITDA and individual portfolio targets. Additional awards will be made in due course, including to executive and some of the non-executive members of the Board;
· Commitment to delivering shareholders and clients with high quality reporting and information, with a focus on partnering with best in class service providers to deliver non-core operating functions. Kingswood has recently entered into an agreement with Global Prime Partners (GPP) - a third party clearing, custody and financial services provider - who will shortly take over the Group's investment management operations; and
· With immediate effect Jonathan Massing has assumed the role of non-executive Deputy Chairman, given Gary Wilder's installation as Group CEO earlier this year.
Buzz West, Board Chairman of Kingswood, concluded: "We have made huge strides in expanding and reinforcing the Kingswood brand in the UK over recent months and we see the US as a really exciting market. I am pleased with the future direction of the Company and a strong foundation is now in place from which to grow the platform and add value for shareholders. I look forward to working with the Board and executive team to deliver our strategy."
Trading Update and Final Results
Current year FY19 trading remains in line with management's expectations. The Company expects to report its final audited results for the year ended 31 December 2018 in mid April 2019. The Company expects to report revenue and gross profit margin broadly in line with expectations, with adjusted and reported profit before tax expected to be below previous expectations, as a result of additional investment expenditure incurred across the Group to restructure and strengthen the Kingswood platform. Cash and cash equivalents (unaudited) at 31 December 2018 were c£2.4m, and net cash (unaudited), including deferred consideration in excess of 1 year liability in relation to the Marchant McKechnie H2 FY18 acquisition, stood at c.£1.2m as at 31 December 2018.
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
For further details, please contact:
Kingswood Holdings Limited
+44 (0)20 7293 0730
Gary Wilder / Patrick Goulding
finnCap Ltd (Nomad and Broker)
+44 (0)20 7220 0500
Ed Frisby / Scott Mathieson / Anthony Adams (Corporate Finance)
Tim Redfern / Richard Chambers (ECM)
Greentarget (for media)
+44 (0)20 7324 5480
Kingswood Holdings Limited (trading as Kingswood) is an AIM-listed (AIM: KWG) integrated wealth management group, with more than 4,500 active clients and c.£2 billion of Assets Under Management and Advice. It has a growing network of offices in the UK including London, Manchester, Cheltenham, Maidstone, Worcester, Beverley and Abingdon, and an office in Johannesburg, South Africa.
Kingswood offers a portfolio of services to its clients, which range from private individuals to some of the UK's largest universities and institutions, including investment advice and management, personal and company pensions, wealth planning, and stockbroking. Kingswood is focused on becoming a leading player in the wealth management market through targeted acquisitions in the UK, with the ultimate goal of creating a global business through strategic partnerships and its ambition is to gain a foothold in the US market in the near future.
This announcement contains certain statements that are forward-looking. These include statements regarding our intentions, beliefs or current expectations and those of our officers, Directors and employees concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business we operate. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of preparation of this document and, unless otherwise required by applicable law, the Company undertakes no obligation to update or review these forward-looking statements. Nothing in this announcement should be construed as a profit forecast. The Company and its Directors accept no liability to third parties in respect of this document save as would arise under English law.
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