viewKingswood Holdings Limited

European Wealth Group poised to enjoy the benefits of recent restructuring

2017 was a year of significant change for European Wealth and management believes it has addressed the key issues faced since group's inception

Growing piles of money
The group continues to focus on three inter-related business segments: investment management, financial planning and private client stockbroking

European Wealth Group Limited (LON:EWG) saw a 13% increase in assets under management (AUM) in 2017.

AUM at the end of 2017 stood at £1.7bn, up from £1.5bn a year earlier, driven by an inflow of funds to the fixed-income division.

READ: European Wealth Group seeing benefits already from recent restructuring

The year saw an increase in revenue to £10mln from £9.4mln the year before.

Over the last seven months, the group has taken £1.4mln of costs out of the operating business and markedly reduced the headcount, but the restructuring comes at the cost of one-off up-front charges

The group loss for the year widened to £5.9mln from £757,000 the year before, largely as a result of one-off restructuring costs and a substantial write-down of £2.3mln – in the value of the group’s intangible assets, notably goodwill - the value inherent in the business over and above its physical assets - attached to the foreign subsidiaries in Gibraltar and Switzerland.

"Our activities have been firmly focused on creating a strong platform for growth. We have removed the debt, in turn bringing cash onto the balance sheet, reduced our operating costs, and have invested in software to ensure that our business reflects the needs of our customers,” said Marianne Ismail, the group chief executive.

READ: European Wealth Group confirms Marianne Ismail as chief executive officer​

“With this in mind we are confident that the losses incurred during the period due to these activities will position European Wealth ideally to create value for shareholders both organically and via M&A [mergers 7 acquisitions] and we hope that the benefits will begin to be reflected in our interims,” Ismail added.

"Our M&A strategy remains central to our business. We have stringent criteria to ensure that we deliver value accretive acquisitions and with this in mind, the decision was made not to pursue the acquisition of Newbridge Securities in the USA; however, there is a significant market opportunity, given the fragmented nature of the global wealth management industry, and with this in mind we look forward to updating the market on future opportunities at the appropriate time," she said.

READ: European Wealth Group's acquisition of Newbridge called off by mutual consent​

In a separate announcement, the asset management group said it had strengthened the board with the appointment of City veteran David Hudd as a non-executive officer.

Hudd is currently the chief executive officer of law firm Hogan Lovells.

“He brings a wealth of experience within the legal and financial sectors which will be of great value as we focus on driving growth. We aim to achieve this both organically, and by way of acquisition to capitalise on opportunities in the global wealth management industry," said Buzz West, the chairman of EWG.

Quick facts: Kingswood Holdings Limited

Price: 15 GBX

Market: LSE
Market Cap: £32.54 m

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