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    EWG   GG00BKY4K072

KINGSWOOD HOLDINGS LIMITED

(EWG)
  Report
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07/26Kingswood Announces CFO Changes
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Kingswood : 2020 Kingswood Group Annual Results

06/17/2021 | 12:58am EDT

Company Registration No. 42316 (Guernsey)

KINGSWOOD HOLDINGS LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

2

KINGSWOOD AT A GLANCE

Kingswood Holdings Limited (the "Company") and its subsidiaries (the "Group" or "Kingswood") is an international, fully integrated wealth and investment management business listed on the AIM market of the London Stock Exchange under ticker symbol (AIM: KWG).

Kingswood offers a suite of wealth planning and investment management solutions to its clients, which range from private individuals to some of the UK's largest universities and institutions. Kingswood is focussed on becoming a leading participant in its sector through targeted acquisitions in the UK and US, complemented by strong organic growth to create a global wealth management business.

The Group's core proposition centres on primary offerings in wealth planning and investment management to deliver best in class financial solutions for clients.

The Kingswood Board have identified six key components to the Group's strategy.

The Kingswood Group today comprises:

Note: adviser and client figures disclosed are for UK-business only

It has a growing network of offices across the UK including Abingdon, Beverley, Darlington, Derby, Egham, Grimsby, Hull, Lincoln, London, Maidstone, Newcastle, Sheffield (two), Worcester and York along with offices in Johannesburg, South Africa and Atlanta, New York and San Diego in US.

3

2020 HIGHLIGHTS

  • Several key acquisitions were completed in 2020, significantly expanding Kingswood's UK and US footprints
  • In the UK
    • Sterling Trust was acquired in June 2020, a transformative transaction which added 22 financial planners advising/managing £1.2 billion of client assets from five locations across Yorkshire and the North East of England
    • In November, the Group acquired Regency Investment Services, a high-quality IFA business which operates from Egham, Surrey and provides independent financial advice to individuals and corporates with six IFAs advising/managing £320 million on behalf of circa 1,000 clients
  • In the US
    • Completed the acquisition of Chalice based in San Diego, CA, USA which provides full-service securities brokerage, advisory and investment banking services to a broad client base
    • Formalised a strategic partnership with Mike Nessim and his Manhattan Harbor Capital platform, enabling the consolidation of Kingswood's US interests - including Chalice - into a 50.1% share in a nationwide broker dealer, advisory and investment banking platform re-branded as Kingswood US
    • This investment is a major statement of intent regarding our US expansion supported by a commitment to contribute up to $8.0 million (£5.7 million) additional growth equity before December 2022 to further build US distribution channels
  • Kingswood continued to bolster its management team throughout the year and in December 2020 appointed David Lawrence as UK CEO to lead the business on the next stage of its growth journey
  • £44.8 million growth capital contributed by Pollen Street Capital to support Kingswood's acquisition and growth initiatives
  • Launch of the Kingswood Academy, a 24-month programme to nurture talented people and provide them with the skills needed to provide effective financial advice and develop a successful career in wealth management. The first 4 participants joined the academy in January 2021

Group financial highlights

£'000 (unless otherwise stated)

2020

2019

2018

Total Revenue

25,477

10,053

7,506

Recurring Revenue %

61%

83%

83%

Operating Profit

862

211

(1,597)

Total Equity

50,152

28,201

27,243

AUA/AUM (£ millions)

5,912

2,471

1,649

# of Advisers - UK

64

40

23

# of Authorised Representatives - US

206

-

-

4

CHAIRMAN & GROUP CHIEF EXECUTIVE OFFICER STATEMENT

Dear Shareholders:

Your continued support over the past challenging year is much appreciated. Thankfully, there is now light at the end of the tunnel with the vaccination programme progressing well, both here in the UK and across the US. We can now begin to put the uncertainty and dislocation behind us and look forward to a brighter 2021 and beyond.

We are truly in awe of the sacrifices made by so many. By our healthcare workers to protect those impacted by COVID-19; by families unable to be with their loved ones in their hour of need; by workers who risked their health to keep essential services operating. We can never truly appreciate their immense sacrifice and the strength in adversity of the human spirit.

It was a difficult year for business, especially one like ours which is built on personal relationships - those one on one, face to face connections between our team and their clients. We all quickly adapted to Zoom or other means of communication, but it is still quite impersonal and makes it especially difficult to build new relationships.

It was also difficult for the Kingswood family, and we learned a lot over the past year about the power of resilience - tackling challenges by staying strong, maintaining belief in our vision and strategy, and focusing on the outcome. It drove the Kingswood family forward every day and we are eternally grateful to every member of the team for their endeavour and commitment in dealing with our clients' affairs in these difficult times. We are a better company for it.

Despite these challenges, there are many positives to take from 2020 - most notably the many talented new colleagues who joined across the UK and US including through the Sterling, Regency, Chalice and Manhattan Harbor transactions. We are delighted that David Lawrence joined us as UK Chief Executive Officer to lead the UK business on the next stage of its growth journey. Patrick Goulding has been an integral leader of our business over the last two years as we built a foundation for growth, and the Board is pleased he agreed to assume the Group Chief Financial Officer role on a full-time basis with the Kingswood business now of a size and scale that requires his full-time efforts in this critical function.

The UK wealth management sector continues to exhibit strong, long-term growth characteristics supported by demographic trends, a complex regulatory environment, and the ongoing consolidation within a very fragmented industry and Kingswood is actively seeking to take advantage of this through its acquisition strategy. We can offer a seamless transition process, centralised support services (like HR, compliance, and finance), and a central investment proposition that frees advisers of the acquired firm to focus on their clients. We are pleased to have developed and grown our UK platform in recent years with the acquisition of five financial planning businesses across the UK since 2018, including the acquisition of Sterling Trust and Regency Investment Services in 2020.

In the UK, Kingswood now has 64 financial advisers and investment managers operating across the country supporting our retail and institutional client base and are projected to deliver strong, sustainable EBITDA on an annual basis once acquisitions are fully integrated.

As the largest global wealth management market, the Board also sees the US as a major growth opportunity and a market where we can differentiate ourselves from our peers. The market is still significantly growing year on year, with 9% compound historical annual growth. We have therefore been keen to expand in that market for some time. In Mike Nessim, we have identified a quality partner with shared values to help implement and drive our US growth strategy. We have no doubt the capital we deploy will drive exceptional organic growth across the Kingswood US platform and reflects the desire of both parties to develop a highly accretive global platform providing clients access to investment products and services in major US and UK markets.

This enhanced US investment will further cement a key, strategic foothold in the largest global wealth and investment management market, differentiate us from our peers and support our aspirations of asset linking and cross-selling services. Mike and his team will oversee acquired entities and focus on delivering Kingswood US's full-service brokerage, investment advisory and investment banking proposition to clients.

Our partnership with Pollen Street Capital grows in strength on many levels, and to date has provided growth equity of £44.8 million to support our strategy. We now have 206 people across the globe advising/managing £6.1 billion of client assets - all achieved during a global pandemic. We have come together by staying apart and are now ready to embark with renewed vigour on our forward journey.

We hope you enjoy reading our annual report and hearing from our business leaders. Thank you for your continued support and trust.

Kenneth 'Buzz' West

Gary Wilder

Chairman

Group Chief Executive Officer

June 2021

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Kingswood Holdings Limited published this content on 17 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 June 2021 04:57:04 UTC.


ę Publicnow 2021
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Financials
Sales 2021 46,9 M 65,3 M 65,3 M
Net income 2021 4,43 M 6,16 M 6,16 M
Net cash 2021 2,00 M 2,79 M 2,79 M
P/E ratio 2021 -
Yield 2021 -
Capitalization 58,6 M 81,4 M 81,6 M
EV / Sales 2021 1,21x
Capi. / Sales 2022 1,05x
Nbr of Employees 206
Free-Float 24,6%
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Mean consensus BUY
Number of Analysts 1
Last Close Price 27,00 GBX
Average target price 40,00 GBX
Spread / Average Target 48,1%
Managers and Directors
Gary Spencer Wilder Group Chief Executive Officer & Director
Patrick Joseph Goulding Group Chief Financial Officer
David Glyn Trefor Hudd Chairman
Harriet Griffin Chief Operating Officer
Rupert Mark Thompson Chief Investment Officer & Managing Director
Sector and Competitors