Kingswood results show £3.7bn increase in Group AuA/M and UK operating profit up £5.4m

by | May 24, 2023

 

  • 2022: exceptional progress against its strategic objectives and its medium-term targets.
  • Group AuA/M of £10.5bn at December 2022 increased by £3.7bn compared to the prior year. The completion of Barry Fleming Partners and Moloney Investments Ltd (MMPI) acquisitions in Q1 2023 supported a further increase in AuA/M to £11.4bn at March 2023.
  • Kingswood completed the acquisition of ten businesses in the UK in 2022. Collectively, these businesses have added £1.7bn AuA, 28 advisers and £11.8m revenue to the Group in 2022 and will add a further £6.0m incremental revenue in 2023.
  • The Group FY2022 operating profit is £8.7m, an increase of £2.3m year on year.
  • UK reports operating profit of £11.5m an increase of £5.4m year on year.
  • Kingswood client retail assets under our own Management (AuM) in IBOSS AM MPS and Personal DFM now total £1.0bn, up from £565m at December 2021.

Kingswood Holdings Limited (AIM: KWG), the international, fully integrated wealth and investment management group, is pleased to announce its audited financial results for the year ended 31 December 2022.

David Lawrence, Kingswood Chief Executive Officer, commented:  “I am delighted to present our financial results for 2022 which was another transformative year for the Kingswood Group.  As reported in our trading statement in March, Kingswood continues to make strong progress across organic growth, positive net asset flows and acquisition activity, contributing to record levels of operating profit for the Group in 2022. I believe that successful firms in this sector will be client centric, colleague focused and embracing of technology. These three elements are present in all of our drivers of value and underpin the results now being seen.”

 Strategic Highlights

  • Group AuA/M of £10.5bn at December 2022 increased by £3.7bn compared to the prior year. The   completion of Barry Fleming Partners and Moloney Investments Ltd (MMPI) acquisitions in Q1 2023 supported a further increase in AuA/M to £11.4bn at March 2023.
  • Completed the acquisition of 10 UK IFA businesses in the year under review, having completed five acquisitions in 2021. The 15 acquisitions have added £11.8m of additional revenue in 2022.
  • UK Assets under Advice and Management (AuA/M) increased by £3.2bn, which includes £1.5bn from the acquisition of Metnor Holdings Limited on 31 December 2021, to £8.1bn in 2022 driven by inorganic growth and positive net inflows across all business divisions.
  • Our UK market leading ‘Kingswood Go’ app, launched in March 2022, has over 6,000 registered clients and we continue to focus on enhancing the client experience and developing the technology to provide additional in-app services.
  • As we build a business more representative of our society, good progress has been made to address diversity imbalances across the organisation – 40% of UK adviser hires in 2022 were female compared to an adviser community where c.19% of our advisers are female.
  • Kingswood US added 21 new registered representatives, which further expanded our US footprint and grew our total AuM/A in the US division by $0.3bn to $3bn (£2.4bn).  The US Investment Banking operating segment recruited two new high quality investment banking groups in 2022 focused on mid-market equity capital markets.

2022 Financial Highlights

  • Group Revenue was £145.9m, £3.7m or 2.5% lower than 2021 as macro-economic headwinds and market volatility led to a slowdown in capital market activity in the US Investment Banking business.
  • 88% of UK’s revenue is recurring in nature, providing a strong, annuity-style fee stream. Investment Banking fees are a larger portion of Kingswood US revenues, and transactional in nature, which means that recurring revenue in the US was 15%. Combined, Group recurring revenue was 32% compared to 19% in 2021.
  • Group Operating Profit of £8.7m was £2.3m higher than 2021.

David Hudd, Kingswood Chairman, commented: “I am pleased to report that 2022 has been another year of outstanding performance by the Kingswood Group.  Despite challenging market conditions, we have made good progress against our UK inorganic growth strategy and have also generated organic growth across the Group. The business delivered record levels of operating profit and completed a further 10 acquisitions in the year under review.  On behalf of the Board, I would like to thank our management team and all our colleagues for their effort, focus and commitment to achieving our goals in what has continued to be a challenging operating environment.”

Prospects

Our near-term target remains building our AUA/M to in excess of £10bn in UK&I and £12bn for the Group.  With the full year effect of the acquisitions made to date, current Group FY2023 run rate operating profit is approximately £14.7m.

The Group continues to enjoy strong long term investment support from Pollen Street Capital, KPI Nominees and other minority investors which has fuelled its growth to date. It continues to explore sources of additional investment from both public and private sources to maintain a trajectory of accelerated growth.

The growth opportunity for Kingswood remains strong and through organic growth and further acquisitions (where Kingswood has a strong pipeline), we are building a trajectory to deliver an operating profit in excess of £20m.

An abridged presentation of Kingswood’s results and strategic direction is available on the website https://www.kingswood-group.com/financial-reports/

The annual report is available and can be viewed or downloaded from the Company’s website: https://www.kingswood-group.com/financial-reports/

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