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Kingswood Holdings Limited: DEEP DIVE

Kingswood Holdings expects 'sustained earnings growth' after major overhaul

Kingswood has a new management team in place to implement the group’s three-year growth strategy.
OVERVIEW: KWG The Big Picture
The plans to expand its product offering
  • Three-year growth plan recently approved

  • Further UK acquisitions eyed, plans for US expansion

  • Platform to deliver 'sustained earnings growth' after restructuring 


What Kingswood does:

Kingswood Holdings Ltd (LON:KWG), formerly known as European Wealth Group, is a wealth management and financial planning services business.

Its services include stockbroking, investment advice, corporate pension advisory, tax planning, employee benefits, shareholder protection and treasury management.

The investment management division has three trading subsidiaries – European Investment Management Limited, European Wealth Trading Limited and European Wealth (Switzerland) SA.

The financial planning division includes European Financial Planning Limited.

What it owns:

Kingswood owns Marchant McKechnie Independent Financial Advisers Ltd, which provides pensions, investments, and tax planning services. It bought the business for £4mln late last year.

In February, Kingwood acquired financial advisory firm Thomas & Co Financial Services for up to £3.3mln Based in Abingdon, Thomas & Co has around 500 clients and £150mln of assets under advice.

Inflection points:

  • Kingswood has a new management team in place to implement the group’s three-year growth strategy. Gary Wilder took over as group chief executive at the beginning of the year and Patrick Goulding joined as group chief financial officer and head of the operating platform.The group said its new strategy has “solidified a number of strategic initiatives” designed to enhance client yield and stimulate growth
  • Kingswood believes its core wealth planning and investment management platform is in a position to deliver "sustained earnings growth" after a "period of significant change"
  • Following its name change last September, Kingswood launched a new website in mid-April.
  • The company has set its sights on US expansion and growing investment distribution channels for its products. It has appointed Najib Canaan as the chief executive of the US division to oversee the expansion.
  • Kingswood is continuing to pursue targeted acquisitions in the UK following the purchase of Marchant McKechnie and Thomas & Co.
  • The group has been expanding its product offering, particularly in real estate, having recently signed a cooperation agreement with independent pan-European real estate investment firm, Moor Park Capital Partners LLP. It plans expand its offering further in areas such as mortgages, cash management and lending products.
  • Last year Kingswood generated revenue of £8.8mln and an adjusted loss of £8.8mln. As of December 31, it had assets under management of £800mln.

Blue Sky:

Analysts at finnCap said: “A core platform has now been put in place that is able to deliver sustained growth from organic and acquisitive AUM growth, backed by a strategy to build a nationally recognised brand with overseas appeal.

“AUM-driven growth provides huge scale opportunities since incremental revenues can be delivered from an existing cost base and total AUM now stands at £1.9bn across 7,000 active clients.

“Recent hires bolster existing management expertise and we estimate 2019E revenue to grow 34%, delivering EBITDA of £1.1mln, a return to positive earnings and the first step toward accelerated growth.”

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Kingswood has a new management team in place to implement the group’s three-year growth strategy.

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