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Kingswood Group revenue up 38 per cent as share price rises 32 per cent

Kingswood Holdings has announced its audited financial results for the year ended 31 December 2023.

Group Revenue was GBP86.2 million for the year ended 31 December 2023, increasing GBP23.6 million or 37.7 per cent compared to the prior year

UK & Ireland (UK&I) revenues increased to GBP46.6 million, a 37.5 per cent increase year on year, reflecting resilience to market headwinds and the benefit of acquisitions in the current and prior periods, the firm says.

US revenues (the Company has a 50.1 per cent interest in Kingswood US, LLC which accordingly is fully consolidated into Group reporting) of GBP39.6 million increased 37.8 per cent year on year.

Group operating profit from continuing operations was GBP10.8 million, an increase of GBP3.0 million or 37.9 per cent compared to 2022. 

UK&I operating profit of GBP8.9 million, increased by GBP3.2 million or 56 per cent

US operating profit of GBP1.9 million from continuing operations, a GBP0.2 million or 11 per cent decrease year on year

The firm writes: “In the interim results announcement of 29 September 2023, we referred to our expected pro-forma Operating Profit for the full year to be c.GBP13.6 million. This was after adjustments for MMPI and Baseplan Limited. The comparative Operating Profit for the full year (on the same pro-forma basis) was GBP12 million . The difference between the GBP10.8 million out-turn and the comparative GBP12 million forecast at half-year was due to a delay in revenue receipts by Kingswood Investments in the US, a change to the intended approach to advice pricing harmonisation in the UK and a slower market recovery than expected. Whilst below stated management expectations at the interim results, operating profit was up over 37 per cent on prior year.”

Group FY2023 statutory Loss before Tax of GBP13.3 million was GBP2.0 million higher than the prior year largely due to the following:

The Group incurred GBP7.3 million of finance costs during the year on debt facility drawdowns, reflective of our strategy to use leverage as an accelerant for growth.

Non-recurring costs, including broker fees on M&A transactions and costs incurred to reposition the business, totalled GBP4.7 million for the year, a decrease of GBP1.6 million compared to the prior year.

Non-cash impacting items of GBP10.4 million were GBP1.9 million higher than FY2022 and included amortisation of intangible assets, finance costs recognised on the unwinding of deferred consideration and preference share dividends.

At 31 December 2023 UK&I comprised GBP3.5 billion AuM (Assets under Management) and GBP5.9 billion AuA (Assets under Advice), with growth of GBP0.3 billion and GBP0.3 billion respectively in 2023, and AuA in Ireland of GBP0.7 billion.

The firm writes that UK AuM in its market leading IBOSS managed portfolio service ended the year at GBP2.1 billion, up GBP0.4 billion or 25 per cent on the prior year.

US AuA of GBP2.9 billion at 31 December 2023 was GBP0.5 billion, or 22.0 per cent, higher year on year driven by growth in the number of authorised representatives.

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