CompaniesMar 15 2023

Kingswood expects UK annual profits to grow by 54%

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Kingswood expects UK annual profits to grow by 54%
Kingswood chief executive, David Lawrence

In a trading update today (March 15) Kingswood Holdings said it expects its UK revenues to increase by 54 per cent this year to approximately £33.8mn. 

The UK increase is the result of a number of acquisitions in 2022, with the group completing 10 UK acquisitions in total during the year.

Overall, the group expects total revenue to decrease by 3.9 per cent year-on-year to £143.6mn.

This compares to a revenue increase of 488 per cent in 2021, as the group benefited from a string of acquisitions.

This is due to an expected 14 per cent decrease in revenue for its US business to £110mn.

Kingswood has said this drop is due to lower than expected capital markets activity affecting US investment banking revenues and the timing of a large one-off, high margin US transaction that it expected to report in 2022 but will now recognise in 2023 instead.

Despite this drop in revenue, the group expects its operating profit for 2022 to be £8.5mn, an increase of £2.2mn or 34 per cent. Kingswood noted however, that this is below its board’s expectations. 

Operating profits for its UK business is expected to jump 84 per cent year-on-year to £2.8mn, in line with board expectations. 

Kingswood said its near-term goal is to build assets under management of more than £10bn in the UK and Ireland and £12bn for the group as a whole. 

The company said it currently has four potential acquisitions in exclusivity and “a number of others in advanced negotiations”.

“We continue to enjoy a strong and healthy pipeline of acquisitions and have capacity with our debt facility to support this. However, we are also considering sources of new capital to ensure that we have a full range of options available to us,” Kingswood said in today’s trading statement.

Earlier this month, the group confirmed discussions about a potential sale of its UK business after it was suggested it could fetch £250mn.

Chief executive, David Lawrence did not mention talks of a sale in today’s update and instead said “the strategy and trajectory of the business continues as planned”.

“Our recent entry into the Irish market is a further demonstration of Kingswood's progress and commitment to our future growth. We expect to announce further acquisitions later in 2023,” Lawrence said.

UK assets under management as of March 2023 sat at £9bn following the acquisition of Barry Fleming Partners and Moloney Investments Ltd.