Wealth manager and Financial Planner Kingswood made a pre-tax loss of £3.7m in the first half of the year due mainly to the £4.1m cost of acquisitions in the period, the firm reported today.

The private equity-funded company has recently been on a major acquisition spree and is planning 12 further acquisitions - 9 in the UK and 3 outside the UK.

Its latest UK acquisition was Lincolnshire Chartered Financial Planner firm Admiral Wealth Management in August.

Despite the half year loss the firm has £24.7m in cash in its war-chest, with help from private equity firms Pollen Street Capital and KPI, and says it has a “robust foundation” to deliver further growth.

The company believes operating profit is a better measure of its growth than pre-tax profit figures. The firm made an operating profit of £3.05m in the period compared to a loss in the same period last year of £1.27m.

The firm said its half year pre-tax loss of £3.7m reflected £4.1m of acquisitions costs including £1.1m of amortisation and depreciation, £0.8m of finance costs and £0.7m of business re-positioning and transaction costs.

The group reported revenues of £61.5m in the period (up 646% on the previous year) and more than doubled its number of UK advisers to 64. The firm has Assets Under Advice or Management of £6.2bn. 

Despite the pre-tax loss the firm's acquisition drive will continue. 

The firm says it has signed heads of terms, and is in exclusive discussions, with a further 9 UK businesses and 3 businesses outside the UK.

In 2020 the firm acquired Sterling Trust, a major regional IFA platform, and Regency Investment Services, an IFA in Greater London.

David Hudd, Kingswood group chairman, said: "We are pleased with the performance of the business in the first half of 2021.  It has been a period of consolidation which has seen both the UK and US divisions report material improvements to operating profit.  

“Since I have been acting chairman, I have been impressed with the dedication and commitment of our employees and leadership team.  Not only have we minimised the effect of Covid-19 on the group, but we are also making tremendous progress on our strategic priorities.  I would like to place on record my thanks to Kenneth "Buzz" West, our former chairman, for his contribution to the business and also to welcome Mike Biggin and the Admiral team to Kingswood."

Gary Wilder, group CEO, said: "The financial results for the first half of 2021 are very pleasing. We have been able to deliver growth across all our divisions in wealth planning, investment management, and the US, under the superb leadership of David Lawrence (former head of Schroders Personal Wealth) in the UK and Mike Nessim in the US, supported by all of our wonderful and committed staff on both sides of the Atlantic. 

"Kingswood remains focussed on building its long-term value strategy, centred around vertical complementary growth business lines in the international independent retail wealth and investment management sectors. With the acquisition of Admiral Wealth Management in the UK in August and a strong pipeline of UK and international acquisition opportunities, the second half of 2021 promises to be another busy and exciting period for the group. With the financial and strategic support of Pollen Street Capital and KPI, Kingswood will continue to capitalise on the consolidation, acquisition and integration opportunities across international wealth and investment management markets."

Kingswood has 16 UK regional network offices across the country. The US team has 207 authorised representatives in 11 States across the country, with 3 key hubs in New York, Atlanta and San Diego.