Half-year Report
Kingswood Holdings Limited ("Kingswood") remains in a strong position and has delivered significant growth in the first half of 2021, with a robust foundation to deliver further growth
o A period of consolidation and growth for the business, with the Group reporting £61.5m revenues, £3.1m Operating Profit and assets under advice/management of £6.2bn. UK and US Divisional Operating Profit for the period is £5.3m
o Kingswood continues to build a leading international integrated wealth and investment management business and was delighted to recently complete the acquisition of Admiral Wealth Management in the UK in August 2021. Inorganic growth remains a key focus and Kingswood has signed Heads of Terms, and is in exclusive discussions, with a further 9 UK businesses and 3 businesses outside the UK
o The UK Wealth Management and Investment Management Division delivered £10.6m revenue and £2.8m Operating Profit in the first six months of 2021, with Operating Profit growing 173% year over year
o The US Wealth and Investment Management Division delivered £50.9m revenues and £2.5m Operating Profit in the first six months of 2021
Kingswood Holdings Limited (AIM: KWG), the international, fully integrated wealth and investment management group, is pleased to announce its unaudited interim financial results for the half year ended 30 June 2021.
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."
Market Update
Strategic Highlights
Gary Wilder, Group CEO commented : "Kingswood continues to make major forward steps in achieving its strategy to build a best-in-class international wealth management business for the mass affluent market. We are now benefiting from our acquisition strategy and successful entry and consolidation of our position in the attractive high growth US market. 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 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."
Financial Highlights
£'000 (unless otherwise stated) |
2021 |
2020 |
Change % |
Wealth Management |
8,307 |
4,678 |
78% |
Investment Management |
2,312 |
2,135 |
8% |
Kingswood US |
50,922 * |
1,438 |
3441% |
Total Revenue |
61,541 |
8,251 |
646% |
Recurring Revenue |
19% ** |
84% |
|
Kingswood UK (WM + IM) |
2,830 |
1,035 |
173% |
Kingswood US |
2,519 |
(28) |
|
Division Operating Profit |
5,349 |
1,007 |
431% |
Central Costs |
(2,294) |
(2,274) |
1% |
Operating Profit |
3,055 |
(1,267) |
n/a |
Total Equity |
43,315 |
32,886 |
32% |
AUA/AUM (£ millions) |
6,172 |
4,718 |
31% |
# of UK Advisers |
64 |
30 |
34 |
* £41.8m Investment Banking Fees and £9.1m Wealth Management Revenues. ** 60% excl. Inv. Bank Fees
The interim report will be available to be viewed or downloaded from the Company's website.
For further details, please contact:
Kingswood Holdings Limited
Gary Wilder / David Lawrence
+44 (0)20 7293 0730
Peel Hunt LLP (Nomad and Broker)
James Britton / Rishi Shah
+44 (0)20 7418 8900
Greentarget (for Kingswood media)
Jamie Brownlee / Alice Gasson / Ellie Basle
+44 (0)20 7324 5498
Jamie.Brownlee@greentarget.co.uk
About Kingswood
Kingswood Holdings Limited (trading as Kingswood) is an AIM-listed (AIM: KWG) international fully integrated wealth management group, with around 8,000 active clients and £6.2bn of Assets under Advice and Management. It has a growing network of offices in the UK including Abingdon, Beverley, Darlington, Derby, Grimsby, Hull, Lincoln, London, Maidstone, Newcastle, Sheffield (2), Worcester and York with offices in Johannesburg, South Africa and Atlanta, New York and San Diego in the US.
Kingswood offers a range of trusted investment solutions to its clients, which range from private individuals to some of the UK's largest universities and institutions, including investment advice and management, personal and company pensions and wealth planning. Kingswood is focused on becoming a leading player in the wealth and investment management market through targeted acquisitions in the UK and US, creating a global business through strategic partnerships.
Company Registration No. 42316 (Guernsey) |
|
KINGSWOOD HOLDINGS LIMITED |
|
CONSOLIDATED INTERIM FINANCIAL STATEMENTS |
|
FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021 |
KINGSWOOD HOLDINGS LIMITED
CONTENTS
| Page |
| |
Financial and Operational Review | 1 - 2 |
| |
Interim Consolidated Statement of Comprehensive Income | 3 - 4 |
| |
Interim Consolidated Statement of Financial Position | 5 - 6 |
| |
Interim Consolidated Statement of Changes in Equity | 7 - 8 |
| |
Interim Consolidated Statement of Cash Flows | 9 |
| |
Notes to the Interim Consolidated Financial Statements | 10 - 30
|
KINGSWOOD HOLDINGS LIMITED
FINANCIAL AND OPERATIONAL REVIEW
FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021
Group Review: Gary Wilder Kingswood Group CEO |
|
After such disruption to personal and professional lives throughout 2020 and the beginning of 2021 it is pleasing to see that the re-opening of the global economy remains on track as COVID-19 vaccination rates climb. I, like all of us, hope that current vaccines continue to prevent the spread of more contagious COVID-19 variants. At a macro-economic level, the global economy in 2021 is set to expand at its strongest post-recession pace in 80 years with sharp re-bounds in both the UK and US economies. Equities in the US, UK, and Europe have returned double digit growth year to date in 2021. |
|
With this backdrop, Kingswood has delivered an exceptional first half performance. In David Lawrence and Mike Nessim and their teams, we have leadership that is driving tangible results and executing our long-term strategy to be a leading participant in wealth & investment management in the UK, US and Internationally. The UK advice market remains ripe for ongoing consolidation, and we have built a health pipeline of acquisition opportunities in the UK, the US and further afield. |
|
Financial Performance |
|
During the period, total Group revenue was £61.5m, a 646% increase on prior year. Wealth Planning revenues of £8.3m grew 78% year over year and Investment Management revenues of £2.3m grew 8% year over year. US revenues of £50.9m performed well mainly from EF Hutton Investment Banking services which benefitted from strong capital market activity. |
|
Operating Profit for the period to 30 June 2021 was £3.1m, an improvement of £4.3m over the six months to 30 June 2020 (H1 2020: Operating Loss £(1.3)m). The results reflect solid underlying business dynamics and the impact of acquisitions. |
|
Net Equity as at 30 June 2021 was £43.3m and the company has no debt. Equity includes £37.6m of irredeemable, convertible preference shares issued under the Pollen Street Capital subscription agreement. Backed by the growth equity commitment from Pollen Street Capital, we are fully conscious of the need to drive enhanced, organic financial performance from the up-scaled business. |
|
Kingswood's financial strategy is to maintain a robust and disciplined balance sheet, ensuring no deferred liabilities relating to acquisition activities remain uncovered from a funding perspective, and a disciplined approach to expense management. Our focus is to maximise shareholder returns through Operating Profit growth combined with minimising our weighted average cost of capital. |
|
UK Key Highlights: David Lawrence Kingswood UK Chief Executive Officer |
|
My first nine months as the UK CEO for Kingswood have been spent consolidating progress built in 2020 whilst also charting a course in 2021 and beyond to become a leading UK wealth management business. |
|
We have made key investments in our colleague proposition as we strive to make Kingswood a great place to work. I am also delighted to have appointed Lucy Whitehead to a new role as Chief Client Officer, to ensure we have a single-minded client focus across our core propositions and to improve the overall customer experience. I am similarly delighted to welcome Jon Millam as our new CFO, who joined Kingswood in early August. |
|
By further strengthening my leadership team, and through a number of other key hires, we are now developing strategies and a technology roadmap to build a truly client and colleague centric business and proposition that can actively respond to emerging trends.
|
Acquisition, integration, and growth are stated imperatives for us. We have built some great momentum in developing a pipeline of acquisitions which we hope to convert during the remainder of 2021 and into 2022. The acquisition selection process is rigorous; targets must be singularly dedicated to servicing their clients with the Kingswood model designed to free up adviser time to focus more on clients, and provide a centralised, efficient support infrastructure to manage the routine but time-consuming tasks required across compliance, finance, human resources, risk, and technology. |
|
|
|
Similarly, we have become well-practised at integrating acquired businesses, with specialist teams leading this activity, that will then create a platform for future growth. |
|
|
|
I am confident that a combination of investment and proactive management of our business will serve us well as we go forward. My ambition is to make Kingswood a magnet business for all, not least for firms wanting to take their next step in joining a progressive and capable wealth management business. |
|
|
|
US Key Highlights: Mike Nessim Kingswood US Chief Executive Officer |
|
|
|
Significant progress has been made in the US and I am pleased to report revenues of £50.9m and an Operating Profit of £2.5m. The Independent Broker Dealer (IBD) and Registered Investment Adviser (RIA) businesses has delivered significant growth through the first half of 2021, largely due to the successful execution of several strategic initiatives, with a particular focus on driving organic growth through the recruitment of Independent Advisors. The team now comprises 207 Authorised Representatives managing $2.3bn of client monies across the US. |
|
|
|
Additionally, investment in a robust technology infrastructure has provided advisors with a superior integrated wealth management platform enabling the IBD & RIA to offer a much wider range and more diverse selection of products. Kingswood US has also delivered significant organic growth in recurring revenue streams through the build out of the full-service RIA which currently has 21 advisors managing over $800m. |
|
|
|
We have an extensive pipeline of potential M&A opportunities that can deliver significant inorganic growth to the business. I am particularly focused on acquiring small to mid-sized RIAs and IBDs where Kingswood can create margin accretion through synergies. Currently, two transactions are under exclusive due diligence, representing +$10bn in Assets Under Management. |
|
|
|
The EF Hutton Investment Banking services was a particular driver of revenue growth which benefitted from strong capital market activity. EF Hutton, a global full-service middle market investment bank, now has 30 bankers and 10 support staff and is headquartered in NYC. In the first half of 2021, EF Hutton completed over 41 transactions and raised $1.8bn. |
|
|
|
24 September 2021 |
|
KINGSWOOD HOLDINGS LIMITED
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021
|
Six months to |
|
Six months to |
|
Year ended |
|
||||||||||
|
30 Jun 2021 |
|
30 Jun 2020 |
|
31 Dec 2020 |
|
||||||||||
|
(unaudited) |
|
(unaudited) |
|
(audited) |
|
||||||||||
|
restated |
|
||||||||||||||
|
Notes |
|
£'000 |
|
£'000 |
|
£'000 |
|
||||||||
|
||||||||||||||||
Revenue |
4 |
|
61,541 |
|
8,251 |
|
25,477 |
|
||||||||
Direct expenses |
|
(47,824) |
|
(1,938) |
|
(8,471) |
||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Gross profit |
|
13,717 |
|
6,313 |
|
17,006 |
|
|||||||||
|
||||||||||||||||
Operating staff costs |
|
|
(7,631) |
|
(5,426) |
|
(11,148) |
|||||||||
Other operating costs |
|
(3,031) |
|
(2,154) |
|
(5,052) |
||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Total operating costs |
|
(10,662) |
|
(7,580) |
|
(16,200) |
||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Share of post-tax profits of equity accounted associates |
|
- |
|
- |
|
56 |
|
|||||||||
|
||||||||||||||||
Operating profit / (loss) |
|
3,055 |
|
(1,267) |
|
862 |
|
|||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Non-operating costs: |
|
|||||||||||||||
Business re-positioning costs |
|
(407) |
|
(661) |
|
(1,801) |
||||||||||
Finance costs |
|
|
(840) |
|
(81) |
|
(554) |
|||||||||
|
||||||||||||||||
Acquisition-related adjustments: |
|
|||||||||||||||
Amortisation and depreciation |
|
(1,117) |
|
(785) |
|
(1,822) |
||||||||||
Other (losses) / gains |
5 |
|
- |
|
(10) |
|
1,744 |
|
||||||||
Remuneration charge (deferred consideration) |
12 |
|
(4,145) |
|
(3,059) |
|
(7,254) |
|||||||||
Transaction costs |
|
(274) |
|
(203) |
|
(1,855) |
||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Loss before tax |
|
(3,728) |
|
(6,066) |
|
(10,680) |
||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Tax |
|
|
3 |
|
- |
|
(60) |
|||||||||
|
||||||||||||||||
Loss after tax |
|
(3,725) |
|
(6,066) |
|
(10,740) |
||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Other comprehensive gain / (loss) |
|
368 |
|
- |
|
(855) |
||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Total comprehensive loss |
|
(3,357) |
|
(6,066) |
|
(11,595) |
||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
KINGSWOOD HOLDINGS LIMITED
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (CONTINUED)
FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2021
Loss after tax is attributable to: |
|
||||||||||||
- Owners of the parent company |
|
(4,857) |
|
(6,066) |
|
(11,000) |
|||||||
- Non-controlling interests |
|
1,132 |
|
- |
|
260 |
|
||||||
|
|||||||||||||
Total comprehensive loss is attributable to: |
|
||||||||||||
- Owners of the parent company |
|
(4,489) |
|
(6,066) |
|
(11,855) |
|||||||
- Non-controlling interests |
|
1,132 |
|
- |
|
260 |
|
||||||
|
|||||||||||||
Loss per share: |
|
||||||||||||
- Basic loss per share |
6 |
|
£ (0.02) |
|
£ (0.03) |
|
£ (0.05) |
|
|||||
- Diluted loss per share |
6 |
|
£ (0.02) |
|
£ (0.03) |
|
£ (0.05) |
|
|||||
|
|||||||||||||
The notes on pages 10 - 30 form an integral part of the financial statements |
|
||||||||||||
KINGSWOOD HOLDINGS LIMITED
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
|
30 Jun 2021 |
30 Jun 2020 |
31 Dec 2020 |
|
||||||||
|
(unaudited) |
(unaudited) |
(audited) |
|
||||||||
|
restated |
|
||||||||||
|
||||||||||||
|
Notes |
|
£'000 |
£'000 |
£'000 |
|
||||||
Non-current assets |
|
|||||||||||
Property, plant and equipment |
7 |
|
915 |
576 |
927 |
|
||||||
Right-of-use assets |
8 |
|
2,583 |
2,586 |
2,828 |
|
||||||
Goodwill and other intangible assets |
9 / 19 |
|
46,943 |
41,702 |
47,616 |
|
||||||
Investments |
10 |
|
20 |
416 |
- |
|
||||||
Deferred tax asset |
|
|
392 |
387 |
392 |
|
||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
|
50,853 |
45,667 |
51,763 |
|
||||||||
Current assets |
|
|||||||||||
Trade and other receivables |
|
|
5,067 |
2,764 |
24,204 |
|
||||||
Cash and cash equivalents |
|
|
24,733 |
1,945 |
3,899 |
|
||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
|
29,800 |
4,709 |
28,103 |
|
||||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
Total assets |
|
80,653 |
50,376 |
79,866 |
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
Current liabilities |
|
|||||||||||
|
||||||||||||
Trade and other payables |
19 |
|
20,077 |
6,920 |
12,955 |
|
||||||
Deferred consideration payable |
12 / 19 |
|
900 |
2,197 |
836 |
|
||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
|
20,977 |
9,117 |
13,791 |
|
||||||||
Non-current liabilities |
|
|||||||||||
Deferred consideration payable |
12 / 19 |
|
3,810 |
2,685 |
3,232 |
|
||||||
Other non-current liabilities |
19 |
|
9,834 |
5,688 |
10,802 |
|
||||||
Deferred tax liability |
|
|
1,889 |
- |
1,889 |
|
||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
Total liabilities |
|
36,510 |
17,490 |
29,714 |
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
Net assets |
|
44,143 |
32,886 |
50,152 |
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
Equity |
|
|||||||||||
Share capital |
13 |
|
10,846 |
10,846 |
10,846 |
|
||||||
Share premium |
13 |
|
8,224 |
8,224 |
8,224 |
|
||||||
Preference share capital |
14 / 19 |
|
37,550 |
14,985 |
37,550 |
|
||||||
Deferred share capital |
|
- |
- |
- |
|
|||||||
Other reserves |
|
(459) |
56 |
|
(519) |
|||||||
Foreign exchange reserve |
|
(487) |
- |
|
(855) |
|||||||
Retained (loss) / earnings |
19 |
|
(12,359) |
(1,225) |
(6,159) |
|||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
Equity attributable to the owners of the Parent Company |
43,315 |
32,886 |
49,087 |
|
||||||||
|
||||||||||||
Non-controlling interests |
|
828 |
- |
1,065 |
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
Total equity |
|
44,143 |
32,886 |
50,152 |
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
The notes on pages 10 - 30 form an integral part of the financial statements |
|
|
|
The financial statements of Kingswood Holdings Limited (registered number 42316) were approved and authorised for issue by the Board of Directors, and signed on its behalf by: |
|
|
|
Chairman |
|
Date: |
|
KINGSWOOD HOLDINGS LIMITED
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2021
|
Share capital and share premium |
Deferred share capital |
Preference share capital |
Other reserves |
Foreign exchange reserve |
Retained earnings |
Equity attributable to the owners of the parent Company |
Non-controlling interests |
Total |
|
|||||||||||||||
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|||||||||||||||
|
|||||||||||||||||||||||||
Balance at 1 January 2020 (audited) |
19,070 |
- |
4,586 |
|
(296) |
- |
4,841 |
28,201 |
- |
28,201 |
|
||||||||||||||
|
|||||||||||||||||||||||||
Loss for the period |
- |
- |
- |
- |
- |
|
(6,066) |
(6,066) |
- |
|
(6,066) |
||||||||||||||
Issue of share capital |
- |
- |
- |
- |
- |
- |
10,399 |
- |
10,399 |
|
|||||||||||||||
Issue of preference share capital |
- |
- |
10,399 |
- |
- |
- |
- |
- |
- |
|
|||||||||||||||
Foreign exchange reserve |
- |
- |
- |
2 |
- |
- |
2 |
- |
2 |
|
|||||||||||||||
Share based remuneration |
- |
- |
- |
350 |
- |
- |
350 |
- |
350 |
|
|||||||||||||||
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|||||||||||||||||||||||||
Restated balance at 30 June 2020 (unaudited) |
19,070 |
- |
14,985 |
56 |
- |
|
(1,225) |
32,886 |
- |
32,886 |
|
||||||||||||||
|
|||||||||||||||||||||||||
(Loss) / profit for the period |
- |
- |
- |
- |
- |
|
(4,934) |
(4,934) |
260 |
|
(4,674) |
||||||||||||||
Amounts attributable to non-controlling interests |
- |
- |
- |
- |
- |
- |
- |
805 |
805 |
|
|||||||||||||||
Issue of preference share capital |
- |
- |
22,565 |
- |
- |
- |
22,565 |
- |
22,565 |
|
|||||||||||||||
Share based remuneration |
- |
- |
- |
|
(573) |
- |
- |
|
(573) |
- |
|
(573) |
|||||||||||||
Foreign exchange loss |
- |
- |
- |
|
(2) |
(855) |
- |
|
(857) |
- |
|
(857) |
|||||||||||||
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|||||||||||||||||||||||||
Balance at 31 December 2020 (audited) |
19,070 |
- |
37,550 |
|
(519) |
(855) |
(6,159) |
49,087 |
1,065 |
50,152 |
|
||||||||||||||
KINGSWOOD HOLDINGS LIMITED
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE PERIOD ENDED 30 JUNE 2021
(Loss) / profit for the period |
- |
- |
- |
- |
- |
|
(4,857) |
(4,857) |
1,132 |
(3,725) |
||||||||||||
Amounts attributable to non-controlling interests |
- |
- |
- |
- |
- |
- |
- |
(32) |
(32) |
|||||||||||||
Elimination of local goodwill on consolidation |
- |
- |
- |
- |
- |
(1,343) |
(1,343) |
(1,337) |
(2,680) |
|||||||||||||
Share based remuneration |
- |
- |
- |
60 |
- |
- |
60 |
- |
60 |
|||||||||||||
Foreign exchange gain |
- |
- |
- |
- |
368 |
- |
368 |
- |
368 |
|||||||||||||
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
||||||||||||||||||||||
Balance at 30 June 2021 (unaudited) |
19,070 |
- |
37,550 |
|
(459) |
(487) |
(12,359) |
43,315 |
828 |
44,143 |
||||||||||||
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
||||||||||||||||||||||
Note 13 provides further details of, and the split between, Share Capital and Share Premium. |
|
|||||||||||||||||||||
|
||||||||||||||||||||||
Additional reserves consist of foreign exchange translation, other reserves including share-based remuneration and expenses charged against reserves. |
||||||||||||||||||||||
|
||||||||||||||||||||||
The notes on pages 10 - 30 form an integral part of the financial statements |
||||||||||||||||||||||
KINGSWOOD HOLDINGS LIMITED
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2021
|
Six months to |
|
Six months to |
|
Year ended |
|
||||||||||
|
30 Jun 2021 |
|
30 Jun 2020 |
|
31 Dec 2020 |
|
||||||||||
|
(unaudited) |
|
(unaudited) |
|
(audited) |
|
||||||||||
|
restated |
|
||||||||||||||
|
Notes |
£'000 |
|
£'000 |
|
£'000 |
|
|||||||||
|
||||||||||||||||
Net cash generated from / (used in) operating activities |
15 |
5,654 |
|
3,909 |
|
(1,575) |
||||||||||
|
||||||||||||||||
Investing activities |
|
|||||||||||||||
Property, plant and equipment purchased |
|
(529) |
|
(394) |
|
(796) |
||||||||||
Acquisition of investments |
|
- |
|
(12,068) |
|
(10,579) |
||||||||||
Remuneration charge (deferred consideration) |
|
(3,975) |
|
(3,953) |
|
(5,153) |
||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Net cash used in investing activities |
|
(4,504) |
|
(16,415) |
|
(16,528) |
||||||||||
|
||||||||||||||||
Financing activities |
|
|||||||||||||||
Proceeds from issue of shares |
|
20,000 |
|
12,622 |
|
20,243 |
|
|||||||||
Interest paid |
|
(12) |
|
(3) |
|
(17) |
||||||||||
Lease payments |
|
(304) |
|
(174) |
|
(421) |
||||||||||
New loans received / loans repaid |
|
- |
|
- |
|
255 |
|
|||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Net cash generated from financing activities |
|
19,684 |
|
12,445 |
|
20,060 |
|
|||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Net increase/(decrease) in cash and cash equivalents |
|
20,834 |
|
(61) |
|
1,957 |
|
|||||||||
|
||||||||||||||||
Cash and cash equivalents at beginning of Period |
3,899 |
|
2,006 |
|
2,006 |
|
||||||||||
Effect of foreign exchange rates |
|
- |
|
- |
|
(64) |
||||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
Cash and cash equivalents at end of Period |
|
24,733 |
|
1,945 |
|
3,899 |
|
|||||||||
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
||||||||||||||||
The notes on pages 10 - 30 form an integral part of the financial statements |
|
|||||||||||||||
KINGSWOOD HOLDINGS LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2021
1 |
Accounting policies |
|
|
|
General information |
|
Kingswood Holdings Limited is a company incorporated in Guernsey under The Companies (Guernsey) Law, 2008. The shares of the Company are traded on the AIM market of the London Stock Exchange (ticker symbol: KWG). The nature of the Group's operations and its principal activities are set out in the Strategic Report. Certain subsidiaries in the Group are subject to the FCA's regulatory capital requirements and therefore required to monitor their compliance with credit, market and operational risk requirements, in addition to performing their own assessment of capital requirements as part of the ICAAP. |
|
|
1.1 |
Basis of accounting |
|
The Group's interim condensed consolidated financial statements are prepared and presented in accordance with IAS 34 'Interim Financial Reporting'. The accounting policies adopted by the Group in the preparation of its 2021 interim report are consistent with those disclosed in the annual financial statements for the year ended 31 December 2020 except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 January 2021, and will be adopted in the 2021 annual financial statements.
The information relating to the six months ended 30 June 2021 and the six months ended 30 June 2020 do not constitute statutory financial statements and have not been audited. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's most recent annual financial statements for the year ended 31 December 2020. |
|
|
1.2 |
Changes in significant accounting policies |
|
The Group has applied the same accounting policies and methods of computation in its interim consolidated financial statements as in its 2020 annual financial statements. |
|
|
|
There are a number of standards and interpretations which have been issued by the International Accounting Standards Board that are effective for periods beginning subsequent to 31 December 2021 (the date on which the company's next annual financial statements will be prepared up to) that the Group has decided not to adopt early. The Group does not believe these standards and interpretations will have a material impact on the financial statements once adopted. |
|
|
1.3 |
Significant accounting policies |
|
|
|
Going concern |
|
The Directors review the going concern position of the Group on a regular basis as part of the monthly reporting process which includes consolidated management accounts and cash flow projections and have, at the time of approving the financial statements, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.
|
|
|
|
Revenue recognition |
|
|
|
Performance obligations and timing of revenue recognition |
|
The majority of the Group's UK revenue, being investment management fees and ongoing wealth advisory, is derived from the value of funds under management / advice, with revenue recognised over the period in which the related service is rendered. This method reflects the ongoing portfolio servicing required to ensure the Group's contractual obligations to its clients are met. This also applies to the Group's US Registered Investment Advisor ("RIA") business. |
1 |
Accounting policies |
|
|
|
For certain commission, fee-based and initial wealth advisory income, revenue is recognised at the point the service is completed. This applies in particular to the Group's US Independent Broker Dealer ("IBD") services, and its execution-only UK investment management. There is limited judgement needed in identifying the point such a service has been provided, owing to the necessity of evidencing, typically via third-party support, a discharge of pre-agreed duties. |
|
|
|
The US division also has significant Investment Banking operations, where commission is recognised on successful completion of the underlying transaction. |
|
|
|
Determining the transaction price |
|
Most of the Group's UK revenue is charged as a percentage of the total value of assets under management or advice. For revenue earned on a commission basis, such as the US broker dealing business, a set percentage of the trade value will be charged. In the case of one-off or ad hoc engagements, a fixed fee may be agreed. |
|
|
|
Allocating amounts to performance obligations |
|
Owing to the way in which the Group earns its revenue, which is largely either percentage-based or fixed for discrete services rendered, there is no judgement required in determining the allocation of amounts received. Where clients benefit from the provision of both investment management and wealth advisory services, the Group is able to separately determine the quantum of fees payable for each business stream. |
|
|
|
Further details on revenue, including disaggregation by operating segment and the timing of transfer of service(s), are provided in note 4 below. |
|
|
2 |
Critical accounting judgements and key sources of estimation uncertainty |
|
|
|
In the application of the Group's accounting policies, which are described in note 1, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. |
|
|
|
Critical judgements in applying the Group's accounting policies |
|
The following are the critical judgements that the Directors have made in the process of applying the Group's accounting policies that had the most significant effect on the amounts recognised in the financial statements. |
|
|
|
Assessment of control |
|
Control is considered to exist where an investor has power over an investee, or else is exposed, and has rights, to variable returns. The Group determines control to exist where its own direct and implicit voting rights relative to other investors afford KHL - via its board and senior management - the practical ability to direct, or as the case may be veto, the actions of its investees. KHL holds 50.1% of voting rights in MHC and its subsidiaries, as well as a majority stake in the US division's advisory board when grouped with affiliated entities. The Group has thus determined that the Company has the practical ability to direct the relevant activities of MHC and its subsidiaries, and has consolidated the sub-group as subsidiaries with a 49.9% non-controlling interest. |
2 |
Critical accounting judgements and key sources of estimation uncertainty |
|
|
|
Estimates and Assumptions |
|
|
|
Intangible assets: |
|
|
|
Expected duration of client relationships |
|
The Group makes estimates as to the expected duration of client relationships to determine the period over which related intangible assets are amortised. The amortisation period is estimated with reference to historical data on account closure rates and expectations for the future. During the period, client relationships were amortised over a 10-20 year period. |
|
|
|
Goodwill |
|
The amount of goodwill initially recognised as a result of a business combination is dependent on the allocation of the purchase price to the fair value of the identifiable assets acquired and the liabilities assumed. The determination of the fair value of the assets and liabilities is based, to a considerable extent, on management's judgement. Goodwill is reviewed annually for impairment by comparing the carrying amount of the CGUs to their expected recoverable amount, estimated on a value-in-use basis. |
|
|
|
Share-based remuneration: |
|
|
|
Share based payments |
|
The calculation of the fair value of share-based payments requires assumptions to be made regarding market conditions and future events. These assumptions are based on historic knowledge and industry standards. Changes to the assumptions used would materially impact the charge to the Statement of Comprehensive Income. |
|
|
|
Deferred tax: |
|
|
|
Recoverability of deferred tax assets |
|
The amount of deferred tax assets recognised requires assumptions to be made to the financial forecasts that probable sufficient taxable profits will be available to allow all or part of the asset to be recovered. |
|
|
|
Leases: |
|
|
|
Estimating the incremental borrowing rate |
|
The Group cannot readily determine the interest rate implicit in leases where it is the lessee, therefore, it uses its incremental borrowing rate to measure lease liabilities. This is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. |
|
|
|
The incremental borrowing rate therefore reflects what the Group 'would have to pay', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary's functional currency). The Group estimates the incremental borrowing rate using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary's stand-alone credit rating). |
2 |
Critical accounting judgements and key sources of estimation uncertainty |
|
|
|
Deferred consideration: |
|
|
|
Payment of deferred consideration |
|
The Group structures acquisitions such that consideration is split between initial cash or equity settlements and deferred payments. The initial value of the contingent consideration is determined by EBITDA and/or revenue targets agreed on the acquisition of each asset. It is subsequently remeasured at its fair value through the Statement of Comprehensive Income, based on the Directors' best estimate of amounts payable at a future point in time, as determined with reference to expected future performance. Forecasts are used to assist in the assumed settlement amount. |
|
|
3 |
Significant events and transactions |
|
|
|
On 16 June 2021, Kingswood signed definitive agreements to acquire 100% of the shares in Admiral Wealth Management, an independent financial advisory firm with a client base primarily in Lincolnshire and Yorkshire. Following regulatory approval, the business will be acquired for cash consideration of £4.0 million, payable over a 2-year period. £2.0 million will be paid at closing and the balance paid on a deferred basis, some of which is subject to the achievement of pre-agreed performance targets.
Regulatory approval was received, and this deal formally completed, on 17 August 2021.
|
4 |
Business and geographical segments |
|
||||||||||||||||
|
||||||||||||||||||
|
Information reported to the Group's Non-Executive Chairman for the purposes of resource allocation and assessment of segment performance is focused on the category of customer for each type of activity.
The Group's reportable segments under IFRS 8 are as follows: investment management, wealth planning and US operations.
The Group has disaggregated revenue into various categories in the following table which is intended to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic date and enable users to understand the relationship with revenue segment information provided below.
The following is an analysis of the Group's revenue and results by reportable segment for the six month period to 30 June 2021. The table below details six months worth of revenue and results for the principal business and geographical divisions, which has then reconciled to the results included in the Statement of Comprehensive Income:
|
|
||||||||||||||||
|
||||||||||||||||||
|
Investment management |
Wealth planning |
US operations |
Group |
Total |
|
||||||||||||
|
||||||||||||||||||
|
Six months to |
Six months to |
Six months to |
Six months to |
Six months to |
|
||||||||||||
|
30 Jun 2021 |
30 Jun 2021 |
30 Jun 2021 |
30 Jun 2021 |
30 Jun 2021 |
|
||||||||||||
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
||||||||||||
|
Continuing operations: |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|||||||||||
|
||||||||||||||||||
|
Revenue (disaggregated by timing): |
|
||||||||||||||||
|
Point in time |
513 |
953 |
48,162 |
- |
49,628 |
|
|||||||||||
|
Over time |
1,799 |
7,354 |
2,760 |
- |
11,913 |
|
|||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
External sales |
2,312 |
8,307 |
50,922 |
- |
61,541 |
|
|||||||||||
|
||||||||||||||||||
|
Direct expenses |
|
(790) |
(460) |
(46,574) |
- |
|
(47,824) |
||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
Gross profit |
1,522 |
7,847 |
4,348 |
- |
13,717 |
|
|||||||||||
|
||||||||||||||||||
|
Operating profit / (loss) |
56 |
2,774 |
2,519 |
|
(2,294) |
3,055 |
|
||||||||||
|
||||||||||||||||||
|
Business re-positioning costs |
|
(76) |
(112) |
(184) |
(35) |
(407) |
|||||||||||
|
Finance costs |
- |
|
(50) |
5 |
|
(795) |
(840) |
||||||||||
|
Amortisation and depreciation |
- |
|
(522) |
(15) |
(580) |
(1,117) |
|||||||||||
|
Remuneration charge (deferred consideration) |
- |
|
(2,128) |
- |
|
(2,017) |
(4,145) |
||||||||||
|
Transaction costs |
- |
|
(8) |
- |
|
(266) |
(274) |
||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
(Loss) / profit before tax from continuing operations |
|
(20) |
(46) |
2,325 |
|
(5,987) |
(3,728) |
||||||||||
|
||||||||||||||||||
|
Tax |
- |
- |
|
(40) |
43 |
3 |
|
||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
(Loss) / profit after tax from continuing operations |
|
(20) |
46 |
2,285 |
|
(5,944) |
(3,725) |
||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
4 |
Business and geographical segments |
|
||||||||||||||||
|
||||||||||||||||||
|
Investment management |
Wealth planning |
US operations |
Group |
Total |
|
||||||||||||
|
||||||||||||||||||
|
Six months to |
Six months to |
Six months to |
Six months to |
Six months to |
|
||||||||||||
|
30 Jun 2020 |
30 Jun 2020 |
30 Jun 2020 |
30 Jun 2020 |
30 Jun 2020 |
|
||||||||||||
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
||||||||||||
|
restated |
restated |
restated |
restated |
restated |
|
||||||||||||
|
Continuing operations: |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|||||||||||
|
||||||||||||||||||
|
Revenue (disaggregated by timing): |
|
||||||||||||||||
|
Point in time |
586 |
558 |
1,207 |
- |
2,351 |
|
|||||||||||
|
Over time |
1,549 |
4,120 |
231 |
- |
5,900 |
|
|||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
External sales |
2,135 |
4,678 |
1,438 |
- |
8,251 |
|
|||||||||||
|
||||||||||||||||||
|
Direct expenses |
|
(461) |
(228) |
(1,249) |
- |
|
(1,938) |
||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
Gross profit |
1,674 |
4,450 |
189 |
- |
6,313 |
|
|||||||||||
|
||||||||||||||||||
|
Operating (loss) / profit |
|
(329) |
1,364 |
|
(28) |
(2,274) |
(1,267) |
||||||||||
|
||||||||||||||||||
|
Business re-positioning costs |
- |
- |
- |
|
(661) |
(661) |
|||||||||||
|
Finance costs |
|
(1) |
(8) |
- |
|
(72) |
(81) |
||||||||||
|
Amortisation and depreciation |
- |
|
(81) |
- |
|
(704) |
(785) |
||||||||||
|
Other losses |
- |
- |
- |
|
(10) |
(10) |
|||||||||||
|
Remuneration charge (deferred consideration) |
- |
|
(2,413) |
- |
|
(646) |
(3,059) |
||||||||||
|
Transaction costs |
- |
- |
- |
|
(203) |
(203) |
|||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
(Loss) / profit before tax from continuing operations |
|
(330) |
(1,138) |
(28) |
(4,570) |
(6,066) |
|||||||||||
|
||||||||||||||||||
|
Tax |
- |
- |
- |
- |
- |
|
|||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
(Loss) / profit after tax from continuing operations |
|
(330) |
1,138 |
|
(28) |
(4,570) |
(6,066) |
||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
4 |
Business and geographical segments |
|
||||||||||||||||
|
||||||||||||||||||
|
Investment management |
Wealth planning |
US operations |
Group |
Total |
|
||||||||||||
|
||||||||||||||||||
|
Year ended |
Year ended |
Year ended |
Year ended |
Year ended |
|
||||||||||||
|
31 Dec 2020 |
31 Dec 2020 |
31 Dec 2020 |
31 Dec 2020 |
31 Dec 2020 |
|
||||||||||||
|
(audited) |
(audited) |
(audited) |
(audited) |
(audited) |
|
||||||||||||
|
Continuing operations: |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|||||||||||
|
||||||||||||||||||
|
Revenue (disaggregated by timing): |
|
||||||||||||||||
|
Point in time |
1,071 |
1,595 |
7,299 |
- |
9,965 |
|
|||||||||||
|
Over time |
3,169 |
11,320 |
1,023 |
|
15,512 |
|
|||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
External sales |
4,240 |
12,915 |
8,322 |
- |
25,477 |
|
|||||||||||
|
||||||||||||||||||
|
Direct expenses |
|
(1,158) |
(643) |
(6,670) |
- |
|
(8,471) |
||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
Gross profit |
3,082 |
12,272 |
1,652 |
- |
17,006 |
|
|||||||||||
|
||||||||||||||||||
|
Operating (loss) / profit |
|
(107) |
4,380 |
543 |
|
(3,954) |
862 |
|
|||||||||
|
||||||||||||||||||
|
Business re-positioning costs |
- |
- |
- |
|
(1,801) |
(1,801) |
|||||||||||
|
Finance costs |
|
(3) |
(48) |
(3) |
(500) |
(554) |
|||||||||||
|
Amortisation and depreciation |
|
(10) |
(835) |
(3) |
(974) |
(1,822) |
|||||||||||
|
Other gains |
- |
- |
- |
1,744 |
1,744 |
|
|||||||||||
|
Remuneration charge (deferred consideration) |
- |
- |
- |
|
(7,254) |
(7,254) |
|||||||||||
|
Transaction costs |
- |
- |
- |
|
(1,855) |
(1,855) |
|||||||||||
|
Share of profit from associates |
- |
- |
- |
- |
- |
|
|||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
(Loss) / profit before tax from continuing operations |
|
(120) |
3,497 |
537 |
|
(14,594) |
(10,680) |
||||||||||
|
||||||||||||||||||
|
Tax |
- |
|
(2) |
(101) |
43 |
|
(60) |
||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
||||||||||||||||||
|
(Loss) / profit after tax from continuing operations |
|
(120) |
3,495 |
436 |
|
(14,551) |
(10,740) |
||||||||||
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
5 |
Other (losses) / gains |
|
|||||||||||||||||||||
|
|||||||||||||||||||||||
|
Six months to |
Six months to |
Year ended |
|
|||||||||||||||||||
|
30 Jun 2021 |
30 Jun 2020 |
31 Dec 2020 |
|
|||||||||||||||||||
|
(unaudited) |
(unaudited) |
(audited) |
|
|||||||||||||||||||
|
£'000 |
£'000 |
£'000 |
|
|||||||||||||||||||
|
|||||||||||||||||||||||
|
Net unrealised (loss) / gain on investments |
- |
|
(10) |
1,744 |
|
|||||||||||||||||
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||
|
|||||||||||||||||||||||
|
- |
|
(10) |
1,744 |
|
||||||||||||||||||
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||
|
|||||||||||||||||||||||
|
Unrealised losses and gains on investments relate to the US acquisitions. |
|
|||||||||||||||||||||
|
|||||||||||||||||||||||
6 |
Earnings per share |
|
|||||||||||||||||||||
|
|||||||||||||||||||||||
|
Six months to |
|
Six months to |
|
Year ended |
|
|||||||||||||||||
|
30 Jun 2021 |
|
30 Jun 2020 |
|
31 Dec 2020 |
|
|||||||||||||||||
|
(unaudited) |
|
(unaudited) |
|
(audited) |
|
|||||||||||||||||
|
restated |
|
|||||||||||||||||||||
|
£'000 |
|
£'000 |
|
£'000 |
|
|||||||||||||||||
|
|||||||||||||||||||||||
|
Loss from continuing operations for the purposes of basic loss per share, being net loss attributable to owners of the Group |
|
(4,857) |
|
(6,066) |
|
(11,000) |
||||||||||||||||
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||
|
|||||||||||||||||||||||
|
Number of shares |
|
|||||||||||||||||||||
|
|||||||||||||||||||||||
|
Weighted average number of ordinary shares for the purposes of basic loss per share |
216,920,719 |
|
216,920,719 |
|
216,920,719 |
|
||||||||||||||||
|
|||||||||||||||||||||||
|
Effect of dilutive potential ordinary shares: |
|
|||||||||||||||||||||
|
|||||||||||||||||||||||
|
Share options |
- |
|
- |
|
- |
|
||||||||||||||||
|
Convertible preference shares in issue |
- |
|
- |
|
- |
|
||||||||||||||||
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||
|
|||||||||||||||||||||||
|
Weighted average number of ordinary shares for the purposes of diluted loss per share |
216,920,719 |
|
216,920,719 |
|
216,920,719 |
|
||||||||||||||||
|
|||||||||||||||||||||||
|
Basic loss per share |
£(0.02) |
|
£(0.03) |
|
£(0.05) |
|
||||||||||||||||
|
Diluted loss per share |
£(0.02) |
|
£(0.03) |
|
£(0.05) |
|
||||||||||||||||
7 |
Property, plant and equipment |
||
|
|||
|
Fixtures and equipment |
||
|
£'000 |
||
|
Cost |
||
|
At 1 January 2020 |
564 |
|
|
Additions |
393 |
|
|
|||
|
|
||
|
|||
|
At 30 June 2020 |
957 |
|
|
Additions |
423 |
|
|
|||
|
|
||
|
|||
|
At 31 December 2020 |
1,380 |
|
|
Additions |
79 |
|
|
|||
|
|
||
|
|||
|
At 30 June 2021 |
1,459 |
|
|
|||
|
|
||
|
|||
|
Depreciation and impairment |
|
|
|
At 1 January 2020 |
343 |
|
|
Depreciation charged in the Period |
38 |
|
|
|||
|
|
||
|
|||
|
At 30 June 2020 |
381 |
|
|
Depreciation charged in the Period |
72 |
|
|
|||
|
|
||
|
|||
|
At 31 December 2020 |
453 |
|
|
Depreciation charged in the Period |
91 |
|
|
|||
|
|
||
|
|||
|
At 30 June 2021 |
544 |
|
|
|||
|
|
||
|
|||
|
Net book value |
||
|
At 30 June 2021 |
915 |
|
|
|||
|
|
||
|
|||
|
At 31 December 2020 |
927 |
|
|
|||
|
|
||
|
|||
|
At 30 June 2020 |
576 |
|
|
|||
|
|
||
8 |
Right-of-use assets |
|
||
|
||||
|
Land and buildings |
|||
|
£'000 |
|||
|
Cost |
|
||
|
At 1 January 2020 |
1,335 |
||
|
Additions |
1,705 |
||
|
||||
|
|
|||
|
||||
|
At 30 June 2020 |
3,040 |
||
|
Additions |
529 |
||
|
||||
|
|
|||
|
||||
|
At 31 December 2020 |
3,569 |
||
|
Additions |
65 |
||
|
||||
|
|
|||
|
||||
|
At 30 June 2021 |
3,634 |
||
|
||||
|
|
|||
|
||||
|
Accumulated depreciation |
|
||
|
At 1 January 2020 |
234 |
||
|
Depreciation charged in the Period |
220 |
||
|
||||
|
|
|||
|
||||
|
At 30 June 2020 |
454 |
||
|
Depreciation charged in the Period |
287 |
||
|
||||
|
|
|||
|
||||
|
At 31 December 2020 |
741 |
||
|
Depreciation charged in the Period |
310 |
||
|
||||
|
|
|||
|
||||
|
At 30 June 2021 |
1,051 |
||
|
||||
|
|
|||
|
||||
|
Net book value |
|
||
|
At 30 June 2021 |
2,583 |
||
|
||||
|
|
|||
|
||||
|
At 31 December 2020 |
2,828 |
||
|
||||
|
|
|||
|
||||
|
At 30 June 2020 |
2,586 |
||
|
||||
|
|
|||
9 |
Goodwill and other intangible assets |
||||||
|
Goodwill |
Other intangible assets |
Total |
||||
|
£'000 |
£'000 |
£'000 |
||||
|
Cost |
||||||
|
At 1 January 2020 |
16,384 |
17,655 |
34,039 |
|||
|
Additions |
4,735 |
8,287 |
13,022 |
|||
|
|||||||
|
|
|
|
|
|
||
|
|||||||
|
At 30 June 2020 (restated) |
21,119 |
25,942 |
47,061 |
|||
|
Additions |
4,565 |
2,026 |
6,591 |
|||
|
|||||||
|
|
|
|
|
|
||
|
|||||||
|
At 31 December 2020 |
25,684 |
27,968 |
53,652 |
|||
|
Additions |
35 |
- |
35 |
|||
|
|||||||
|
|
|
|
|
|
||
|
|||||||
|
At 30 June 2021 |
25,719 |
27,968 |
53,687 |
|||
|
|||||||
|
|
|
|
|
|
||
|
|||||||
|
Accumulated amortisation |
||||||
|
At 1 January 2020 |
2,202 |
2,629 |
4,831 |
|||
|
Amortisation charged for the Period |
77 |
451 |
528 |
|||
|
|||||||
|
|
|
|
|
|
||
|
|||||||
|
At 30 June 2020 (restated) |
2,279 |
3,080 |
5,359 |
|||
|
Amortisation charged for the Period |
- |
677 |
677 |
|||
|
|||||||
|
|
|
|
|
|
||
|
|||||||
|
At 31 December 2020 |
2,279 |
3,757 |
6,036 |
|||
|
Amortisation charged for the Period |
- |
708 |
708 |
|||
|
|||||||
|
|
|
|
|
|
||
|
|||||||
|
At 30 June 2021 |
2,279 |
4,465 |
6,744 |
|||
|
|||||||
|
|
|
|
|
|
||
|
|||||||
|
Net book value |
||||||
|
At 30 June 2021 |
23,440 |
23,503 |
46,943 |
|||
|
|||||||
|
|
|
|
|
|
||
|
|||||||
|
At 31 December 2020 |
23,405 |
24,211 |
47,616 |
|||
|
|||||||
|
|
|
|
|
|
||
|
|||||||
|
At 30 June 2020 (restated) |
18,840 |
22,862 |
41,702 |
|||
|
|||||||
|
|
|
|
|
|
||
10 |
Investments |
|
|||
|
|||||
|
£'000 |
|
|||
|
Cost |
|
|||
|
|||||
|
At 1 January 2020 |
416 |
|
||
|
Additions |
- |
|
||
|
|||||
|
|
|
|||
|
|||||
|
At 30 June 2020 |
416 |
|
||
|
|||||
|
Additions |
1,101 |
|
||
|
Net movement on equity accounting of associate |
|
(16) |
||
|
Investment de-recognised on gain of control |
|
(1,501) |
||
|
|||||
|
|
|
|||
|
|||||
|
At 31 December 2020 |
- |
|
||
|
|||||
|
Additions |
20 |
|
||
|
|||||
|
|
|
|||
|
|||||
|
At 30 June 2021 |
20 |
|
||
|
|||||
|
|
|
|||
|
|||||
|
On 25 May 2019, Kingswood acquired a 7% interest in US-based Manhattan Harbor Capital, LLC ("MHC") for an initial consideration of £416,435 (US$525,000), comprising a cash payment of £263,742 (US$332,500) and a share component of £152,693 (US$192,500) which was satisfied through the issuance of 1,654,787 new ordinary shares in the Company.
On 12 August 2020, Kingswood acquired an additional 17% interest in MHC for total cash consideration of £1,101,362 (US$1,438,158).
In the period during which Kingswood held 24% interest in MHC, equity accounting was applied and Kingswood's unrealised gain on investment during this period equalled £57,349 (US$75,563).
On 23 November 2020, Kingswood acquired a controlling 50.1% share in MHC and its subsidiaries for consideration of £3,841,268 (US$5,106,582), comprising a cash payment of £832,392 (US$1,106,582), a deferred cash payment of £752,219 (US$1,000,000) and the contribution of a 49.9% non-controlling interest in Kingswood Capital Partners, LLC and Kingswood Wealth Advisors, LLC, together valued at £99,210 (US$131,890).
The carrying value of Kingswood's 24% share of MHC immediately prior to acquiring control, from which was MHC and its subsidiaries was consolidated, was £2,334,365 (US$3,103,304). This investment is no longer recognised in the consolidated financial statements at 30 June 2021, with Kingswood instead fully consolidating MHC and its subsidiaries.
|
|
|||
11 |
Lease liabilities |
|
|||||
|
|||||||
|
The lease liabilities are included in trade and other payables and other non-current liabilities in the statement of financial position. |
|
|||||
|
|||||||
|
Land and buildings |
|
|||||
|
£'000 |
|
|||||
|
|||||||
|
At 1 January 2020 |
|
1,151 |
|
|||
|
|||||||
|
Additions |
|
1,693 |
|
|||
|
Interest expense |
|
28 |
|
|||
|
Lease payments |
|
(173) |
||||
|
|||||||
|
|
|
|||||
|
|||||||
|
At 30 June 2020 |
|
2,699 |
|
|||
|
|||||||
|
Additions |
|
701 |
|
|||
|
Interest expense |
|
82 |
|
|||
|
Lease payments |
|
(248) |
||||
|
|||||||
|
|
|
|||||
|
|||||||
|
At 31 December 2020 |
|
3,234 |
|
|||
|
|||||||
|
Additions |
|
65 |
|
|||
|
Interest expense |
|
92 |
|
|||
|
Lease payments |
|
315 |
|
|||
|
|||||||
|
|
|
|||||
|
|||||||
|
At 30 June 2021 |
|
3,076 |
|
|||
|
|||||||
|
|
|
|||||
|
|||||||
|
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses and adjusted for certain re-measurements of the lease liability. |
|
|||||
|
|||||||
|
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Group's incremental borrowing rate. |
|
|||||
|
|||||||
|
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment made. |
|
|||||
|
|||||||
|
The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that includes renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets recognised. |
|
|||||
12 |
Deferred consideration payable |
|
||||||
|
||||||||
|
30 Jun 2021 |
30 Jun 2020 |
31 Dec 2020 |
|||||
|
(unaudited) |
(unaudited) |
(audited) |
|||||
|
||||||||
|
restated |
|
||||||
|
£'000 |
£'000 |
£'000 |
|||||
|
||||||||
|
Deferred consideration payable on acquisitions: |
4,710 |
4,882 |
4,068 |
||||
|
||||||||
|
|
|
|
|
|
|||
|
||||||||
|
- falling due within one year |
900 |
2,197 |
836 |
||||
|
- due after more than one year |
3,810 |
2,685 |
3,232 |
||||
|
||||||||
|
The deferred consideration payable on acquisitions is due to be paid in cash.
The deferred consideration liability is contingent on performance requirements during the deferred consideration period. The value of the contingent consideration is determined by EBITDA and/or revenue targets agreed on the acquisition of each asset, as defined under the respective Business Purchase Agreement. As at the reporting date, the Group is expecting to pay the full value of its deferred consideration as all acquisitions are on target to meet the requirements, and therefore no gains or losses have arisen from this during the year.
During the period, deferred consideration expensed as remuneration through profit or loss was £4,145,000 (year ended 31 Dec 2020: £7,253,510; six month period ended 30 Jun 2020: £3,059,173).
|
|
||||||
13 |
Share capital |
|
||||||||||||
|
||||||||||||||
|
Six months to |
Six months to |
Year ended |
Six months to |
Six months to |
Year ended |
||||||||
|
30 Jun 2021 |
30 Jun 2020 |
31 Dec 2020 |
30 Jun 2021 |
30 Jun 2020 |
31 Dec 2020 |
||||||||
|
Shares |
Shares |
Shares |
£'000 |
£'000 |
£'000 |
||||||||
|
(unaudited) |
(unaudited) |
(audited) |
(unaudited) |
(unaudited) |
(audited) |
||||||||
|
||||||||||||||
|
Ordinary shares issued: |
|
||||||||||||
|
||||||||||||||
|
Fully paid |
216,920,719 |
216,920,719 |
216,920,719 |
10,846 |
10,846 |
10,846 |
|||||||
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
||||||||||||||
|
216,920,719 |
216,920,719 |
216,920,719 |
10,846 |
10,846 |
10,846 |
||||||||
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
||||||||||||||
|
Share capital and share premium |
|
||||||||||||
|
||||||||||||||
|
Number of ordinary shares |
Par value |
Share premium |
Total |
||||||||||
|
'000 |
£'000 |
£'000 |
£'000 |
||||||||||
|
||||||||||||||
|
At 1 January 2020 |
216,921 |
10,846 |
8,224 |
19,070 |
|||||||||
|
Issued during year |
- |
- |
- |
- |
|||||||||
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||
|
||||||||||||||
|
At 30 June 2020 |
216,921 |
10,846 |
8,224 |
19,070 |
|||||||||
|
Issued during year |
- |
- |
- |
- |
|||||||||
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||
|
||||||||||||||
|
At 31 December 2020 |
216,921 |
10,846 |
8,224 |
19,070 |
|||||||||
|
Issued during year |
- |
- |
- |
- |
|||||||||
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||
|
||||||||||||||
|
At 30 June 2021 |
216,921 |
10,846 |
8,224 |
19,070 |
|||||||||
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||
|
||||||||||||||
|
Ordinary shares have a par value of £0.05 per share. They entitle the holder to participate in dividends, and to share in the proceeds of winding up the company in proportion to the number of, and amounts paid on, shares held. On a show of hands, every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote and upon a poll each share is entitled to one vote.
Kingswood Holdings Limited does not have a limit on the amount of authorised capital. |
|
||||||||||||
14 |
Preference share capital |
|
||||||||||||
|
||||||||||||||
|
Six months to |
Six months to |
Year ended |
Six months to |
Six months to |
Year ended |
||||||||
|
30 Jun 2021 |
30 Jun 2020 |
31 Dec 2020 |
30 Jun 2021 |
30 Jun 2020 |
31 Dec 2020 |
||||||||
|
Shares |
Shares |
Shares |
£'000 |
£'000 |
£'000 |
||||||||
|
(unaudited) |
(unaudited) |
(audited) |
(unaudited) |
(unaudited) |
(audited) |
||||||||
|
||||||||||||||
|
Convertible preference shares issued: |
|
||||||||||||
|
||||||||||||||
|
Fully paid |
44,828,443 |
18,350,043 |
44,828,443 |
37,550 |
18,350 |
37,550 |
|||||||
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
||||||||||||||
|
44,828,443 |
18,350,043 |
44,828,443 |
37,550 |
18,350 |
37,550 |
||||||||
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
||||||||||||||
|
Preference share capital movements are as follows: |
|
||||||||||||
|
||||||||||||||
|
Number of shares |
Par value |
||||||||||||
|
'000 |
£'000 |
||||||||||||
|
||||||||||||||
|
At 1 January 2020 |
|
5,728 |
5,728 |
||||||||||
|
Issued during year |
|
12,622 |
12,622 |
||||||||||
|
||||||||||||||
|
|
|
|
|||||||||||
|
||||||||||||||
|
At 30 June 2020 |
|
18,350 |
18,350 |
||||||||||
|
Issued during year |
|
26,478 |
26,478 |
||||||||||
|
||||||||||||||
|
|
|
|
|||||||||||
|
||||||||||||||
|
At 31 December 2020 |
|
44,828 |
44,828 |
||||||||||
|
Issued during year |
|
- |
- |
||||||||||
|
||||||||||||||
|
|
|
|
|||||||||||
|
||||||||||||||
|
At 30 June 2021 |
|
44,828 |
44,828 |
||||||||||
|
||||||||||||||
|
|
|
|
|||||||||||
|
||||||||||||||
|
Six months to |
Six months to |
Year ended |
|||||||||||
|
30 Jun 2021 |
30 Jun 2020 |
31 Dec 2020 |
|||||||||||
|
£'000 |
£'000 |
£'000 |
|||||||||||
|
(unaudited) |
(unaudited) |
(audited) |
|||||||||||
|
restated |
|
||||||||||||
|
||||||||||||||
|
Equity component |
|
37,550 |
14,985 |
37,550 |
|||||||||
|
Liability component |
|
7,469 |
3,395 |
7,365 |
|||||||||
|
||||||||||||||
|
|
|
|
|
|
|||||||||
|
||||||||||||||
|
45,019 |
18,380 |
44,915 |
|||||||||||
|
||||||||||||||
|
|
|
|
|
|
|||||||||
14 |
Preference share capital |
|
||||||||||
|
||||||||||||
|
On 12 September 2019, Kingswood Holdings Limited entered into a subscription agreement with HSQ INVESTMENT LIMITED, a wholly owned indirect subsidiary of funds managed and/or advised by Pollen Street, to subscribe for up to 80 million irredeemable convertible preference shares, at a subscription price of £1 each (the Subscription). Pollen Street is a global, independent alternative asset investment management company, established in 2013 with currently over £2.6 billion gross AUM across private equity and credit strategies, focused on the financial and business services sectors, with significant experience in specialty finance.
All irredeemable convertible preference shares convert into new ordinary shares at Pollen Street Capital's option at any time from the earlier of an early conversion trigger or a fundraising, or automatically on 31 December 2023. Preferential dividends on the irredeemable convertible preference shares accrue daily at a fixed rate of five per cent per annum from the date of issue.
|
|
||||||||||
|
||||||||||||
15 |
Notes to the cash flow statement |
|
||||||||||
|
||||||||||||
|
Cash and cash equivalents comprise cash and cash equivalents with an original maturity of three months or less. The carrying amount of these assets is approximately equal to their fair value. Cash and cash equivalents are detailed in note . |
|
||||||||||
|
||||||||||||
|
Six months to |
Six months to |
Year ended |
|
||||||||
|
30 Jun 2021 |
30 Jun 2020 |
31 Dec 2020 |
|
||||||||
|
£'000 |
£'000 |
£'000 |
|
||||||||
|
(unaudited) |
(unaudited) |
(audited) |
|
||||||||
|
restated |
|
||||||||||
|
£'000 |
£'000 |
£'000 |
|
||||||||
|
||||||||||||
|
Loss before tax |
|
(3,728) |
(6,066) |
(10,680) |
|||||||
|
||||||||||||
|
Adjustments for: |
|
||||||||||
|
Depreciation and amortisation |
1,117 |
785 |
1,822 |
|
|||||||
|
Finance costs |
840 |
218 |
554 |
|
|||||||
|
Remuneration charge (deferred consideration) |
4,145 |
3,059 |
7,254 |
|
|||||||
|
Share-based payment expense |
60 |
350 |
|
(223) |
|||||||
|
Other (losses) / gains |
- |
10 |
|
(1,744) |
|||||||
|
Foreign exchange gain |
4 |
|
(47) |
(22) |
|||||||
|
Tax paid |
|
(40) |
- |
|
(103) |
||||||
|
Share of post-tax profits of equity accounted associates |
- |
- |
|
(56) |
|||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
|
Operating cash flows before movements in working capital |
2,398 |
|
(1,691) |
(3,198) |
|||||||
|
||||||||||||
|
(Increase)/decrease in receivables |
|
(863) |
(449) |
(1,893) |
|||||||
|
Increase/(decrease) in payables |
4,119 |
6,049 |
3,516 |
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
|
Net cash inflow / (outflow) from operating activities |
5,654 |
3,909 |
|
(1,575) |
|||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
16 |
Financial instruments |
|
||||||||||||
|
||||||||||||||
|
The following table states the classification of financial instruments and is reconciled to the Statement of Financial Position: |
|
||||||||||||
|
||||||||||||||
|
30 Jun 2021 |
30 Jun 2020 |
31 Dec 2020 |
|
||||||||||
|
Carrying amount |
Carrying amount |
Carrying amount |
|
||||||||||
|
(unaudited) |
(unaudited) |
(audited) |
|
||||||||||
|
£'000 |
£'000 |
£'000 |
|
||||||||||
|
||||||||||||||
|
Financial assets measured at amortised cost |
|
||||||||||||
|
Trade and other receivables |
3,790 |
889 |
23,048 |
|
|||||||||
|
Cash and cash equivalents |
24,733 |
1,945 |
3,899 |
|
|||||||||
|
||||||||||||||
|
Financial liabilities measured at amortised cost |
|
||||||||||||
|
Trade and other payables |
|
(17,495) |
(4,512) |
(10,483) |
|||||||||
|
Other non-current liabilities |
- |
|
- |
(794) |
|||||||||
|
Lease liability |
|
(3,076) |
(2,699) |
(3,234) |
|||||||||
|
Preference share liability |
|
(7,469) |
(3,395) |
(7,365) |
|||||||||
|
||||||||||||||
|
Financial liabilities measured at fair value through profit and loss |
|
||||||||||||
|
Deferred consideration payable |
|
(4,710) |
(4,882) |
(4,068) |
|||||||||
|
||||||||||||||
|
|
|
|
|
|
|
||||||||
|
||||||||||||||
|
(4,227) |
(12,654) |
1,003 |
|
||||||||||
|
||||||||||||||
|
|
|
|
|
|
|
||||||||
|
||||||||||||||
|
Financial instruments not measured at fair value includes cash and cash equivalents, trade and other receivables, trade and other payables, and other non-current liabilities.
Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables, and trade and other payables approximates fair value. |
|
||||||||||||
|
||||||||||||||
|
Item |
Fair value |
Valuation technique |
Fair value hierarchy level |
|
|||||||||
|
£'000 |
|
||||||||||||
|
||||||||||||||
|
Deferred consideration payable |
4,710 |
Fair value of deferred consideration payable is estimated by discounting the future cash flows using the IRR inherent in the company's acquisition price. |
|
Level 3 |
|
||||||||
|
||||||||||||||
|
The potential profit or loss impact in relation to deferred consideration payable of a reasonably possible change to the discount rate is as follows: |
|
||||||||||||
|
||||||||||||||
|
Profit or (loss) impact |
|
||||||||||||
|
Assumption |
|
Reasonably possible |
Increase |
Decrease |
|
||||||||
|
£'000 |
£'000 |
|
|||||||||||
|
Discount rate change |
|
(+ / - 5%) |
|
(64) |
66 |
|
|||||||
17 |
Related party transactions |
|
||||||
|
||||||||
|
Remuneration of key management personnel |
|||||||
|
||||||||
|
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
|
|||||||
|
||||||||
|
Six months to |
Six months to |
Year ended |
|||||
|
30 Jun 2021 |
30 Jun 2020 |
31 Dec 2020 |
|||||
|
(unaudited) |
(unaudited) |
(audited) |
|||||
|
£'000 |
£'000 |
£'000 |
|||||
|
||||||||
|
Short-term employee benefits |
371 |
338 |
898 |
||||
|
Share based payments |
34 |
260 |
68 |
||||
|
||||||||
|
|
|
|
|
|
|||
|
||||||||
|
405 |
598 |
966 |
|||||
|
||||||||
|
|
|
|
|
|
|||
|
||||||||
|
Other related parties |
|
||||||
|
||||||||
|
During the period, KHL incurred fees of £62,500 (30 June 2020: £62,500; 31 December 2020: £125,000) from KPI (Nominees) Limited in relation to Non-Executive Director remuneration. At 30 June 2021, £37,500 of these fees remained unpaid (30 June 2020: £nil; 31 December 2020: £112,500). |
|||||||
|
||||||||
|
Fees received from Moor Park Capital Partners LLP, in which Gary Wilder holds a beneficial interest, relating to property related services provided by KHL totalled £23,708 for the period ended 30 June 2021 (30 June 2020: £20,000; 31 December 2020: £20,000), of which £nil (30 June 2020: £nil; 31 December 2020: £nil) was outstanding at 30 June 2021. |
|||||||
|
||||||||
|
Fees paid for financial and due diligence services to Kingswood LLP and Kingswood Corporate Finance Limited, in which Gary Wilder and Jonathan Massing hold a beneficial interest, totalled £201,829 for the period to 30 June 2021 (30 June 2020: £38,900; 31 December 2020: £184,426), of which £5,430 (30 June 2020: £12,132; 31 December 2020: £29,280) was outstanding at 30 June 2021. |
|||||||
|
||||||||
18 |
Ultimate controlling party |
|||||||
|
||||||||
|
As at the date of approving the financial statements, the ultimate controlling party of the Group was KPI (Nominees) Limited.
|
|||||||
19 |
Restatement of prior periods |
|
||||||||||
|
||||||||||||
|
Deferred consideration |
|
||||||||||
|
||||||||||||
|
In 2020, the Group restated its accounting treatment regarding business combinations and deferred consideration to conform with the required treatment of deferred consideration under IFRS 3. Previously all deferred consideration payable on acquisitions was recorded as a deferred liability and included in the fair value of the consideration of the business acquired. However, in circumstances where the payment of deferred consideration is contingent on the seller remaining within the employment of the Group during the deferred period, the contingent portion of deferred consideration should not have been included in the fair value of consideration paid, rather is treated as remuneration and accounted for as a charge against profits over the deferred period. |
|
||||||||||
|
||||||||||||
|
This has therefore required the restatement of prior years and the reclassification of certain deferred payments as remuneration. The following restatement covers the share purchase acquisition of Marchant McKechnie in 2018 and the asset purchases of WFI and Thomas & Co in 2019. |
|
||||||||||
|
||||||||||||
|
(a) Statement of Comprehensive Income (extract) |
|
||||||||||
|
||||||||||||
|
Six months to 30 Jun 2020 |
Increase / (decrease) |
Six months to 30 Jun 2020 |
|
||||||||
|
(restated) |
|
||||||||||
|
£'000 |
£'000 |
£'000 |
|
||||||||
|
Finance charge |
218 |
|
(137) |
81 |
|
||||||
|
Amortisation charge |
807 |
|
(279) |
528 |
|
||||||
|
Remuneration charge (previously deferred consideration) |
- |
3,059 |
3,059 |
|
|||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
|
Total comprehensive loss |
|
(3,424) |
(2,642) |
(6,066) |
|||||||
|
||||||||||||
|
|
|
|
|
|
|
||||||
|
||||||||||||
|
Earnings per share - basic and diluted |
£(0.02) |
£(0.01) |
£(0.03) |
|
|||||||
19 |
Restatement of prior periods |
|
||||||||
|
||||||||||
|
(b) Statement of Financial Position (extract) |
|
||||||||
|
||||||||||
|
30 Jun 2020 |
Increase / (decrease) |
30 Jun 2020 |
|
||||||
|
(restated) |
|
||||||||
|
£'000 |
£'000 |
£'000 |
|
||||||
|
Intangible assets and goodwill |
58,664 |
|
(16,962) |
41,702 |
|
||||
|
Total non-current assets |
62,619 |
|
(16,952) |
45,667 |
|
||||
|
Trade and other payables |
4,801 |
2,119 |
6,920 |
|
|||||
|
Deferred consideration payable in less than 1 year |
10,006 |
|
(7,809) |
2,197 |
|
||||
|
Total current liabilities |
15,212 |
|
(6,095) |
9,117 |
|
||||
|
Deferred consideration payable in more than 1 year |
9,890 |
|
(7,205) |
2,685 |
|
||||
|
Other non-current liabilities |
2,294 |
3,394 |
5,688 |
|
|||||
|
Total liabilities |
27,396 |
|
(9,906) |
17,490 |
|
||||
|
||||||||||
|
|
|
|
|
|
|
||||
|
||||||||||
|
Net assets |
39,932 |
|
(7,046) |
32,886 |
|
||||
|
||||||||||
|
|
|
|
|
|
|
||||
|
||||||||||
|
Retained earnings |
2,456 |
|
(3,681) |
(1,225) |
|||||
|
Preference share capital |
18,350 |
(3,365) |
14,985 |
|
|||||
|
||||||||||
|
|
|
|
|
|
|
||||
|
||||||||||
|
Total equity |
39,932 |
|
(7,046) |
32,886 |
|
||||
|
||||||||||
|
|
|
|
|
|
|
||||
|
||||||||||
20 |
Events after the reporting date |
|
||||||||
|
||||||||||
|
Regulatory approval for the acquisition of 100% of the shares in Admiral Wealth Management was received on 17 August 2021. Full details can be found in note 3.
|
|
||||||||