Kingswood Holdings Ltd on Wednesday said it expects its annual operating profit to come in below expectations, amid a drop in annual revenue as a result of a decline in its US business.
The wealth and investment management company said it expects revenue to total £143.6 million in 2022, representing a decline of 3.9% from £149.7 million a year prior. The anticipated drop is primarily driven by declining revenue growth in Kingswood’s US business.
The US business is expected to report revenue of £110 million, down 15% against the prior year due to lower than anticipated capital markets activity affecting US investment banking revenue and the timing of ‘a large one-off, high-margin US transaction’ that was expected to be reported in 2022 but will now be recognised in 2023.
Meanwhile, UK revenue is expected to increase by 54% to £33.8 million as a result of market headwinds and the benefit of acquisitions in the current and prior periods.
Consequently, Kingswood said it expects full-year operating profit to total £8.5 million. This would be an increase of 34% against the prior year, but is below the company’s expectations.
Chief Executive David Lawrence said: ‘It is understandable that capital markets activity softened in the US in 2022 as a result of market conditions, with this division of our business delivering lower operating profit contribution in the year. However, 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.’
Shares in Kingswood were down 7.4% at 25.00 pence at midday on Wednesday in London.
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