4th Sep 2018 13:30
LONDON (Alliance News) - European Wealth Group Ltd on Tuesday reported a widened interim loss as the investment management company's revenue decreased.
The company also announced it passed a resolution at its annual general meeting Tuesday to change its name to Kingswood Holdings Ltd. The company's ticker will be changed to KWG.
In the first six months of the year, European Wealth's pretax loss widened to GBP1.5 million from GBP831,000 the year before.
Revenue decreased 7.7% to GBP4.8 million from GBP5.2 million.
The financial planner said the increased loss is primarily due to a loss incurred from the disposal of the company's Switzerland business - as it refocusses on "core markets" - as well as restructuring and legal fees associated with the company's rebranding to KW Wealth.
The revenue drop could be attributed to a "spike in financial planning revenues at the end of the 2016/2017 tax year", which was not repeated. Excluding this one-off boost, the company said underlying revenue is "stable".
The company's Investment Management division saw "very limited brokerage and execution revenue" in the first half. As a result, revenue fell to GBP3.4 million from GBP3.5 million. The division's operating profit also decreased to GBP600,000 from GBP700,000.
The Wealth Planning division "was not as strong as the first half of 2017" according to the company.
Revenue for the division was down to GBP1.4 million from GBP1.7 million - due to the aforementioned "spike" in charges related to UK government changes in Enterprise Investment Scheme and Venture Capitalist Trust scheme rules.
Looking ahead, the company said it has entered a "new phase" in its development. The company believes it has a "strong and scalable" operating platform that can support "incremental" revenue growth.
European Wealth believes the "positive changes" the company has made allows it to look to the future with "confidence".
Chief Executive Officer Marianne Ismail said: "The group has now entered a new phase of development. We have rebranded the business as KW Wealth.
"The board and management have established four strategic goals for the group: to deliver strong earnings growth for our shareholders; to achieve continued improvement in the client experience; to build our new brand; and finally, to maintain the highest standards of corporate governance and risk management.
"As we prepare for the future we have restructured and streamlined our investment management team, hired new investment managers and added to our in-house research team. We have also recruited several wealth planners in a very tight market."
Shares in European Wealth were untraded Tuesday but last closed at 17.50 pence each.