28th Feb 2022 16:35
(Alliance News) - Kingswood Holdings Ltd has "transformed itself" in recent years via acquisitions into a vertically integrated wealth and investment management group with footholds in both the UK and US, making the AIM listing a potential "global leader" in its space, finnCap said on Monday.
finnCap was hired by Kingswood to be its nominated adviser and broker back in October. Thefirm initiated coverage on Monday with a price target of 39.0p. This is 37% above Kingswood's current share price. The stock was up 1.8% on Monday afternoon at 28.50p.
Last week, Kingswood said it had completed the the acquisition of the book of assets of Yorkshire-based DJ Cooke Financial Planning Ltd for around GBP1.5 million. The acquisition, which was first announced in late January, brought total assets under administration to GBP9.4 billion.
Other recent acquisitions include Aim Independent Ltd, Joseph R Lamb Independent Financial Advisers Ltd, and Allots Financial Services Ltd.
Kingswood's acquisition campaign has been backed by funds managed by Pollen Street Capital Ltd, which so far has provided GBP77.4 million in investment via a convertible preference share subscription agreement.
finnCap said its 39p price target is based on its projection of GBP15 million in headline earning before interest, tax, depreciation and amortisation in 2023, with annual Ebitda of about GBP20 million in the medium-term. The broker said its price target takes into account the dilution that will result from the Pollen Street share conversion in 2023.
finnCap said it applied a 14-times Ebitda multiple "given the substantially greater opportunity available to Kingswood, unavailable to listed market investors anywhere else across this space".
"Kingswood has transformed itself within the space of just a few years, evolving from a small wealth manager offering niche services into an international vertically integrated wealth and investment management group," finnCap said. "This foundation now presents Kingswood with the opportunity to consolidate a US market with attractive fundamentals while building upon significant recent progress made in the UK market."
By Tom Waite; [email protected]
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