KINGSWOOD HOLDINGS LIMITED

Interim / Quarterly Report • Sep 30, 2024

National Storage Mechanism | Additional information RNS Number : 1597G Kingswood Holdings Limited 30 September 2024 KINGSWOOD HOLDINGS LIMITED ("Kingswood", the "Company" or the "Group") 2024 Half year Report 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 2024. Financial Highlights Continuing Operations: �� Group Assets under Advice and Management (AUA&M) increased to ��12.9bn up c8.2% on the prior year. o UK & Ireland (UK&I) Assets under Advice (AUA) at the period end were ��6.0bn benefiting from the acquisition of BasePlan completed in February 2024. o UK&I Assets under Management (AUM) at the period end were ��3.7bn. o US AuA was ��3.2bn. �� Group Revenue from continuing operations in the period was ��40.6m, an increase of 14% on the restated prior year (H1'23: ��35.6m). o UK&I revenue increased by ��0.3m to ��23.4m, or 1%, compared to the restated period last year, of which 81% is recurring in nature. o US revenue increased by ��4.8m to ��17.2m, a 38% rise compared to the restated period last year, driven by growth in authorised representatives. �� H1 2024 Group Operating Profit from continuing operations increased to ��6.1m, a ��1.1m or 21% increase compared to restated H1 2023, reflecting the benefit of acquisitions in the current period. o UK&I Operating Profit was ��7.9m increased by ��0.2m or 3%; o US Operating profit grew by 95% to ��1.3m (2023: ��0.7m), as a result of higher margins in Investment Banking revenues and increased Broker Dealer and Advisory revenues, supported by favourable macroeconomic conditions. �� The statutory loss before tax for the period was ��5.9m, an improvement of ��3.9m against the restated comparable period last year (H1'23: loss before tax of ��9.7m). The statutory loss before tax is stated after: o ��4.5m of finance costs incurred by the Group during the period on debt facility drawdowns, reflective of the Group's strategy to use leverage as an accelerant for growth; o ��1.6m of non-recurring costs, including broker fees on M&A transactions and costs incurred to reposition the business; and o Non-cash impacting items of ��5.9m included amortisation of intangible assets, finance costs recognised on the unwinding of deferred consideration and preference share dividends. Continuing operations: H1 2024 H1 2023 Change % ��000's (unless otherwise stated) Total Revenue 40,628 35,593 14% Group Recurring Revenue % 42% 33% 27% Operating Profit 6,117 5,055 21% Loss before tax (5,895) (9,747) 40% Total Equity 50,904 64,806 (21)% AuM (��m) 3,731 3,686 1% AuA (��m) 9,118 8,192 11% Number of Advisers - UK & Ireland 107 116 (8)% Number of Authorised Representatives - US 265 239 11% * * The Group results for the six months ending 30 June 2023 are restated due to US subsidiary classified as discontinued - see Note 3 and refer to the 2023 Annual Report - Note 1: Presentation of financial statements. Discontinued Operations: As previously announced at the time of the Group's final results on 28 June 2024, the sale of US subsidiary Benchmark Investments, LLC (BMI), that was completed on 9 November 2023, qualified as a discontinued operation. As a result, BMI's financial results for 2022 and 2023 were reclassified and reported separately from continuing operations in the Group annual financial statements for 31 December 2023. To ensure and provide a consistent and comparable view of the Group's financial performance, the H1 2023 financial results have been similarly restated to reflect BMI as a discontinued operation. As such, BMI's H1 2023 revenues, expenses, assets, and liabilities have been reclassified to discontinued operations. For H1 2023, BMI generated ��27m in revenue and had an operating and net loss before tax of ��0.1m and ��0.2m respectively. The full impact of this restatement is detailed in the Group's interim consolidated financial statements below. No items have been presented as discontinued in H1 2024. Peter Coleman, Kingswood Chief Executive Officer, commented: "I am pleased to share our interim financial results for the 6 month period to 30 June 2024. I am particularly pleased with our strong revenue growth and in particular the growth in recurring revenues, demonstrating that our acquisitions are beginning to mature. Quite rightly our focus is on providing a first-class experience to all of our clients, with the use of our excellent advice community, technology and range of award investment propositions. In particular I am pleased with the ongoing development of our IBOSS range of model portfolios and our in-house DFM both of which continue to flourish within the group. Our operating profit continues to grow, enabling our continued investment in people, propositions and processes all focussed on delivering a market-leading proposition for our clients. In UK&I we continue to be acquisitive with the addition of BasePlan, and we will continue to identify opportunities that enhance our growing business in this market. "In the US we continue to expand with the momentum of advisor recruitment and banking growing exponentially". H1'24 - Strategic Highlights: �� In February 2024, UK&I successfully completed the purchase of BasePlan, a long established and leading financial advisory firm which has been providing client led financial and retirement planning and wealth management services based in Dublin with ���130m AuA. �� To support the Group's capital and growth agenda, the Group obtained a new unsecured debt facility from funds managed by Pollen Street Capital Limited. ��11m of the facility was received in H1 2024 and was utilised to meet the Group's immediate capital needs and to satisfy deferred payment obligations from previous acquisitions. Post period end, the Group obtained an additional ��6.0m facility from funds managed by Pollen Street Capital. �� As announced on 31 May 2024, the Convertible Preference Shares issued by the Group to HSQ Investment Limited ("HSQ"), a wholly owned indirect subsidiary of funds managed and/ or advised by Pollen Street Capital Limited, were converted into 469,263,291 new Ordinary Shares in the Company at the agreed conversion price of 16.5 pence per Ordinary Share. The conversion makes for a clearer capital structure which the Group hopes will be welcomed by investors. �� Despite AuA outflows in the UK following the departure of some wealth advisers, UK&I AuA increased by ��0.2bn compared to December 2023 reflecting the completion of the BasePlan acquisition and positive market movements. A swift, diligent recruitment process has replenished our wealth advisory team including the addition of a fourth regional manager to support growth across the London and South-East region. �� Further progress has been made across the UK&I in driving organic growth across our key focus areas: �� 6 new IFA firms were onboarded onto IBOSS, in line with 2023 levels over the comparable period �� Institutional growth of c��0.2bn AuM in H1 2024 �� 81% of UK revenue is recurring in nature, providing a strong, annuity-style fee stream. Investment Banking fees are a larger proportion of Kingswood US revenues, and transactional in nature, which means that recurring revenue for the Group was 42% up from 33% in 2023. �� Our US footprint further expanded in the first half of the year adding 26 new authorised representatives and supporting growth in our total AuA in Kingswood US to ��3.1bn. �� Kingswood US has continued to grow its registered investment advisor/broker dealer (RIA/BD) business organically through the introduction of Kingswood Investments (KI) in Q2 2023, an in-house investment banking and capital markets division to support investment banking capabilities. This addition, combined with the existing teams, positions Kingswood as a comprehensive provider of investment banking services in the US. �� H1 saw three new appointments to the Executive team of Bryan Parkinson, MD of Wealth Planning, Vinoy Nursiah, CFO and Peter Coleman, CEO. The combination of the new joiners with the incumbents of Rachel Bailey, CPO, Paul Hammick, CRO and Lucy Whitehead, CCO has already demonstrated its effectiveness and capability by delivering the following to date: in-person presentations of next strategic phase at all UK locations, delivery of a major project to enhance regulatory performance and efficiency, design and implementation of a new service operating model to improve client and advisor experience, and the creation of five fundamental focus areas to align efforts across the Group. Additionally a major finance transformation project commenced in July and is on track to complete as scheduled in Q4. The Kingswood Board believes Operating Profit is the most appropriate indicator to explain the underlying performance of the Group. The definition of Operating Profit is profit before finance costs, amortisation and depreciation, gains and losses, and exceptional costs (business re-positioning and transaction costs) ��'000 (unless otherwise stated) H1'24 H1'23 (restated) Change % Change �� Total Group Revenue 40,628 35,593 14% 5,035 Wealth Planning 15,313 16,715 (8)% (1,402) Investment Management 4,141 3,917 6% 224 Kingswood Ireland 3,970 2,533 57% 1,437 Kingswood US 17,204 12,428 38% 4,776 Group Recurring Revenue 42% 33% Division Operating Profit: Kingswood UK&I 7,961 7,729 3% 232 Kingswood US 1,331 681 95% 650 9,292 8,410 10% 882 Central Costs (3,175) (3,355) 5% 180 Total Group Operating Profit 6,117 5,055 21% 1,062 ��'000 (unless otherwise stated) H1'24 H1'23 (restated) Change % Change �� Total Equity 55,910 64,806 14% (8,986) Total Cash 15,459 22,939 (33)% (7,480) Key Metrics AuM (��m) 3,731 3,686 1% 45 AuA (��m) 9,118 8,192 11% 926 # of UK&I Advisers 107 116 (8)% (9) # of US RIA/IBD reps 265 239 11% 26 * The Group results for the six months ending 30 June 2023 are restated due to US subsidiary classified as discontinued - see Note 3 and refer to the 2023 Annual Report - Note 1: Presentation of financial statements. Outlook In our 2023 Annual Report we stated that in the medium term, we had a strategic objective to grow the Group so as to target Group operating profit of ��25m with AuM/A of ��20bn. Despite difficult conditions, we have made strong progress against this objective and at 30 June 2024 our AUM/A stands at ��12.8bn with AuA at ��9.1bn (��8.8bn at December 2023) and AuM at ��3.7bn (��3.5bn at December 2023). We remain confident in the success of our ambitious long-term growth strategy, grounded in supporting our clients to protect and grow their wealth. We also continue to invest in a range of lead generation and digital tools to widen reach to new and younger demographics. In the UK and Ireland, our strategic focus continues to be on five key areas: 1. Market-leading client service ("always put clients first") 2. Organic growth ("look after more of our clients needs") 3. Operational excellence ("make it easy to do business") 4. Recruitment, development and retention of best in class people ("happy and productive colleagues") 5. Have a sustainable and successful commercial business. In the US, our strategic focus is on: 1. Continuing the growth trajectory through expansion of RIA/ BD activity including additional activities approved by FINRA. This includes expanding employment and office operations and engaging in research activities. 2. Leveraging technology integration to increase market presence and strengthen capabilities. 3. Increasing opportunities within investment banking operations and pursuing selective acquisitions For further details, please contact: Kingswood Holdings Limited +44 (0)20 7293 0730 Peter Coleman www.kingswood-group.com Cavendish Capital Markets Limited Ltd (Nomad & Broker) Marc Milmo / Abigail Kelly +44 (0)20 7220 0500 GreenTarget (for Kingswood media) Jamie Brownlee / Ellie Basle +44 (0)20 7324 5498 Jamie.Brownlee@greentarget.co.uk Company Registration No. 42316 (Guernsey) KINGSWOOD HOLDINGS LIMITED CONSOLIDATED INTERIM UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2024 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 Interim Consolidated Statement of Cash Flows 8 Notes to the Interim Consolidated Financial Statements 9 - 28 KINGSWOOD HOLDINGS LIMITED FINANCIAL AND OPERATIONAL REVIEW FOR THE PERIOD ENDED 30 JUNE 2024 Group Review: The Group has continued to build momentum in 2024 and revenue and operating profit have grown due to favourable market conditions, despite higher levels of adviser and consequently client attrition. Our business continues to grow organically in both the UK and US and our acquisition activity is slowing down, as planned. We have a new strong leadership team that is driving tangible results and realising our ambition to become a leading fully integrated international wealth & investment management business. Finance Review: Our focus is to maximise shareholder returns through Operating Profit growth combined with minimising our weighted average cost of capital. We also continue to maintain a strong discipline in how we think about the businesses we acquire, ensuring that the multiples we pay are within our risk appetite and funding profile. Kingswood's financial performance remained resilient in H1'24 against a continued backdrop of market volatility and at 30 June 2024 our AuA now stands at ��9.1bn (��8.8bn at December 2023) and AuM ��3.7bn (��3.5bn at December 2023) respectively. Group revenue for the period was ��40.6m, reflecting a 14% year-on-year increase. In the UK&I a modest 1% revenue growth was achieved, despite outflows from the Company's UK Assets under Advice following the departure of several wealth advisors. This was offset by positive market performance and an increase in Assets under Advice in Ireland, driven by our first "bolt-on acquisition," Baseplan which completed in February 2024. In the US, our footprint further expanded in the first half of the year adding 26 new registered representatives and supporting growth in our total AuA in Kingswood US to ��3.1bn. Investment Banking revenues in the US also rose due to the in-house Investment Banking and Capital Markets division launched in the previous year, which is now delivering measurable impact. Operating Profit of ��6.1m is 10% higher than 2023, driven by a ��0.7m increase in US profits and continued acquisition and organic growth in the UK&I. Central costs have decreased by 5% reflecting continued prudence across the Group in the management of its cost base in. The overall result for H1'24 was a loss before tax of ��5.9m reflecting ��0.7m of acquisition-related deferred consideration expenses, ��2.6m amortisation and depreciation, ��7.2m finance costs and ��1.5m business re-positioning and transaction costs. The Group had ��15.5m of cash as at H1'24, a decrease of ��7.5m since 31 December 2023 mostly due to cash outflows to satisfy finance costs and deferred payment obligations on previous acquisitions undertaken by the Company. In the medium term, we continue to target a Group operating profit of ��25m with AuM/A of ��20m. Despite difficult conditions, we have made strong progress against this objective and on 30 June 2024 our AUM/A stands at ��12.8bn with AuA at ��9.1bn (��8.8bn at December 2023) and AuM at ��3.7bn (��3.5bn at December 2023). We remain confident in our long-term growth strategy, focused on helping clients protect and grow their wealth. We continue to invest in lead generation and digital tools to expand our reach to new and younger demographics. Highlights - UK & Ireland: We have continued to build momentum on our strategic growth plans over the first half of the year, following the acquisition of our first "bolt-on acquisition," Baseplan. A retirement planning advice firm based in Dublin, Ireland, following regulatory approval in February 2024. Based in Dublin, Ireland, BasePlan is a long established and leading financial advisory firm which has been providing client led financial and retirement planning and wealth management services for over 30 years. The BasePlan acquisition increased the Group's assets under management by ���130m during the period and its contribution in the period was c.��0.25m. MMPI's acquisition of BasePlan formed an expected part of Kingswood's acquisition of MMPI in March 2023 and is a highly strategic acquisition for the Group providing access to the attractive Irish wealth management market whilst also offering diverse new avenues for growth. In UK&I, our strategy centres on five focal areas: always putting clients first; looking after more of our clients needs; making it easy to do business; happy and productive clients, and; having a sustainable and successful commercial business. Highlights - US: The US business continues to place a strong emphasis on maintaining a robust recruitment pipeline for new advisers, with a specific focus on cultivating reliable and recurring revenue streams through the management of c$3.9 billion of client assets. The first half of 2024 marked another period of growth and business expansion for Kingswood US, with the addition of 26 new authorised representatives, which further expanded our U.S. footprint. In H1 2024, US revenue grew by ��4.8m, a 38% increase compared to the same period last year. This was fuelled by an 11% growth in the number of authorised representatives, contributing an additional c$0.8bn in AuA. AuA in the US at 30 June 2024 was ��3.2bn (2023: ��3.1bn). Operating profit surged by 95% year-on-year to ��1.3m (2023: ��0.7m), driven by higher profit margins earned on Investment Banking revenues and healthy increases in both Broker Dealer and Advisory Revenues supported by to more favourable macroeconomic conditions in H1 2024 compared to H1 2023. We continued to expand our in-house Investment Banking offering, which focuses primarily on providing access to capital for mid-market businesses that are undergoing varying degrees of operational, financial or market-driven change. As a result, we have seen the profitability on the deals closed increase in H1 2024 and we see this trend continuing as we continue to build our investment banking team and deal flow through to the end of 2024. The expansion of our team of seasoned professionals, all of whom bring relevant industry relationships and a broad network of internal and external operating resources has strengthen client businesses and enhanced value. Streamlined back-office processes and regulatory oversight while delivering an improved experience to advisors and their clients have been a contributing factor to increased profit margins. KINGSWOOD HOLDINGS LIMITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2024 Six months to Six months to Year ended 30 June 2024 30 June 2023 31 Dec 2023 (unaudited) (unaudited) (audited) (restated) Notes ��'000 ��'000 ��'000 Revenue 6 40,628 35,593 86,160 Cost of sales (14,198) (11,851) (35,487) Gross profit 26,430 23,742 50,673 Administration expenses (20,313) (18,687) (39,857) Operating profit 6,117 5,055 10,816 Non-operating costs: Business re-positioning costs (130) (369) (1,894) Finance costs (7,227) (7,138) (12,966) Other finance costs (2,634) (2,936) (6,046) Acquisition-related items: Other (losses) / gains 8 254 - - 131 Remuneration charge (deferred consideration) 11 (704) (259) (474) Transaction cost (1,571) (4,100) (2,828) Loss before tax (5,895) (9,747) (13,261) Tax (148) (175) (2,705) Loss after tax from continuing operations (6,043) (9,922) (15,966) Loss from discontinued operations - (172) (636) Total comprehensive loss (6,043) (10,094) (16,602) Six months to Six months to Year ended 30 June 2024 30 June 2023 31 Dec 2023 (unaudited) (unaudited) (audited) (restated) ��'000 ��'000 ��'000 - Owners of the parent company (6,853) (10,537) (18,233) - Non-controlling interests 810 443 1,631 Total comprehensive loss is attributable to: - Owners of the parent company (6,853) (10,537) (18,233) - Non-controlling interests 810 443 1,631 Loss per share: - Basic loss per share - continuing operations 9 �� (0.01) �� (0.05) �� (0.08) - Diluted loss per share - continuing operations 9 �� (0.01) �� (0.01) �� (0.02) The Basic and diluted loss per share from discontinued operations was ��0.00 (2023: ��0.00) * 30 June 2023 results are restated due to a business classified as discontinued operations - see Note 3 The notes on pages 9 -28 form an integral part of the financial statements. KINGSWOOD HOLDINGS LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2024 30 Jun 2024 30 Jun 2023 31 Dec 2023 (unaudited) (unaudited) (audited) (restated) Notes ��'000 ��'000 ��'000 Non-current assets Property, plant and equipment 606 893 770 Right-of-use assets 2,782 3,298 3,236 Goodwill and other intangible assets 10 149,148 148,658 146,405 Deferred tax asset 2,066 4,492 2,058 154,602 157,341 152,469 Current assets Short term investments 72 49 72 Assets held for sale - 3,541 - Trade and other receivables 10,492 8,049 14,295 Cash and cash equivalents 15,459 22,939 18,704 26,023 34,578 33,071 Total assets 180,625 191,919 185,540 Current liabilities Trade and other payables 9,363 11,334 15,654 Liabilities associated with assets held for sale - 2,558 - Deferred consideration payable 11 17,629 15,513 23,905 26,992 29,405 39,559 Non-current liabilities Deferred consideration payable 11 501 12,559 2,369 Other non-current liabilities 1,982 2,519 2,358 Loans and borrowings 77,611 64,984 62,879 Deferred tax liability 17,629 17,646 17,476 Total liabilities 124,715 122,038 88 127,113 124,641 Net assets 55,910 55,910 64,806 60,899 Equity Share capital 12 34,309 10,846 10,846 Share premium 12 54,911 8,224 8,224 Preference share capital 13 - 70,150 70,150 Other reserves 18,717 16,168 17,423 Foreign exchange reserve (1,020) (1,087) (1,087) (778) Retained earnings (56,013) (42,132) (42,132) (49,162) (49,162) Equity attributable to the owners of the Parent Company 50,904 62,169 56,703 Non-controlling interests (NCI) 5,006 2,637 4,196 Total equity 55,910 64,806 60,899 * 30 June 2023 results are restated due to a business classified as discontinued operations - see Note 3 The notes on pages 9 - 28 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: David Hudd Chairman Date: 30th September 2024 KINGSWOOD HOLDINGS LIMITED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2024 Share capital Foreign Equity attributable to the owners of Non- and share Preference currency Other Retained the parent controlling premium share capital reserve reserves earnings Company interests Total equity �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 Balance at 1 January 2023 19,070 70,150 (422) 14,373 (31,595) 71,576 2,391 73,967 Loss for the period - - - - (10,537) (10,537) 443 (10,094) Other adjustment - - - - - - (197) (197) Share based remuneration - - - 498 - 498 - 498 Preference share capital reserve - - - 1,297 - 1,297 - 1,297 Foreign exchange gain - - (665) - - (665) - (665) At 30 June 2023 19,070 70,150 (1,087) 16,168 (42,132) 62,169 2,637 64,806 (Loss)/profit for the year - - - - (7,696) (7,696) 1,188 (6,508) Other adjustment - - - - 666 666 371 1,037 Share based remuneration - - - (42) - (42) - (42) Preference share capital reserve - - - 1,297 - 1,297 - 1,297 Foreign exchange gain/(loss) - - 309 - - 309 - 309 At 31 December 2023 19,070 70,150 (778) 17,423 (49,162) 56,703 4,196 60,899 (Loss)/profit for the year - - - - (6,853) (6,853) 810 (6,043) Other adjustment - - - - 2 2 - 2 Share based remuneration - - - 131 - 131 - 131 Preference share conversion 70,150 (70,150) - - - - - - Preference share capital reserve - - - 1,163 - 1,163 - 1,163 Foreign exchange gain/(loss) - - (242) - - (242) - (242) At 30 June 2024 89,220 - (1,020) 18,717 (56,013) 50,904 5,006 55,910 KINGSWOOD HOLDINGS LIMITED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 JUNE 2024 Period Period Year ended 30 Jun 2024 30 Jun 2023 31 Dec 2023 (unaudited) (unaudited) (audited) (restated) Notes ��'000 ��'000 ��'000 Net cash generated from / (used in) operating activities 14 2,828 3,852 4,593 Investing activities Property, plant and equipment purchased (36) (99) (136) Acquisition of investments (3,483) (28,458) (24,776) Goodwill adjustment - additional consideration (1,546) Proceeds from the disposal of a subsidiary, net of cash disposed - - 946 Deferred consideration and remuneration (10,554) (6,953) (9,638) Net cash used in investing activities (15,619) (35,510) (33,604) Financing activities Interest paid (4,204) (3,565) (5,910) Lease payments (394) (430) (940) Dividends paid to non-controlling interests - - (491) New loans (repaid) / loans received 14,000 40,607 39,025 Net cash (used in)/generated from financing activities 9,402 36,612 31,684 Net (decrease)/increase in cash and cash equivalents (3,388) 4,954 2,673 Cash and cash equivalents at beginning of Period 18,704 19,624 16,726 Cash transferred to asset held for sale/cash flows from discontinued operations - (1,187) - Effect of foreign exchange rates 143 (452) (695) Cash and cash equivalents at end of Period 15,459 22,939 18,704 * 30 June 2023 results are restated due to a business classified as discontinued operations - see Note 3 The notes on pages 9 - 28 form an integral part of the financial statements. KINGSWOOD HOLDINGS LIMITED NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2024 1 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. 2 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 2024 interim report are consistent with those disclosed in the annual financial statements for the year ended 31 December 2023. The information relating to the six months ended 30 June 2024 and the six months ended 30 June 2023 do not constitute statutory financial statements and has 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 2023. 3 Restatement of Prior Period Results In the annual financial statements for 31 December 2023, Note 2 made reference to a reclassification restatement to the prior year reported figures, as a result of the sale of subsidiary BMI which completed on 9 November 2023. The sale qualified as a discontinued operation under IFRS 5, "Non-current Assets Held for Sale and Discontinued Operations" and therefore the results of BMI for the year ending 2023 and 2022 were segregated from continuing operations and disclosed separately. As such, to provide a consistent and comparable view of the Group's financial performance for the six months ending 30 June 2024, equivalent restatements have been made in respect of the 30 June 2023 figures. The restatement involves reclassifying BMI's revenues, expenses, assets, and liabilities from continuing operations to discontinued operations for the six months ending 30 June 2023. The effect of the restatement on the Group's interim statement of financial position and statement of comprehensive income in respect of the comparative amounts for the six months ending 30 June 2023 is set out below: Six months ending 30 June 2023 Adjustment for Six months ending 30 June 2023 As reported (unaudited) Discontinued Operations Restated (unaudited) �� 000 �� 000 �� 000 Revenue 62,730 (27,137) 35,593 Cost of sales (37,314) 25,463 (11,851) Gross Profit 25,416 (1,674) 23,742 Administrative expenses (20,451) 1,764 (18,687) Operating profit/(loss) 4,965 90 5,055 Business re-positioning costs (369) - (369) Finance costs (7,138) - (7,138) Other Finance costs (2,957) 21 (2,936) Transaction costs (4,161) 61 (4,100) Remuneration charge (deferred consideration) (259) - (259) Loss before tax (9,919) 172 (9,747) Income tax receipt/(expense) (175) - (175) Loss for the year net of tax reclassified to discontinued operations (172) (172) Loss for the year from continuing operations (10,094) - (10,094) 3 Restatement of Prior Period Results (continued) At 30 June 2023 Adjustment for At 30 June 2023 As Reported (unaudited) Discontinued Operations Restated (unaudited) �� 000 �� 000 �� 000 Property, plant and equipment 916 (23) 893 Right of use assets 3,298 - 3,298 Intangible assets and goodwill 148,658 - 148,658 Deferred tax asset 4,492 - 4,492 Total non-current assets 157,364 (23) 157,341 Trade and other receivables 10,380 (2,331) 8,049 Cash and cash equivalents 24,126 (1,187) 22,939 Assets held for sale - 3,541 3,541 Short term investments 49 - 49 Current Assets 34,555 23 34,578 Total Assets 191,919 - 191,919 Trade and other payables (13,892) 2,558 (11,334) Liabilities associated with assets held for sale - (2,558) (2,558) Deferred consideration (15,513) - (15,513) Current liabilities (29,405) - (29,405) Total non-current liabilities (97,708) - (97,708) Total liabilities (127,113) - (127,113) Total equity (64,806) - (64,806) 4 Accounting policies 4.1 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 2023 annual financial statements. 4.2 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. 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 3 below. 5 Critical accounting judgements and key sources of estimation uncertainty In the application of the Group's accounting policies, which are described in note 2, 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 the Group - via its board and senior management - the practical ability to direct, or as the case may be veto, the actions of its investees. The company holds 50.1% of voting rights in Kingswood US, LLC, parent company of the US 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 rights, to variable returns from involvement with Kingswood US, LLC and its subsidiaries; and the ability to use power over the US Group to affect the amount of those returns, as such the Company has consolidated the sub-group as subsidiaries with a 49.9% non-controlling interest. The company holds 70% of voting rights in Moloney Investments Limited, parent company of Ireland and its subsidiaries, as well as a majority stake in the Ireland 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 Moloney Investments Limited and its subsidiaries and has consolidated the sub-group as subsidiaries with a 30% non-controlling interest. 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 Cash Generating Units (CGU) to their expected recoverable amount, estimated on a value-in-use basis. The CGUs are based on the business segments as outlined in note 6. 5 Critical accounting judgements and key sources of estimation uncertainty (continued) Estimates and Assumptions (continued) 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. 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. 6 Business and geographical segments Six month ended 30 June 2024 (Unaudited) Investment management Wealth planning US operations Ireland operations Group Continuing Total Discontinued Total Total �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 Revenue (disaggregated by timing): Non-recurring 578 1,813 15,946 1,510 - 19,847 - 19,847 Recurring 3,563 13,500 1,258 2,460 - 20,781 - 20,781 External sales 4,141 15,313 17,204 3,970 - 40,628 - 40,628 40,628 Direct expenses (568) (603) (13,027) - - (14,198) - (14,198) Gross profit 3,573 14,710 4,177 3,970 - 26,430 26,430 - 26,430 Operating profit / (loss) 1,773 4,852 1,331 1,336 (3,175) 6,117 - 6,117 Business re-positioning costs - - - - (130) (130) - (130) Finance costs (3) (38) (6) (2) (7,178) (7,227) - (7,227) Other finance costs (8) (712) - (28) (1,886) (2,634) - (2,634) Other gains / (losses) 22 232 254 - 254 Remuneration charge (deferred consideration) - - - - (704) (704) - (704) Transaction costs (198) (277) (119) (370) (607) (1,571) - (1,571) Profit / (loss) before tax 1,564 3,847 1,206 936 (13,448) (5,895) - (5, 895) Tax - - (148) - - - (148) - (148) Profit / (loss) after tax 1,564 3,847 1,058 936 (13,448) (6,043) - ( 6,043) 6 Business and geographical segments (continued) Period Ended 30 June 2023 (Unaudited) (Restated) Investment management Wealth planning US operations Ireland operations Group Continuing Total Discontinued Total Total �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 Revenue (disaggregated by timing): Non-recurring 452 2,053 11,894 1,743 - 16,142 25,620 41,762 Recurring 3,465 14,662 534 790 - 19,451 1,517 20,968 External sales 3,917 16,715 12,428 2,533 - 35,593 27,137 62,730 Direct expenses (569) (793) (10,489) - - (11,851) (25,463) (37,314) Gross profit 3,348 15,922 1,939 2,533 - 23,742 1,674 25,416 Operating profit / (loss) 1,379 5,589 681 761 (3,355) 5,055 (90) 4,965 Business re-positioning costs (76) (104) (124) - (65) ( 369) - (369) Finance costs (7) (87) (8) (1) (7,035) (7,138) - (7,138) Other finance costs (9) (823) 21 (18) (2,107) (2,936) (21) (2,957) Remuneration charge (deferred consideration) - - - - (259) (259) - (259) Transaction costs (61) (272) 61 - (3,828) (4,100) (61) (4,161) Profit / (loss) before tax 1,226 4,303 631 742 (16,649) (9,747) (172) (9,919) Tax - (157) (14) (4) - (175) - (175) Profit / (loss) after tax 1,226 4,146 617 738 (16,649) (9,922) (172) (10,094) 6 Business and geographical segments (continued) Year Ended 31 December 2023 (Audited) Investment management Wealth planning US operations Ireland operations Group Continuing Total Discontinued Total Total Revenue (disaggregated by timing): �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 �� 000 Non-recurring 974 4,420 28,633 1,550 - 35,577 36,484 72,061 Recurring 6,995 27,970 10,941 4,636 41 50,583 1,827 52,410 External sales 7,969 32,390 39,574 6,186 41 86,160 38,311 124,471 Direct expenses (1,154) (1,482) (32,851) - - (35,487) (36,322) (71,809) Gross profit 6,815 30,908 6,723 6,186 41 50,673 1,989 52,662 Operating profit / (loss) 3,020 10,709 1,870 1,948 (6,731) 10,816 (103) 10,713 Business re-positioning costs (265) (425) - - (1,204) (1,894) - (1,894) Finance costs (13) (156) (13) (3) (12,781) (12,966) (6) (12,972) Amortisation and depreciation (9) (1,656) (145) (51) (4,185) (6,046) (37) (6,083) Other gains / (losses) - (5) 46 - 90 131 - 131 Remuneration charge (deferred - - - - (474) (474) - (474) consideration) 6 (586) 1,117 (72) (3,293) (2,828) (490) (3,318) Profit / (loss) before tax 2,739 7,881 2,875 1,822 (28,578) (13,261) (636) (13,897) Tax - (39) (37) (290) (2,339) (2,705) - (2,705) Profit / (loss) after tax 2,739 7,842 2,838 1,532 (30,917) (15,966) (636) (16,602) 7 Discontinued operations In the 31 December 2023 financial statements, the Group reported the sale of the of the entire share capital of wholly owned subsidiary Benchmark Investments, LLC (BMI) for a consideration of US$5million. At 30 June 2023 and at 31 December 2023, the business has been classified as held for sale and is classified as a discontinued operation, and can be shown below. No items have been presented as discontinued in 2024. Six months to Year ending Results of discontinued operations: 30 June 2023 31 Dec 2023 �� 000 �� 000 Revenue 27,137 38,311 Cost of sales (25,463) ( 36,322) Gross Profit 1,674 1,989 Administrative expenses (1,764) (2,092) Operating profit (90) (103) Business re-positioning costs Finance costs - (6) Other Finance costs (21) (37) Transaction costs (61) (490) Other gains or losss (Loss)/Profit before tax (172) (636) Income tax receipt/(expense) - - Loss for the year from discontinued operations (172) (636) Attributable to: Owners of the Company (86) (319) Non-controlling interests (86) (317) (172) (636) Six months to Year ending 30 June 2023 31 Dec 2023 Cash flows used in discontinued operations �� 000 �� 000 Net cash from operating activities 1,187 - Net cash from investing activities - - Net cash from financing activities - - Net cash flows for the year 1,187 - 7 Discontinued operations (continued) At 30 June 2023, the disposal group was stated at its carrying value and comprised the following assets and liabilities: At 30 June 2023 �� 000 Property, plant and equipment 23 Trade and other receivables 2,331 Cash and cash equivalents 1,187 Assets held for sale 3,541 Trade and other payables 2,558 Liabilities associated with assets held for sale 2,558 At of 30 June 2024 and 31 December 2023, there was no disposal groups, as the sale was completed in November 2023. 9 5 Earnings per share Six months to Six months to Year ended 30 Jun 2024 30 Jun 2023 31 Dec 2023 (unaudited) (unaudited) (audited) ��'000 ��'000 ��'000 Loss from continuing operations for the purposes of basic loss per share, being net loss attributable to owners of the Group (6,853) (10,365) (17,597) Loss from discontinued operations for the purposes of basic loss per share, being net loss attributable to owners of the Group - (172) (636) (6,853) (10,537) (18,233) Number of shares Weighted average number of ordinary shares for the purposes of basic loss per share 686,184,010 216,920,719 216,920,724 Effect of dilutive potential ordinary shares: Share options 5,607,177 6,624,664 5,956,773 Convertible preference shares in issue 107,297,617 525,217,205 538,027,380 Weighted average number of ordinary shares for the purposes of diluted loss per share 799,088,804 748,762,588 760,904,877 Continuing operations: Basic loss per share ��(0.01) ��(0.05) ��(0.08) Diluted loss per share ��(0.01) ��(0.01) ��(0.02) Total loss: Basic loss per share ��(0.01) ��(0.05) ��(0.08) Diluted loss per share ��(0.01) ��(0.01) ��(0.02) 8 Other (losses) / gains Six months to Six months to Year Ended 30 June 2024 30 June 2023 31 December 2023 (unaudited) (unaudited) (audited) ��'000 ��'000 ��'000 Realised gain on investment 254 - 131 254 - 131 10 Goodwill and other intangible assets Goodwill Other intangible assets Total ��'000 ��'000 ��'000 Cost At 1 January 2023 57,817 76,106 133,923 Additions 7,306 20,554 27,860 Movement due to FX (315) 14 (301) At 30 June 2023 64,808 96,674 161,482 Additions 127 (266) (139) Revaluation of acquisition 247 - 247 Exchange adjustments (14) (15) (29) At 30 December 2023 65,168 96,393 161,561 Additions 1,343 2,361 3,704 Goodwill adjustment 1,546 - 1,546 Movement due to FX 127 - 127 Disposals - - - At 30 June 2024 68,184 98,754 165,398 Accumulated amortisation At 1 January 2023 2,279 8,175 10,454 Charge for period - 2,370 2,370 At 30 June 2023 2,279 10,545 12,824 Disposals Charge for period - 2,332 9 2,332 At 31 December 2023 2,279 12,877 15,156 Disposals Charge for period - 2,634 2,634 At 30 June 2024 2,279 15,511 17,790 10 Goodwill and other intangible assets (continued) Net book value As at 30 June 2024 65,905 83,243 149,148 As at 30 June 2023 62,529 86,129 148,658 As at 31 December 2023 62,889 83,516 146,405 11 Deferred consideration payable Six Months to Six Months to Year Ended 30 June 2024 30 June 2023 31 December 2023 ��'000 ��'000 ��'000 Deferred consideration payable on acquisitions: 18,130 28,072 26,274 - falling due within one year 17,629 15,513 23,905 - due after more than one year 501 12,559 2,369 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 Share or 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. Previously all deferred consideration payable on acquisitions was recorded as a deferred liability and included in the fair value of assets. 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 is not 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. 12 Share capital Six months to Six months to Year ended Six months to Six months to Year ended 30 June 2024 30 June 2023 31 Dec 2023 30 June 2024 30 June 2023 31 Dec 2023 (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) Shares Shares Shares ��'000 ��'000 ��'000 Ordinary shares issued: Fully paid 686,184,010 216,920,719 216,920,719 34,309 10,846 10,846 686,184,010 216,920,719 216,920,719 34.309 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 2023 216,921 10,846 8,224 19,070 Issued during year - - - - As at 30 June 2023 216,921 10,846 8,224 19,070 At 31 December 2023 216,921 10,846 8,224 19,070 Issued during year 469,263 23,463 46,687 70,150 At 30 June 2024 686,184 34,309 54,911 89,220 On 31 May 2024, the Company issued 469,263,291 new ordinary shares of ��0.05 each following the conversion of 77,428,443, ��1 convertible preference shares into ordinary shares at an agreed conversion price of 16.5 pence per share. The par value of the newly issued ordinary shares amounted to ��23,463,165, with the excess over par value recognised as share premium. Please refer to the Note 13 for more details. 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. As at 31 December 2023 HSQ Investment Limited held 469,263,291 Ordinary Shares, representing approximately 68.4 per cent of ordinary shares in issue at 30 June 2024. 13 Preference share capital Six Months to Six Months to Year Ended Six Months to Six Months to Year Ended 30 June 2024 30 June 2023 31 Dec 2023 30 June 2024 30 June 2023 31 Dec 2023 (unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) Shares Shares Shares ��'000 ��'000 ��'000 Convertible preference shares issued: Fully paid - 77,428,443 77,428,443 - 77,428 77,428 - 77,428,443 77,428,443 - 77,428 77,428 Six Months to Six Months to Year Ended 30 June 2024 30 June 2023 31 Dec 2023 (unaudited) (unaudited) (audited) Equity component - 70,150 70,150 - 70,150 70,150 Number of shares Par value '000 ��'000 At 1 January 2023 77,428 70,150 Issued during year - - As at 30 June 2023 77,428 70,150 At 31 December 2023 77,482 70,150 Extinguishment on conversion (77,428) (70,150) At 30 June 2024 - - On 31 May 2024, the Company announced that, following the receipt of approvals from applicable regulatory authorities in the US, UK, and Republic of Ireland, the Company's convertible preference shares would be converted into Ordinary Shares. As part of this transaction, all convertible preference shares were converted into ordinary shares, resulting in the issuance of 469,263,291 new ordinary shares. The conversion was executed at the agreed conversion price of 16.5 pence per ordinary share. The carrying amount of the preference share capital was transferred to share capital and share premium. HSQ Investment Limited ("HSQ"), a wholly owned indirect subsidiary of funds managed and/or advised by Pollen Street Capital Limited ("Pollen Street"), will be beneficially interested in a total of 469,263,291 Ordinary Shares representing approximately 68.4 per cent of the enlarged issued share capital of the Company. Preferential dividends on the convertible preference shares continued to accrued and has been recognised until the date of conversion, daily at a fixed rate of five per cent per annum. The Company and HSQ are currently in discussions regarding the treatment and settlement of these accrued dividends, with further announcements to follow. 14 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. Six Months to Six Months to Year Ended 30 June 2024 30 June 2023 31 Dec 2023 (unaudited) (unaudited) (audited) (restated) ��'000 ��'000 ��'000 Loss before tax from continuing operations (5,895) (10,091) (13,261) Profit/(loss) for the year from discontinued operations, net of tax - 172 (636) Loss before tax (5,895) (9,919) (13,897) Depreciation and amortisation 2,634 2,957 6,046 Goodwill adjustment - - - Finance costs 7,227 6,639 12,966 Remuneration charge (deferred consideration) 704 259 474 Share-based payment expense 130 499 456 Other losses / (gains) (254) - (224) Other non cash items 519 - 846 (Gain) on disposal of businesses, net of disposal costs - - (1,039) Tax paid (148) (175) - Operating cash flows before movements in working capital 4,917 260 (5,628) (Increase)/decrease in receivables 3,376 6,318 (9,804) Increase/(decrease) in payables (5,465) (2,726) 8,769 Net cash inflow / (outflow) from operating activities 2,828 3,852 (4,593) 15 Financial instruments The following table states the classification of financial instruments and is reconciled to the Statement of Financial Position: 30 Jun 2024 30 Jun 2023 31 Dec 2023 Carrying amount Carrying amount Carrying amount (unaudited) (unaudited) (audited) (restated) ��'000 ��'000 ��'000 Financial assets measured at amortised cost Trade and other receivables 10,492 8,049 14,295 Cash and cash equivalents 15,459 22,939 18,704 Financial liabilities measured at amortised cost Trade and other payables (9,363) (11,334) (15,654) Loans and borrowings (77,611) (64,984) (62,879) Non-current portion of lease liability (1,982) (2,519) (2,357) Financial liabilities measured at fair value through profit and loss Deferred consideration payable (18,130) (28,072) (26,274) (81,135) (75,921) (74,165) 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 18,130 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 16 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 June 2024 30 June 2023 31 Dec 2023 (unaudited) (unaudited) (audited) 2024 2023 2023 ��'000 ��'000 ��'000 Salaries and other short-term employee benefits 432 665 943 Other related parties During the period, KHL incurred fees of ��50,000 (30 June 2023: ��50,000; 31 December 2023: ��104,000) from KPI (Nominees) Limited in relation to Non-Executive Director remuneration. At 30 June 2024, ��nil of these fees remained unpaid (30 June 2023: ��nil; 31 December 2023: ��nil). Fees paid for financial and due diligence services to Kingswood LLP, in which Gary Wilder and Jonathan Massing hold a beneficial interest, totalled ��28,726 for the period to 30 June 2024 (30 June 2023: ��69,469; 31 December 2023: ��171,353), of which ��nil (30 June 2023: ��nil; 31 December 2023: ��nil) was outstanding at 30 June 2024. 17 Business combinations On 6 February 2024, the Company's Irish subsidiary, Moloney Investments Ltd ("MMPI"), completed the "bolt-on" acquisition of BasePlan Ltd ("BasePlan"), a retirement planning advice firm based in Dublin, Ireland, following regulatory approval. MMPI acquired 100% shareholding of Baseplan for a total cash consideration of ��3.1m (���3.65m). Based in Dublin, Ireland, BasePlan is a long established and leading financial advisory firm which has been providing client led financial and retirement planning and wealth management services for over 30 years. The BasePlan acquisition increased the Group's assets under management by ���130m during the period. Details of the fair value of identifiable assets and liabilities acquired the purchase consideration and goodwill are as follows: Book value Adjustment Fair value �� 000 �� 000 �� 000 Intangibles assets- customer relationships - 2,361 2,361 Trade and other receivables 48 - 48 Cash 28 - 28 Payables (75) - (75) Deferred tax liability - (590) (590) Total identifiable net assets 1 1,771 1,772 The trade and other receivables were recognised at fair value, being the gross contractual amounts. 17 Business combinations (continued) Fair value of consideration paid: The acquisition has been accounted for using the acquisition method and details of the purchase consideration are as follows: 2024 ��'000 Initial cash paid 3,115 Deferred cash consideration - Total purchase consideration 3,115 Goodwill recognised on acquisition 1,343 Acquisition costs have been recognised as transaction costs under acquisition-related adjustments in the Consolidated Statement of Comprehensive Income. The main factors leading to the recognition of goodwill are: ��� the strategic foothold the BasePlan team and business gives the Group in Ireland, Dublin; and ��� the ability to leverage BasePlan platform and achieve economies of scale. Consideration: 2024 ��'000 Net cash outflow arising on acquisition: Total purchase consideration 3,115 Less: Deferred consideration - Initial cash paid to acquire BasePlan 3,115 Less: cash held by BasePlan (28) Net cash outflow 3,087 MMPI's acquisition of BasePlan formed an expected part of Kingswood's acquisition of MMPI in March 2023. An additional amount of ��1.54m (���1.8m) was paid to MMPI by the Company as part of the completion proceeds of MMPI which was held pending receipt of the required regulatory approvals. This amount has been recognised as additional goodwill on the MMPI acquisition during the year. 18 Ultimate controlling party As at the date of approving the financial statements, the ultimate controlling party of the Group was HSQ Investment Limited, a wholly owned indirect subsidiary of funds managed and/or advised by Pollen Street Group Limited. HSQ Investment Limited, holds 68.40% of the voting rights and issued share capital of the Group. 19 Events after the reporting date On 15th August 2024, the Company obtained an additional ��6.0m debt facility from Pollen Street Capital Limited. This funding was obtained to provide the necessary capital for the Company to meet upcoming deferred payment obligations related to previous acquisitions. The key terms of the Facility Agreement are as follows: - ��6.0m facility; - Repayment date of earlier of 29 October 2030 or date of an exit or partial exit; and - Interest rate of 12%, paid at maturity. 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