LONDON (Alliance News) - European Wealth Group Ltd Tuesday said it swung to a loss in the first half of 2015 and said it has bought the financial planning business of legal firm Bells Solicitors Ltd for GBP675,000 in a cash and shares deal.
The wealth management company said it made a GBP0.4 million loss in the six months to June 30, having made a GBP0.3 million profit the prior year, even though revenue rose to GBP3.8 million from GBP2 million, as it booked higher costs and administrative expenses.
It also warned that the second half of the year will face many challenges, following a volatile summer dominated by a declining Chinese economy, interest rate increases in the UK and US and general concerns over the outlook of the world economy. Revenue so far in the second half has therefore been lower than anticipated, European Wealth said.
"The combination of uncertainties in the global markets and the underlying dynamics of the wealth management industry will continue to create meaningful opportunities for the group - allowing us therefore to continue building on the strategy of growth by acquisition, attracting revenue-generating staff and organic growth. At the same time we will be continuing to control the underlying costs within the group to continue building profitable growth," Chairman John Morton said in a statement.
Separately, European Wealth said it has bought the financial planning business of legal firm Bells Solicitors Ltd for GBP675,000 in a cash and shares deal. It will pay 80% of the acquisition cost will in cash, with the remaining 20% to be satisfied through the issue of 53,333 new shares.
It will pay GBP224,000 on completion, GBP302,170 on the 14 month anniversary, and GBP148,830 two years after completion.
Bells Financial Planning business primarily advises high-net-worth individuals and private clients and is based in Farnham, Surrey.
"This is an excellent example of the "win-win-win" philosophy on which European Wealth is based. Not only are we able to provide a meaningful exit for the owners of the business for whom the financial planning aspect was non-core, but our systems mean the business can be easily integrated into our group thereby ensuring a near seamless transition for the underlying clients. We believe it will provide an excellent platform for further growth in the locality," Morton said.
Shares in European Wealth were untraded Tuesday morning, last quoted at 83.00 pence.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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