Kingswood H. Regulatory News (KWG)

28 September 2012

Kingswalk Investments Limited

Unaudited interim results for the six months ended 30 June 2012

Kingswalk Investments Limited (AIM: KWI), the strategic investment company focused on financial services sector investments, today announces its unaudited results for the six months ended 30 June 2012.

Highlights

·; Transformational acquisition of 33.3% of European Wealth Management Group plc, whose assets under management have more than doubled to £320 million since investment;

·; £700,000 of new equity raised;

·; Net assets increased by £1.47 million to £1.85 million at period end;

·; Strong performance in small cap portfolio with c17% increase in carrying value; and

·; Board strengthened with three new directors.

Paul Everitt of Kingswalk Investments Limited, said:

"The first half of 2012 has been a key period in the development of the Company, particularly with the successful investment into European Wealth. The Directors are in regular contact with all of its investee companies and the board anticipates providing further financial and management support over the near future to enable these companies to fulfil their potential. The Directors are also in discussions with other businesses in the financial services sector that complement European Wealth which may lead to further investment opportunities where the directors believe the Company is well placed to take advantage of the current challenging environment.

The directors would like to thank the Company's shareholders for their continued support over the recent months and anticipate being able to deliver additional positive news in due course."

ENDS

Kingswalk Investments Limited

Paul Everitt: +44 (0)14 8173 2888

www.kingswalkinvestments.com

Daniel Stewart & Company Plc - Nominated Adviser and Broker

Antony Legge, Director, Corporate Finance: +44 (0)20 7776 6550

GTH Communications

Toby Hall: +44 (0)20 3103 3903

Suzanne Johnson Walsh: +44 (0) 3103 3902

The report is available to view and download from the Company's website at www.kingswalkinvestments.com

DIRECTORS' REVIEW

Overview

We are pleased to present the Company's unaudited interim results for the six months to 30 June 2012 to shareholders. The period under review has been a transformational one for the Company, with the significant investment into European Wealth Management Group plc completed in April at the same time as the strengthening of the board with three new directors.

The Company successfully raised £700,000 in May from new investors to support its investment policy and during the period under review, the Company's underlying investments also performed well and in line with expectations.

Kingswalk is a Guernsey registered strategic investment company with a focus on investing in financial services businesses. The Board's aim is to bring together high quality, complementary financial services businesses in order to build an integrated financial services group.

Summary of investments

European Wealth Management Group plc ("European Wealth")

Kingswalk acquired 33.33% of the ordinary share capital of European Wealth on 30 April 2012, for which consideration was the issue of an aggregate of 92,000,000 new ordinary shares in the Company.

European Wealth is the Company's first major investment under its focused strategy of investing in financial services business. European Wealth is a fast growing private wealth management business founded in 2010 with headquarters in London and offices in Brighton, Cheltenham, and Maidstone. Through its operating subsidiaries, which are authorised and regulated by the Financial Services Authority, European Wealth provides investment management and financial planning services.

Since Kingswalk's investment in April 2012, European Wealth's contracted assets under management ("AUM") have more than doubled from approximately £155 million to approximately £320 million as at today with a further £100 million of AUM expected to be transferred in over the next six months. European Wealth seeks to provide a highly personal service to its clients while building a scalable and recognisable brand and capitalising on back office synergies and cost savings.

Since inception, European Wealth has completed two acquisitions. The first acquisition was of Mathews Smith (Financial Consultants) Limited ('Mathews Smith'), a Maidstone-based independent financial adviser in March 2011 and the second was of Aventus Capital Management ("Aventus"), a Cheltenham-based investment management business previously owned by law firm Rickerbys LLP, in January 2012. 

European Wealth is constantly identifying further acquisition targets and is currently in detailed discussions with a number of these targets. One such target is a business with turnover of approximately £1.0 million specialising in managing group pension schemes.

In May 2012, the Company entered into a three year loan agreement with European Wealth to lend £640,000 to European Wealth at 10 per cent. interest p.a., with seven equal quarterly repayments commencing in November 2013.

The Company today announces that it has agreed to enter into a new three and a half year unsecured loan with European Wealth for a further £182,000 at 10 per cent. interest p.a. with two equal repayments of principal in December 2015 and March 2016 ("September Loan"). The September Loan is to be used by European Wealth to acquire a South East based independent financial planning business with more than 300 clients. The directors of European Wealth believe this acquisition will be a perfect fit for its existing operations in the region as it has a high proportion of recurring revenues (

Under AIM Rule 13, the September Loan represents a related party transaction by virtue of Kishore Gopaul, a non-executive director of the Company, also being a shareholder and director of Courvoisier & Associés SA, a 31.3 per cent shareholder in European Wealth. Accordingly, the directors of the Company, with the exception of Kishore Gopaul, having consulted with Daniel Stewart & Company, the Company's nominated adviser, consider the terms of the September Loan to be fair and reasonable in so far as Kingswalk's shareholders are concerned.

European Wealth is rapidly growing, taking advantage of the regulatory changes in the market place and the ever demanding needs of its customers. European Wealth has traded in line with its management's expectations since the Company's investment and the board of the Company has high expectations that it will deliver significant value to Kingswalk's shareholders in the coming months and years.

Quoted small cap equity portfolio

The Company's quoted small cap equity portfolio performed well during the period, increasing in value from £157,529 at the start of the period to £184,011 at the period end, an increase of almost 17 per cent. The board took the decision to liquidate the majority of the portfolio since the period end, in part to fund the September Loan, as described above, and in part to fund the Company's day-to-day operating expenses.

Short term financing loans

The Company's short term loan book was reduced during the period, with all interest and capital repayments received when due. At the period end, £72,000 was due for repayment and as at the date of this report, £44,000 remains outstanding.

CMS Corporate Consultants Limited ("CMS")

CMS, the wholly owned London based corporate consultants to growth companies, performed in line with expectations, trading profitably on unaudited revenues of £266,000 during the period, an increase of more than 10% on the prior year.

Financial review

The Company's net loss for the period was £169,382 (H1 2011: £158,951). The loss was primarily a result of legal and professional fees associated with the Company's investment into European Wealth in April 2012 and the Company's £700,000 equity subscription completed in May 2012, the aggregate costs for which were approximately £128,000. On a like for like basis, ordinary course operating and administrative expenses incurred during the period totalled £93,632 compared to £99,964 in the same period in the previous year.

The carrying value of the Company's portfolio of investments at the period end increased by £1,590,112 during the period, of which £1,563,630 was attributable to the new investment in European Wealth (£923,630 of equity interest and £640,000 of long term loan). The balance of £26,482 was an increase in value of the quoted small cap equity portfolio brought forward.

The Company benefited during the period from interest received on short term loans made of £25,253 (H1 2011: £7,500). Loss per share for the period reduced to (0.11) pence (H1 2011: (0.18) pence).

The carrying value of the Company's investments was £1,787,641 at the period end (31 December 2011: £197,529). At 30 June 2012, the Company had net current assets of £66,100, comprised of cash of £34,945, short term loans made of £72,000, other debtors and prepayments of £25,378, offset by creditors and accruals of £66,223. The Company was debt free at the period end. At 30 June 2012, the Company's net asset value per share stood at 0.66 pence per share, an increase of more than 60% over the period.

Director changes

On 9 January 2012, Timothy Revill joined the board as a non-executive director and on 30 April 2012, Kishore Gopaul and Roderick Gentry joined the board of the Company as non-executive directors. Both Kishore and Roderick are directors and shareholders of European Wealth. On 30 July 2012, at the Company's annual general meeting, August Berting and Daan van den Noort both stepped down as non-executive directors.

Current trading and outlook

The first half of 2012 has been a key period in the development of the Company. The Directors are in regular contact with its investee companies and the board anticipates providing further financial and management support over the near future to enable these companies to fulfil their potential. The Directors are also in discussions with other businesses in the financial services sector to complement European Wealth which may lead to further investment opportunities where the directors believe the Company is well placed to take advantage of the current challenging environment.

The directors would like to thank the Company's shareholders for their continued support over the recent months and anticipate being able to deliver additional positive news in due course.

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

30 JUNE 2012

1. ACCOUNTING POLICIES

(a) CONVENTION

These unaudited interim results have been prepared using the same accounting policies, presentation and methods of computation adopted in the last audited financial statements, which were prepared in accordance with applicable United Kingdom Accounting Standards.

2. EARNINGS PER SHARE

The calculation of basic earnings per share is based on the net return on ordinary activities after tax for the period and on the weighted average number of ordinary shares in issue during the period. Accordingly, the weighted average number of ordinary shares in issue for the six months ended 30 June 2012 was 149,133,786 (2011: 87,867,806).

3. CALLED UP SHARE CAPITAL

On 30 April 2012, the Company issued and allotted 92,000,000 ordinary shares of 1p each in consideration for the acquisition of 33.33% of the issued share capital of European Wealth. On the same day, the Company announced, subject to the approval of its shareholders which was sought at the extraordinary general meeting held on 14 May 2012 ("May EGM"), its intention to undertake a share capital reorganisation and issue and allot 93,333,333 new ordinary shares of 0.1p each fully paid at 0.75p per new ordinary share in order to raise new funds for the Company totalling £700,000.

On 14 May 2012, the Company issued and allotted 3,200,000 new ordinary shares of 0.1p each in settlement of an outstanding loan by the Company valued at £24,000.

As at 30 June 2012 and the date of this report, the Company has an aggregate of 281,705,006 ordinary shares of 0.1p in issue.

At the May EGM, as part of the share capital reorganisation approved thereat, the Company's shareholders approved the creation of -185,171,673 deferred shares of 0.9p each ("Deferred Shares"). The Deferred Shares do not entitle the holder thereof to receive notice of or attend and vote at any general meeting of the Company or to receive a dividend or other distribution or to participate in any return on capital on a winding up other than the nominal amount paid on such shares. The Company has the right to redeem and cancel the Deferred Shares from any Shareholder for a consideration of one penny in aggregate for all that Shareholder's Deferred Shares. As such, the Deferred Shares effectively have no value and share certificates have not been issued and will not be issued in respect of the Deferred Shares nor have the Deferred Shares been, nor will the Deferred Shares be, admitted to trading on AIM. It is the intention of the directors to redeem all of the Deferred Shares before the end of the current financial year.

4. SHARE PREMIUM ACCOUNT & RESERVES

In accordance with the Company's articles of incorporation and the Companies (Guernsey) Law, 2008 as amended, on 30 June 2012, the Company set off the balance on its share premium account of £5,375,672 against its negative profit and loss account reserve, the effect of which was to eliminate the Company's balance on the share premium account and to reduce the deficit on the Company's profit and loss account reserve as at 30 June 2012 from (£5,503,861) to (£128,189).

5. NET ASSET VALUE PER SHARE

The calculation of net asset value per share is based on the net assets of £1,853,741 (2011: £775,280) and on the ordinary shares in issue of 281,705,006 at the balance sheet date (2011: 93,171,673).