Knights Group Hldgs – Half-year Results

Knights Group Hldgs – Half-year Results

Knights, one of the UK's fastest growing legal and professional services businesses, today announces its half year results for the six months ended 31 October 2019.

Financial highlights

·      34% increase in revenue to £32.0m (HY 2019: £23.9m), including 13% organic revenue growth

·      Underlying PBT(1) rose by 20% to £5.3m (HY 2019: £4.4m) or by 24% from £4.2m in HY 2019 on a restated IFRS 16 basis

·      Underlying EPS(1)  increased by 9% to 5.95p (HY 2019: 5.48p) or by 14% from 5.24p in HY 2019 on a restated IFRS 16 basis

·      Basic EPS increased by 68% to 2.88p (HY 2019 : 1.71p) or by 96% from 1.47p in HY 2019 on a restated IFRS 16 basis

·      Good underlying cash conversion(2) at 77%, (HY 2019: 138%) following significant investment in recruitment to drive organic growth

·      Net debt of £17.1m as at 31 October 2019, reflecting a net cash outflow in the period mainly due to the payment of deferred consideration and the one off increased corporation tax payments, £1.4m ahead of management plan (31 October 2018: £9.5m)

·      Interim dividend up 83% to 1.10p (HY 2019: 0.6p)

 

Operational highlights

·      Strong momentum in recruitment and continued investment to support organic growth

Successfully recruited a net 43 fee earners in the first half, compared to 46 fee earners in the full year to 30 April 2019

 

Average fees per fee earner of £126,000 (HY 2019: £131,000), despite a lag effect due to the higher level of new joiners who take some time to achieve the normal run rate on fee generation

 

Recruited 15 operational staff and expanded operational management with new Client Services Director and Recruitment Director appointments, to support ongoing growth

 

Progress in embracing technology to improve efficiency and provide a scalable operational backbone

 

Relocated to larger offices in Manchester

 

Recruited 18 fee earners for a new office in York which will officially open in January 2020

 

 

·      Continued development of prior period acquisitions with integrated businesses providing platforms for expansion

 

Increased presence in Manchester, Leicester and Oxfordshire with the growth from 248 fee earners at the time of the acquisitions of Turner Parkinson, Cummins, Spearing Waite and BrookStreet to 290 fee earners at the end of the first half

 

Current trading and outlook

 

·      Confident of meeting the Board's expectations for the full year:

A strong start to the second half

Acquired two businesses, providing a high quality platform from which to grow our operations in Birmingham in Q3:

EGL on 1 November 2019 with 28 fee earners

ERT on 6 January 2020, adding 24 fee earners

Continued momentum in recruiting high quality professionals with a further 31 accepting positions as at 31 October 2019

Attractive acquisition pipeline of independent law firms outside of London continues to grow

 

David Beech, CEO of Knights, commented:

"The Group has delivered another period of strong, profitable growth including double digit organic growth. This performance, combined with our investments in the hiring of fee earners and operational support colleagues, premises and systems, positions Knights well to continue to build the leading legal and professional services business outside London.

 

"The clear momentum we have in recruiting strong talent, the successful development of prior period acquisitions and the acquisition of two high calibre businesses in the second half of the year, underpins our confidence that the Group will meet the Board's expectations for the full year."

No Comments

Post a Comment