Knights, one of the UK's fastest growing legal and professional services businesses, today announces its maiden full year results for the year ended 30 April 2019.
· 51% increase in revenue to £52.7m (FY 2018: £34.9m)
o 15% organic revenue growth
· Underlying EBITDA1 grew by 51% to £11.3m (FY 2018: £7.5m)
o Underlying EBITDA margin maintained at 21.5% (FY 2018: 21.5%)
· Underlying PBT2 rose by 104% to £9.8m (FY 2018: £4.8m)
· Underlying EPS3 increased by 55% to 11.88p (FY 2018: 7.68p)
· Exceptionally strong cash conversion4 of 115%, up from 71% in 2018
· Net debt of £14.1m as at 30 April 2019 was £3.7m lower than expected (30 April 2018: £26.3m)
· Proposed final dividend of 1.27p, giving a total dividend of 1.87p
· Successful AIM admission in June 2018 raised £28.1m net placing proceeds
· Further organic growth and investment, coupled with enhanced productivity:
o Increased average fees per fee earner by 22% to £131,000 (FY 2018: £107,000)
o Successfully recruited a net 46 fee earners during the year
o Reduced staff costs as percentage of revenue despite investment for future growth
o Secured a modern, larger office to support expansion in Manchester
· Acquired, integrated and derived planned synergy savings from four quality acquisitions:
o Top corporate law firm by deal volume across the North-West, Turner Parkinson (June 2018)
o Leading independent legal services business in Leicester, Spearing Waite (October 2018)
o Leicester based quality employment specialist, Cummins Solicitors (January 2019)
o Leading commercial law firm in Oxfordshire, BrookStreet des Roches (April 2019)
· Strengthened Board and leadership team with Richard King appointed as Chief Operating Officer, Jane Pateman appointed as Non-Executive Director and senior appointments made in Compliance, HR and Sales
· Agreed a new extended revolving credit facility of £27m until June 2023
Current trading and outlook
· The Group has made a good start to the financial year, in line with our expectations
· Confident of delivering further progress as we scale up the business:
o Continue to realise the benefits of recent hires and acquisitions
o Strengthened and diversified platform supports continued profitable growth
o Strong momentum in recruitment has continued
· Continue to selectively review a healthy pipeline of acquisition opportunities
David Beech, CEO of Knights, commented:
"I am delighted to report our first set of full year results as a listed business, in which we have delivered cash generative, profitable growth. Our strong organic growth, combined with four high quality acquisitions during the year, means we are now a more diversified business with strengthened positions in our key target markets.
"The Group has made a good start to the financial year and we have the team and financial resources in place to deliver our organic and acquisitive growth strategy as we scale up to be the leading legal and professional services business outside London.
"Our recent listing has already supported our ability to deliver that strategy by helping us to acquire four leading firms and we are now starting to see it benefit our ability to attract high calibre candidates into the business."
1 underlying EBITDA is calculated before non-underlying costs, which comprised transaction costs of £0.6m (FY 2018: £0.3m), acquisition related redundancy costs of £0.7m (£0.1m), one off share based payment charges of £0.3m (FY 2018: nil) and contingent consideration of £0.2m (FY 2018: nil).
2 underlying PBT is calculated before non-underlying costs as above and non-recurring finance costs of £1.9m (FY 2018: nil) and interest on deferred consideration of £0.1m (FY 2018: nil).
3 underlying EPS is calculated before those items excluded from underlying PBT and the related tax charge and the comparative has been calculated on illustrative basis assuming 50 million shares in issue, in accordance with merger accounting principles.
4 cash conversion is calculated based on the conversion of underlying PAT to free cash flow.
The above definitions are applied throughout the announcement and, for further details, a full glossary of alternative performances measures has been included at the end of the announcement.
A presentation of the full year results will be made to analysts at 9.30am today at Numis' offices. To register interest in attending, please contact Robert Collett-Creedy at MHP Communications on 020 3128 8147 or email [email protected]