TIDMKGH
RNS Number : 0505U
Knights Group Holdings PLC
21 November 2023
21 November 2023
Knights Group Holdings plc
("Knights", the "Company" or the "Group")
Trading Update for the Six Months Ended 31 October 2023
Performance in line with expectations for the full year
Knights, a UK legal and professional services business, today
provides a trading update for the half year ended 31 October
2023.
The Group's first half performance is in line with the Board's
expectations. The Group anticipates half year revenue of
c.GBP75.3m, an increase of 6% compared to the prior year (H1 23:
GBP71.2m), with underlying PBT(1) anticipated to be c.GBP11.5m, an
increase of 28% on the prior year (H1 23: GBP9.0m) with underlying
PBT margin increasing from 12.6% to 15.3%.
This performance is supported by a return to low single-digit
organic growth in the period, notwithstanding a challenging
backdrop in the housing and M&A markets.
The Group's continued discipline on cash collection has
delivered debtor days of 31 as at 31 October 2023, in line with the
32 days achieved as at 31 October 2022 and 30 days at 30 April
2023, with total lock-up(2) improving to 93 days compared to 103
days at October 2022.
This focus on cash has resulted in net debt(3) of c.GBP38.3m at
31 October 2023 (H1 23, GBP35.6m, FY 23: GBP29.2m), after c.GBP7.5m
of acquisition consideration, debt and related costs in the first
half, providing significant headroom against the Group's recently
increased GBP70m revolving credit facility.
The Group has recruited 20 senior hires in the half year,
compared to nine in the same period last year, many of whom have
been attracted by Knights' differentiated ownership and business
model, which offers no financial risk, compared to traditional
equity partnership. Churn for the period was six percent, compared
with 11% for the same period last year.
The integration of prior year acquisitions, Coffin Mew
(Portsmouth) and Meade King (Bristol), has been successful and both
are performing well, despite challenging market conditions for the
residential property sector in the period.
During the first half, the Group completed the acquisition of St
James Law (Newcastle) and Baines Wilson (Carlisle), further
strengthening the Group's presence in the North. Both acquisitions
are integrating well and performing in line with the Board's
expectations.
David Beech, CEO of Knights, commented:
"We continue to execute our strategy successfully, delivering
profitable, cash generative growth, while focusing on delivering a
premium service.
"Entering the second half, we are encouraged by the Group's
strong performance, as we continue to attract high quality,
talented professionals, and monitor an attractive and growing
pipeline of potential acquisitions for the Group."
Knights will provide a further update on trading with its half
year results announcement in mid-January 2024.
Ends
Notes
(1) Underlying PBT is before amortisation of acquired
intangibles, non-underlying costs relating to acquisitions,
non-recurring finance costs, restructuring costs in the reporting
period, and non-underlying share based payments. The Board believes
that these underlying figures provide a more meaningful measure of
the Group's underlying performance.
(2) Lock up is calculated as the combined debtor and WIP days as
at a point in time. Debtor days are calculated on a count back
basis using the gross debtors at the period end and compared with
total fees raised over prior months. WIP days are calculated based
on the gross work in progress (excluding that relating to clinical
negligence claims, insolvency, and ground rents, as these matters
operate mainly on a conditional fee arrangement and a different
profile to the rest of the business) and calculating how many days
billing this relates to, based on average fees (again excluding
clinical negligence claims, insolvency, and ground rents fees) per
month for the last 3 months.
Lock up days excludes the impact of acquisitions in the last
quarter of the reporting period.
(3) Net debt excludes lease liabilities
Enquiries
Knights
David Beech, CEO Via MHP
Numis (Nomad and Broker)
Stuart Skinner, Kevin Cruickshank 020 7260 1000
MHP (Media enquiries)
Katie Hunt, Eleni Menikou, Rob 020 3128 8100
Collett-Creedy +44 (0)7736 464749
knights@mhpgroup.com
Notes to Editors
Knights is a legal and professional services business, ranked
within the UK's top 50 largest law firms by revenue. Knights was
one of the first law firms in the UK to move from the traditional
partnership model to a corporate structure in 2012 and has since
grown rapidly. Knights has specialists in all key areas of
corporate and commercial law so that it can offer end-to-end
support to businesses of all sizes and in all sectors. It is
focussed on key UK markets outside London and currently operates
from 23 offices located in Birmingham, Brighton, Bristol, Carlisle,
Cheltenham, Chester, Exeter, Kings Hill, Leeds, Leicester, Lincoln,
Manchester, Newbury, Newcastle-upon-Tyne, Nottingham, Oxford,
Portsmouth, Sheffield, Stoke, Teesside, Weybridge, Wilmslow and
York.
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END
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November 21, 2023 02:00 ET (07:00 GMT)
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