Beech: Confident of delivering growth plans
Listed law firm Knights is planning to “double the business in medium term” as revenue hit £150m for the first time.
The commercial firm said it has made an “encouraging start” to the current financial year too, with a strong recovery in residential property, as it share price reached 138p, up from 122p at the start of the year and a near all-time low a year ago of 64p.
Reporting its results for the year to 30 April 2024, Knights said it was “focused on client acquisition and deeper collaboration across offices to bring more services to existing clients”.
Revenue increased by 6%, from just over £142m to £150m, with a strong improvement in lock-up days, falling from 87 the previous year to 78. Chief executive David Beech said this was the “12th consecutive year of profitable revenue growth”.
Contributions from acquisitions accounted for 4% of the growth, with turnover growing by a further 2% organically.
“Good growth in our non-cyclical work”, such as private wealth, dispute resolution and our “growing regulatory team” more than offset “softer performances from the more cyclical residential property and corporate activities”.
Net debt rose £6m to £35m, after a cash outlay of £11.3m on acquisitions and a joint venture investment in Convex Corporate Finance, which was bought from another listed legal business, RGB Holdings.
Knights said it expected to deliver its plan to double in size through both organic growth and continued acquisitions – it has bought 21 practices since listing in June 2018
The firm said 40 senior fee-earners joined in the year, up from 27 the year before. Stronger retention reduced staff “churn” from 18% to 12%.
Knights said the law firms it bought during the financial year – St James Law in Newcastle and Baines Wilson in Cumbria – were both trading ahead of expectations and providing “strong platforms for future organic growth”.
Meanwhile, there was an “active pipeline of attractive acquisitions” and the firm was “confident of delivering a meaningful improvement in organic growth in the current financial year”.
Mr Beech commented: “Knights has delivered a good performance against a challenging market backdrop, reflecting the strength of our diversified service offering, and continued execution against our strategy, and building on our strong track record of profitable growth since IPO in 2018.
“We have diversified our service offering, won a number of new clients, sharpened our focus on operational excellence and made considered strategic acquisitions, bolstering our scale in the North, an important region.
“This progress, together with an encouraging start to the year, including a strong recovery in residential property, in line with our expectations, means we are confident in delivering our ambitious plans to double the size of the business in the medium term.”
Knights declared a final dividend of 2.79p, which, together with an interim dividend of 1.61p per share, gave a total dividend for the year of 4.40p.
Leave a Comment