Listed outfit Knights is expecting to post an increase in underlying annual profits as it continues to expand rapidly through acquisitions.
In a full-year trading update today, the group forecasts full-year revenue of about £162m for the year to 30 April, an 8% increase on 2024. Underlying profit before tax is expected to come in 11% higher at £28m (£25.3m), which Knights said reflects improved margins.
Expected profit incorporates a £500,000 deduction of share-based payment charges relating to an executive share scheme introduced last November.
Knights, listed on the AIM secondary market, has acquired over 20 firms since 2018 and is becoming ever more ambitious. Since the year end the group has agreed a £16.6m deal to bring on board Essex practice Birkett Long. This followed its biggest purchase to date, a £30m deal announced in March to buy IBB Law.
‘The group continues to consider selective acquisitions from its healthy pipeline of opportunities, in line with its value-accretive acquisition strategy,’ Knights said.
The buyouts have taken their toll on the balance sheet. Net debt climbed from £35.2m in 2024 to £65m at 30 April after £30m cash was paid in relation to acquisitions. But the group said it continues to show ‘excellent working capital discipline’, with debtor days at the year end of 31 (FY24: 28).
Chief executive David Beech commented: ‘During the year, Knights has made significant progress. It is now recognised as the UK’s only legal services firm with true national scale, that retains a strong regional focus. With the group experiencing a return to lower levels of churn in the second half of the financial year and positive momentum in the business continuing into the current year, we remain confident in delivering further growth in FY26.’
Due to the recent spurt of acquisition activity Knights will not post its full-year results for 2024-25 until September.
Knights shares fell 3% to 165p in early trading, after hitting a year-high of 170p on 12 May.
1 Reader's comment