Listed firm Knights today posted a small fall in profits for last year but insisted financial performance overall had been ‘robust’. Knights Group Holdings announced to the London Stock Exchange that underlying profit before tax fell 2% to £18.1m for the year ended 30 April – a figure trailed earlier this year when the company indicated that results would be below previous expectations.
That profit warning caused shares to almost halve in value, but today’s statement had the opposite effect, with shares up 13% in the first hour of trading to 107.5p. Knights has now proposed a dividend of 3.5p, having paid nothing to shareholders last year and 1.1p in 2020.
Revenue increased this year by 22% to £125.6m, although that would be expected given the acquisition of Keebles, Archers and Langleys during the period. Last week, the firm also completed the purchase of south of England firm Coffin Mew, providing a presence in Portsmouth, Southampton, Brighton and Newbury.
The figures also show profit margin down from 17.8% to 14.4%, while net debt increased from £21.1m to £28.9m as of April 2022. The firm shelled out £18m in initial and deferred payments relating to acquisitions.
In its current trading position and outlook, Knights reported a positive start to the new year and an acquisition pipeline ‘growing in quality and quantity’.
While uncertainty around economic conditions persists, it was noted, the board considers that the business is ‘highly resilient, with a significant market opportunity, the right strategy and team in place to deliver on it, giving confidence in its medium-term outlook’.
David Beech, chief executive, said: ‘We have delivered another robust financial performance despite the short-term challenges experienced in the fourth quarter, with a positive start to the new financial year supported by the acquisitions completed in prior years. We continue to execute our strategy and remain confident in our outlook.’
The firm has grown from two offices and £9m annual revenue 10 years ago to being a top-50 practice based in 22 offices.
The group now employs 1,348 people (up from 1,163 the year before) and has 1,080 fee earners. Staff costs rose from £62.7m to £76.9m during the year.
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