Listed international firm DWF says planned costs savings are likely to be greater than expected, as it responds to challenging economic conditions.
The firm said today that it will have slashed costs by £15m by the end of the current financial year, exceeding December's forecast of £10m-12m.
The savings are necessary to protect the business from broader inflationary costs pressures and interest rate rises, the firm told investors.
In an upbeat trading statement released to the London Stock Exchange, DWF said its performance in the last year ‘compares favourably’ with the wider legal sector, with working capital stabilised and lock-up days expected to reduce ‘in the near term’.
Sir Nigel Knowles, chief executive, said: ‘Our performance continues to show how robust a business we are, even in a challenging environment. We have delivered consistently strong revenue growth and underlying organic growth, with the initial benefits of our cost control programme also coming through.’
The firm is expecting to report that in the year ended 30 April, revenue increased by 8% to around £380m. Lock-up days were 190 compared to 179, but this was in line with expectations following an increase in the first half of 2022/23.
The trading statement did not mention profit expectations.
Underlying revenue has risen by 5% through organic growth, with the remainder accounted for by the £27m acquisition of Canadian firm Whitelaw Twining.
DWF said it had enjoyed a ‘greater degree of stability and normality’ compared to the Covid-impacted prior periods, and it has started to benefit from cost-cutting measures, although most of the benefit is expected to be seen in FY24 and beyond.
The firm was the biggest existing law firm to list on the stock exchange in 2019, but like so many other public companies suffered in the pandemic. The share price dropped from around 140p in early 2020 to just 53p by July of that year. At the height of the pandemic the firm moved to calm stock market jitters by announcing earnings early. Around 60 jobs were cut, and offices were shut in Brussels and Singapore.
Trading performance improved steadily until the start of 2022 but since then the share price has drifted again and currently stands at 65.8p (up 6% today).
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