Listed international firm DWF has said it is already seeing signs of recovery as cost savings take effect. The firm reported to the London Stock Exchange today that revenue for the three months to 31 July was up 20% to £84.3m. But the bullish statement accompanied annual results showing a sharp fall in underlying adjusted profit before tax, attributed to the impact of the pandemic.
In the quarter ending 31 July the firm said it made a £600,000 loss, against £1.9m in pre-tax profit in the same period last year.
DWF said the £600k profit-before-tax loss includes a number of costs related to acquisitions that are included as requirements of accounting standards. Instead it has produced alternative performance measures, one of which is underlying adjusted PBT, to give a 'more representative picture' of underlying commercial performance of the business, which shows a £7.4m profit, up 231%.
The firm described the quarter’s performance as a ‘strong recovery’ and noted that net debt by the end of July was £9.7m lower than in April, while lock-up days were down from 206 to 200 – reflective, it said, of trading conditions returning to normal.
Sir Nigel Knowles, group chief executive, said: ‘The strength and resilience of the group and our differentiated model has been evident in the first three months of FY21. We have seen strong activity levels generating positive momentum across the business.
‘We have also taken decisive action focused on consolidating our existing operations to increase profitability, delivering cost efficiencies and improving lock-up and cash generation. Measures to scale-up managed services and optimise the international division will position DWF well for FY21 and beyond.’
Annual results for the year ending 30 April 2020 showed that reported profit before tax increased almost 40% to £18.2m, based on net revenue of £297.2m (up 10.9%). However underlying adjusted earnings before interest, taxes, depreciation and amortisation and underlying adjusted profit before tax were down by 21.6% and 32.4% respectively.
The firm, which listed on the main market of the London Stock Exchange last year, has had a tumultuous few months since shared plummeted at the start of the pandemic. It replaced its chief executive Andrew Leaitherland in May and announced job cuts and the closure or scaling back of operations in Cologne, Dubai, Singapore and Brussels.
DWF Group shares rose by 3.3% to 63p on the announcement. They had been as high as 140p in March.