REG - Knights Group Hldgs - Trading Update

Knights groupAnnouncement

20/11/2024 07:00

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RNS Number : 8682M  Knights Group Holdings PLC  20 November 2024

Knights Group Holdings plc

("Knights", the "Company" or the "Group")

Trading update for the six months ended 31 October 2024

Strong margin improvement, revolving credit facility extended

Confident in delivering a FY performance in line with market expectations

Knights, the national legal and professional services business, today provides
a trading update for the six months ended 31 October 2024.

The Group has delivered a strong performance in the period with underlying
PBT(1) expected to increase by 25.9% to c.£14.6m (H1 24: £11.6m), on
anticipated revenue growth of 5.4% to c.£79.4m (H1 24: £75.3m).  This
reflects a 3.0% pts increase in PBT margin  to 18.4% (H1 24: 15.4%) and
continued strong progression from 12.6% in H1 23.  This strong first half
performance underscores the Group's confidence in delivering a full year
performance in line with market expectations.

In September 2024, the Group acquired Thursfields Legal Limited, a full legal
services business with a national client base, significantly strengthening
Knights' presence in the West Midlands. The business is integrating well, and
is performing in line with expectations.

Momentum in recruitment continues, with 23 senior professionals joining
Knights in the first half (H1 24: 20) and a good pipeline of further hires for
the second half, driven by increased brand awareness and a growing reputation
across the UK legal services market.

Balance sheet and Extended Revolving Credit Facility

The Group's continued strong focus on working capital discipline is reflected
in debtor days(2) at 31 October 2024 of 33 (H1 24: 31 days). Net debt(3) was
£50.1m at 31 October 2024, (at 30 April 2024 : £35.2m) after paying £8.9m
initial and deferred consideration in respect of acquisitions.

The Group has agreed with HSBC UK, AIB (GB) and NatWest to extend its
revolving credit facility to provide total committed funding of £100m (an
increase from the existing £70m) until November 2027 (extended by a year).
The extended facility provides the Group with significant headroom to execute
its value-accretive acquisition strategy as suitable opportunities arise.

UK national insurance

The changes announced in the UK Government's Autumn Budget on 30 October, and
primarily the changes to national insurance contributions, are expected to
have an annualised cost impact of £2m in FY 26, with just one month of the
changes impacting FY 25.  The Group is well-positioned in relation to these
changes through its ongoing focus on growth, efficiency and pricing.

David Beech, CEO of Knights, commented:

"It has been a strong first half and I am particularly pleased with our focus
on profitable revenue growth. The continued improvement in margin reflects the
increasing quality of our revenue, team and our continued focus on the cost
base.

"We are encouraged by our strong momentum in recruitment which continues to
build as Knights' national scale and strong reputation are increasingly
recognised. These factors, together with our ongoing focus on operational
excellence, and early signs of a recovery in corporate and residential housing
work, position us well for a strong performance in the second half in line
with market expectations."

Knights will provide a further update on trading with its half year results
announcement on 14 January 2025.

Ends

 Notes

(1) Underlying PBT is before amortisation of acquired intangibles,
non-underlying operating expenses, and non-underlying finance costs.
Non-underlying operating expenses include transaction and onerous lease
expenses in relation to acquisitions, contingent acquisition payments,
disposal of acquired assets, along with one-off restructuring staff and
professional expenses, mainly incurred on acquisitions, through streamlining
support functions or strategic reorganisations.

(2) Debtor days are calculated on a count back basis using the gross debtors
at the period end and compared with total fees raised over prior months.

(3) Net debt includes cash and cash equivalents, borrowings and acquired debt
but excludes lease liabilities.

 

Enquiries

 Knights
 David Beech, CEO                                 Via MHP

 Kate Lewis
 Deutsche Numis (Nomad and Broker)
 Stuart Skinner, Kevin Cruickshank                020 7260 1000
 MHP (Media enquiries)
 Katie Hunt, Eleni Menikou, Rob Collett-Creedy    020 3128 8100

+44 (0)7884 494112

knights@mhpgroup.com

 

 

Notes to Editors

Knights is a fast-growing legal and professional services business, ranked
within the UK's top 50 largest law firms by revenue. Knights was one of the
first law firms in the UK to move from the traditional partnership model to a
corporate structure in 2012 and has since grown rapidly. Knights has
specialists in all key areas of Corporate and Commercial law and Private
Wealth services. It is focussed on key UK markets outside London and currently
operates from 26 offices located in Birmingham, Brighton, Bristol, Carlisle,
Cheltenham, Chester, Exeter, Kidderminster, Kings Hill, Leeds, Leicester,
Lincoln, Manchester, Newbury, Newcastle, Nottingham, Oxford, Portsmouth,
Sheffield, Solihull, Stoke, Teesside, Weybridge, Wilmslow, Worcester and
York.

 

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