Knights today provides a trading update for the half year ended 31 October 2023.
The Group's first half performance is in line with the Board's expectations. The Group anticipates half year revenue of c.£75.3m, an increase of 6% compared to the prior year (H1 23: £71.2m), with underlying PBT anticipated to be c.£11.5m, an increase of 28% on the prior year (H1 23: £9.0m) with underlying PBT margin increasing from 12.6% to 15.3%.
This performance is supported by a return to low single-digit organic growth in the period, notwithstanding a challenging backdrop in the housing and M&A markets.
The Group's continued discipline on cash collection has delivered debtor days of 31 as at 31 October 2023, in line with the 32 days achieved as at 31 October 2022 and 30 days at 30 April 2023, with total lock-up improving to 93 days compared to 103 days at October 2022.
This focus on cash has resulted in net debt of c.£38.3m at 31 October 2023 (H1 23, £35.6m, FY 23: £29.2m), after c.£7.5m of acquisition consideration, debt and related costs in the first half, providing significant headroom against the Group's recently increased £70m revolving credit facility.
The Group has recruited 20 senior hires in the half year, compared to nine in the same period last year, many of whom have been attracted by Knights' differentiated ownership and business model, which offers no financial risk, compared to traditional equity partnership. Churn for the period was six percent, compared with 11% for the same period last year.
The integration of prior year acquisitions, Coffin Mew (Portsmouth) and Meade King (Bristol), has been successful and both are performing well, despite challenging market conditions for the residential property sector in the period.
During the first half, the Group completed the acquisition of St James Law (Newcastle) and Baines Wilson (Carlisle), further strengthening the Group's presence in the North. Both acquisitions are integrating well and performing in line with the Board's expectations.
David Beech, CEO of Knights, said:
"We continue to execute our strategy successfully, delivering profitable, cash generative growth, while focusing on delivering a premium service.
"Entering the second half, we are encouraged by the Group's strong performance, as we continue to attract high quality, talented professionals, and monitor an attractive and growing pipeline of potential acquisitions for the Group."
Knights will provide a further update on trading with its half year results announcement in mid-January 2024.