Robust financial performance and excellent cash generation
- Revenue of c.£46m representing growth of 44% (H1 20: £32m)
- Underlying adjusted PBT of c.£6m representing growth of 13.2% (H1 20: £5.3m)
- Excellent cash conversion
- Net debt as at 31 October 2020 £14.4m (FY 20: £15.9m)
- Gross margins were maintained at c.45%, despite a 15% impact on revenue from COVID, related disruption to our clients
- Trading has continued to recover through September and October, reaching near pre-COVID levels; full salaries resumed for employees from 1 November
- Acquisition of OTB Eveling LLP announced separately today
Knights, the fastest growing legal services business over the last four years, today provides a trading update for the half year ended 31 October 2020.
The Company has continued to enjoy steadily improving levels of activity since the COVID impact in April and is pleased to report that October saw activity, including new business instructions, recover to near pre COVID levels. There has been no meaningful impact from either the regional restrictions in October or the national lockdown in November. The robust first half year performance and current trading levels give the Board confidence that the Group is trading in line with market expectations for the full financial year.
Given the Group’s robust performance, the Board was able to remove all previously announced salary cost-reductions from 1 November. In the first half, Knights integrated the three acquisitions completed in April ahead of plan, all of which have contributed in H1 21 as expected.
The Group recruited 28 new senior fee earners during the first half, compared to 7 new senior fee earners in the same period last year, in line with the Group’s focus on hiring senior, high calibre people typically with strong client relationships, to support ongoing organic growth for the Group.
The Group’s continued focus on lock up days has delivered excellent cash conversion. Net debt at 31 October 2020 is £14.4m (FY 20: £15.9m).
The Company will next provide an update on trading when it announces its half year results on 19 January 2021.
David Beech, CEO, commented:
"We have seen a strong recovery in activity levels since the sudden impact of COVID at the end of our last financial year. Our business is both well positioned and resilient, which gives us confidence in our ability to navigate the current economic turbulence.
“Building on our recent successful integration of three acquisitions and recruitment of high calibre partners from other top 50 law firms, we look forward to continuing our growth, both organically and through selected acquisitions.”
Knights is holding a virtual Investor Event at 14:00 today via webcast. No new material information will be disclosed during the event. If you are interested in attending, please register by emailing Knights@mhpc.com or by calling 020 3128 8168.