Knights, one of the UK’s fastest growing regional legal and professional services businesses, is pleased to announce its maiden half year results for the six months ended 31 October 2018.

Financial highlights

  • 36.6% increase in revenue to £23.9m (H1 2018: £17.5m)
    • 10.3% increase in revenue from organic growth
  • Adjusted EBITDA(1) grew by 49.7% to £5.3m (H1 2018: £3.5m)
    • Adjusted EBITDA(1)margin increased to 22.0% (H1 2018: 20.1%)
    • 20.1% increase in Adjusted EBITDA(1)from organic growth
  • Adjusted PBT(1)up by 103.6% to £4.4m (H1 2018: £2.2m)
  • Adjusted EPS(1) increased by 63.1% to 5.48p (H1 2018: 3.36p)
  • Cash conversion(2) increased to 116% (H1 2018: 18%)
  • Net debt of £9.5m as at 31 October 2018, £2m ahead of plan (31 October 2017: £28.2m)
  • Maiden interim dividend of 0.6p per share

Operational highlights

  • Successful AIM admission in June 2018 with £28.1m net proceeds raised in an over-subscribed placing
  • Further developed the Group organically:
    • Increased average fees per fee earner by 24.5% to £66k (H1 2018: £53k) reflecting our focus on enhanced efficiency and productivity
    • A net 35 recruits having joined or agreed to join the Group’s existing offices
    • Secured a modern and larger office to support expansion in Manchester
  • Acquired, integrated and derived planned synergy savings from the acquisitions of:
    • One of the top corporate law firms by deal volume across the North-West, Turner Parkinson, in June 2018
    • Leicester's largest independent law firm, Spearing Waite, in October 2018
  • Expansion of the Board with Richard King, currently Non-Executive, becoming Chief Operating Officer and the appointment of Jane Pateman as Non-Executive Director announced today

Current trading and outlook

  • Confidence in meeting expectations for the full year underpinned by:
    • A continued strong trading performance into the start of the second half
    • Recent recruitment and the integration of recent acquisitions
  • Acquisition of employment specialist, Leicester-based, Cummins Solicitors announced today

David Beech, CEO of Knights, commented: “We have delivered a strong financial performance of highly cash generative and profitable growth during the half year and made good progress with our ambitious strategy to develop the business organically and consolidate the legal and professional services sector outside London.

“The strong trading performance of the first half year has continued into the start of the second half year and this, together with the new recruits and the full integration of Turner Parkinson and Spearing Waite, supports the Board’s confidence that the Group will meet expectations for the full year.”

(1)  The adjusted figures are before amortisation; non-underlying costs relating to acquisitions, the implementation of associated cost savings and the Group’s IPO; and share-based payment charges.  The Board believes that these adjusted figures provide a more meaningful measure of the Group’s underlying performance. A full reconciliation between our adjusted and statutory profits is provided in note 11.

(2)  Cash conversion is calculated by dividing free cash flow by adjusted profit after tax, which is calculated from profit after tax by adding back amortisation, non-underlying costs, share-based payment charges and the tax in respect of these costs.

Download the full press statement here.