DWF hails 'transformational year' as revenue rises 12% to £400m
Listed UK firm reports 8% rise in organic revenue with gross profits up by 21%
DWF, the UK’s largest listed law firm, has reported a 12% increase in revenue to £400.9m against adjusted profit before tax (PBT) of £34m, as it becomes the latest firm to post double-digit growth coming out of the pandemic.
The firm said it achieved group net revenue growth of 14%, of which 8% was organic, to hit £338m. Gross profit was up by 21% to hit £171.8m with its adjusted PBT of £34m representing a 125% increase from the 2019/20 financial year. However, reported PBT amounted to a loss of £30.6m, 'due to significant, largely non-cash, acquisition and closure/scale back related expenses treated as non-underlying items'.
DWF's international revenue grew 33% to hit £92.5m, which it attributed to the £33.5m contribution from its acquisition of Spanish firm RCD. Also highlighted within the firm’s international network were its bases in Italy, Poland and Dubai.
Its specialist business division, Connected Services, achieved 22% organic growth, while its Mindcrest managed services arm contributed £13m of net revenue. DWF acquired Chicago-based Mindcrest in early 2020 for $18.5m in cash and shares, shortly after its tie-up with RCD for €50m. The firm’s largest divisions grew at a comparatively slower rate, with its commercial and insurance arms both growing by just 3%, which it attributed to the adverse impacts of Covid-19.
Sir Nigel Knowles, chief executive officer of DWF, commented: “FY2020/21 was a transformational year for DWF and I am delighted that the tremendous resilience, dedication and excellence of our colleagues has been rewarded with these strong results. The results reflect a return to pre-COVID-19 activity levels, but they also evidence the importance of the decisive actions we took throughout the year as we focused on driving greater operational efficiency, profitability and strategic alignment.”
Knowles stepped across from chairman to take over as CEO following the exit of longtime CEO Andrew Leaitherland in May last year, going on to implemented a series of cost-saving measures including the closure of its offices in Brussels and Singapore and a major scale-back in Australia. The moves were designed to tackle ‘greater than anticipated’ disruptions brought on by the pandemic.
Knowles added that he believed the firm’s new global operating structure – which sees it operate Legal Advisory, Mindcrest and Connected Services divisions – was “an important step forward in our strategy and will help us to fulfil our vision of becoming the leading global provider of integrated legal and business services".
As further evidence of its return to form, the firm jumped back on the M&A train in May by acquiring UK-based compliance training business Zing 365 and Canadian claims and loss adjusting business Barnescraig & Associates for a total of £4m. Looking ahead to the next financial year, it said it expected the bolt-ons to contribute a combined £3m in revenue and £0.5m of adjusted profit before tax in 2022.