Knights reports first-half revenue growth as acquisition strategy poised to continue
Firm said recent £60m credit line will help it to ‘selectively execute’ on M&A pipeline
AIM-listed UK legal and professional services firm Knights said revenue grew by more than a quarter in the first six months of the financial year, according to a trading update ahead of its half-year results in January.
Revenue hit £59.7m in the six months to the end of October, 29% higher than in the first half of the 2020/21 financial year. It also reported adjusted profit-before-tax of £7.6m – 26% higher than in the same period a year ago. Meanwhile, its underlying profit-before-tax margin remained steady at 13%.
Net debt, excluding lease liabilities, edged higher to £23.1m from £21.1m in the first half of last year. That comes after the firm successfully integrated the acquisitions of Keebles and Mundays, expanding its regional footprints in Yorkshire and the South East. Earlier this month, Knights also acquired Teeside-focused firm Archers, adding 38 fee earners to its roster and marking its 17th location across the UK. Knights’ share price has risen 5.71% this year.
Knights’ CEO David Beech said the trading update underscored the firm’s financial management discipline, adding that it is “well placed to continue to selectively execute acquisition opportunities to further strengthen our position in key legal services markets outside London”.
That acquisition pipeline will be supported by the recent announcement of a £60m revolving credit facility that will allow it to pursue its ambitions to be the largest legal and professional services business outside of London. The credit line is being provided by HSBC, Allied Irish Bank and Lloyds Bank, replacing a previous £40m facility with HSBC and AIB.
The firm noted that it continues to attract talent from top 50 firms, maintaining the hiring activity seen in the first six months of the 2020/21 financial year, without giving specific numbers.
Earlier this month, the firm launched a debt advisory business amid increased demand for debt advice services as the UK government winds down various lending schemes put in place at the start of the coronavirus pandemic. The firm hired 30-year banking veteran Tony Dean from Santander to support the debt advisory team, adding to corporate banking lawyer Jonathan Edwards who joined from Browne Jacobson in May.