Law firm reports strong trading for current financial year
DWF, the Manchester-based law firm, reported strong trading in the first two months of the financial year with revenues and EBITDA ahead of budget and the previous year.
In the past two months the group has seen the unexpected departure of its chief executive, Andrew Leaitherland, and the closure of two international offices, with 60 redundancies, as it responds to the challenges of the coronavirus pandemic.
It said organic revenue grew by around six per cent year-on-year and total revenue grew by approximately 21%, reflecting the contribution from the acquisitions of RCD in Spain and Mindcrest.
And it said it expects to make total cost savings of £15m in fiscal year 2021 from the swift management action which has been taken.
The cash balance, as at June 30, 2020, was £17.9m, with total gross available facilities of £122m.
Today’s statement said that, after encountering some headwinds from COVID-19 in the fourth quarter of fiscal year 2020, the group is cautiously optimistic about the 2021 performance, albeit, it is too early to make any firm predictions given the pandemic is ongoing and the economic impact remains unpredictable.
DWF said that, while the current uncertain macro-economic conditions limit forward visibility, management and the board are pleased with the progress the group has made during the first two months of the new financial year.
The impact of the cost saving measures and discontinued loss making operations should, it says, further underpin near term profitability.
The discontinued operations represented approximately 1.5% of group revenues and generated a £4.5m EBITDA loss in fiscal year 2020.
Management say they are cautiously optimistic that 2021 will benefit from a number of positive drivers, despite the potentially challenging economic conditions.
Group chief executive, Sir Nigel Knowles, said: “Despite the headwinds facing the global economy, I am pleased with the positive momentum that DWF has generated during the first two months of the year, with revenue and EBITDA ahead of prior year, and activity levels increasing.
“We have taken decisive action focused on consolidating our existing operations to increase profitability, deliver cost efficiencies and improve lock-up and cash generation.
“Measures to scale-up managed services and optimise the international division will position DWF well for FY21 and beyond.
“Having had the opportunity to talk personally with many stakeholders, including both internal and external shareholders, I am very pleased that our new direction has such strong support.”