Law firm reports record annual revenues and continued strong trading
Law firm DWF reported strong annual figures, as well as robust first quarter trading, today.
The Manchester-based practice achieved revenues for the year to April 30, of £356.612m, up from £317.221m. Pre-tax profits improved from £13.034m last year, to £18.198m for 2020, largely due to adjustments relating to acquisitions.
The firm reported a closing net debt of £64.9m, compared with £35.3m the previous year, reflecting the COVID-19 impact and lockup days which peaked at 206 in April, but have since reduced.
It has proposed a final dividend per share of 0.75p, taking the total proposed dividend for 2020 to 3.25p.
DWF also revealed strong trading for the first three months of fiscal year 2021, with high double digit revenue growth driven by mid-single digit organic growth and a contribution from the acquisitions from RCD and Mindcrest.
In the quarter to July 31, net revenues stood at £84.3m, up from £70.1m last year, although reported pre-tax profits of £1.9m at the same stage last year compared with a £600,000 loss before tax this time.
The previously announced cost savings of £15m in 2021 are taking effect and are reflected in a significant uplift in EBITDA versus the prior year, with cost to income ratio trending lower than the prior year.
DWF disposed, closed or reduced its scale of operations in Cologne, Dubai, Singapore and Brussels, with further measures taken post year-end to rationalise underperforming units.
Chief executive, Sir Nigel Knowles, said: “Trading through the majority of FY20 was strong and the group made significant investments to support its growth objectives.
“The sudden and far reaching impact of COVID-19 had a material effect on the final quarter with a resulting impact on profitability.
“Despite this, we delivered a solid performance with overall revenue growth of 10.9% and organic growth of 2.0%.
“While we achieved record group revenue, with an organic growth rate that compares to other global law firms in FY20, it was lower than expected.
“The strength and resilience of the group and our differentiated model has been evident in the first three months of FY21.
“We have seen strong activity levels generating positive momentum across the business resulting in revenue and EBITDA being materially ahead of the prior year.”
He added: “We have also taken decisive action focused on consolidating our existing operations to increase profitability, delivering cost efficiencies and improving 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 spoken with many of our stakeholders, I am very pleased that our new focus has such strong support and remain positive about DWF’s future prospects.”
Further to the appointment of Jonathan Bloomer as non executive chairman and Chris Sullivan taking on the new role of deputy chairman with effect from August 1, 2020, the board announced the following appointments today, with effect from October 22. Matthew Doughty will become group chief operating officer of DWF Group plc, stepping down as partner director at the same time, while Michele Cicchetti and Seema Bains become partner directors of DWF Group plc.
