LONDON (ShareCast) - (Sharecast News) - Legal services company Knights Group reported a 45% improvement in first-half revenue on Tuesday, to £46.2m, with the benefit of the contribution of £19.1m from acquisitions.
The AIM-traded firm said its gross margins were maintained at 46%, despite a 15% impact on revenue from the Covid-19 pandemic.

Its underlying profit before tax rose by 13% to £6m for the six months ended 31 October, while its underlying earnings per share slipped to 5.93p from 5.95p a year earlier.

Reported losses per share came in at 1.8p, swinging from earnings of 2.88p in the first half of the 2020 financial year.

Knights said its underlying cash conversion was 103% for the period, rising from 77%, which the board said reflected "strong management" of lock-up and the successful integration of the three late 2020 financial year acquisitions.

It said the period-end lock-up was 94 days, excluding the impact of acquisitions, which it put down to its "strong focus" on cash collection, supported by "robust" systems.

Net debt stood at £14.4m as at 31 October, down from £15.9m at the start of the period, representing a "conservative" gearing of 0.6x consensus 2021 EBITDA, and providing significant headroom under its £40m revolving credit facility.

"We have delivered a robust first half performance of profitable, cash generative growth across an enlarged Group, despite the macro economic environment," said chief executive officer David Beech.

"The health and wellbeing of our people continues to be the group's priority and this performance is credit to our teams' continued provision of excellent service to our clients, remotely.

"Activity levels have improved further since period end, providing confidence that we will return to double-digit organic growth for the second half."

Beech said the company was continuing to execute on its strategy of driving organic growth, supplemented by targeted acquisitions that built scale and provided entry into "attractive" regional markets.

"Our well-invested business and strong culture is attracting senior fee earners, many of whom are joining from top 50 law firms.

"Our prior investments have enabled us to successfully onboard new colleagues, win exciting new clients and rapidly integrate four acquisitions during a period of working remotely.

"Having broadened Knights' geographic reach, our competitive position as a market leader in the regions has continued to strengthen through the period, and we anticipate that Covid-19 will accentuate the recruitment and acquisition opportunities for our resilient business in the highly fragmented market for legal services outside London."

At 1015 GMT, shares in Knights Group Holdings were up 1.4% at 363p.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE