LONDON (ShareCast) - (Sharecast News) - Knights Group said in an update on Friday that it delivered a strong first-half performance, returning to organic growth as revenue and profits rose on the back of recent acquisitions and continued operational discipline.
In a trading update for the six months ended 31 October, the legal and professional services firm said revenue from continuing operations was expected to increase 30% to £103.2m, compared with £79.4m a year earlier.

Organic growth of around 3% marked a resumption of underlying expansion after a period of integration and cost control.

Underlying profit before tax from continuing operations is expected to rise 12% to £16.4m.

The group's underlying profit before tax margin of 16%, down from 18%, was in line with internal forecasts due to higher payroll taxes and ongoing investment in AI and technology. Knights said it continued to demonstrate tight working-capital management, reducing debtor days to 32 from 33, and reported strong cash conversion.

Net debt was expected to be £75.2m, up from £64.8m at the end of April, reflecting about £15m of acquisition-related payments and roughly £3.5m of capital expenditure.

The company extended its £100m revolving credit facility with HSBC UK, AIB GB and NatWest by one year to November 2028, on unchanged terms.

Recent acquisitions added substantial teams in the West Midlands, the Thames Valley, the South East and Cardiff, all performing in line with expectations and integrating well.

Knights also continued to attract senior talent, adding 46 senior fee earners in the half or due to start shortly, compared with 43 a year earlier.

Annualised churn remained low, consistent with the decline recorded in the second half of last year following internal engagement initiatives.

Chief executive David Beech said the results reflected the benefits of recent investment and the group's widening footprint.

"The group has delivered a strong first half performance, with 30% revenue growth including a return to organic growth," he said.

"We have continued to scale up the business and have successfully integrated recent acquisitions whilst retaining our strong financial discipline across the business reflected in our strong cash generation."

He added that Knights expected the second half to benefit from recent hires and full-period contributions from acquired teams, "underpinning our confidence in delivering a full year performance in line with market expectations."

Knights said it would publish its half-year results on 12 January.

At 1101 GMT, shares in Knights Group Holdings were flat at 171p.

Reporting by Josh White for Sharecast.com.

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