Knights today provides a trading update for the six months ended 31 October 2024.
The Group has delivered a strong performance in the period with underlying PBT1 expected to increase by 25.9% to c.£14.6m (H1 24: £11.6m), on anticipated revenue growth of 5.4% to c.£79.4m (H1 24: £75.3m). This reflects a 3.0% pts increase in PBT margin to 18.4% (H1 24: 15.4%) and continued strong progression from 12.6% in H1 23. This strong first half performance underscores the Group’s confidence in delivering a full year performance in line with market expectations.
In September 2024, the Group acquired Thursfields Legal Limited, a full legal services business with a national client base, significantly strengthening Knights’ presence in the West Midlands. The business is integrating well, and is performing in line with expectations.
Momentum in recruitment continues, with 23 senior professionals joining Knights in the first half (H1 24: 20) and a good pipeline of further hires for the second half, driven by increased brand awareness and a growing reputation across the UK legal services market.
Balance sheet and Extended Revolving Credit Facility
The Group’s continued strong focus on working capital discipline is reflected in debtor days2 at 31 October 2024 of 33 (H1 24: 31 days). Net debt3 was £50.1m at 31 October 2024, (at 30 April 2024 £35.2m) after paying £8.9m initial and deferred consideration in respect of acquisitions.
The Group has agreed with HSBC UK, AIB (GB) and NatWest to extend its revolving credit facility to provide total committed funding of £100m (an increase from the existing £70m) until November 2027 (extended by a year). The extended facility provides the Group with significant headroom to execute its value-accretive acquisition strategy as suitable opportunities arise.
UK national insurance
The changes announced in the UK Government’s Autumn Budget on 30 October, and primarily the changes to national insurance contributions, are expected to have an annualised cost impact of £2m in FY 26, with just one month of the changes impacting FY 25. The Group is well-positioned in relation to these changes through its ongoing focus on growth, efficiency and pricing.
David Beech, CEO of Knights, said:
"It has been a strong first half and I am particularly pleased with our focus on profitable revenue growth. The continued improvement in margin reflects the increasing quality of our revenue, team and our continued focus on the cost base.
“We are encouraged by our strong momentum in recruitment which continues to build as Knights’ national scale and strong reputation are increasingly recognised. These factors, together with our ongoing focus on operational excellence, and early signs of a recovery in corporate and residential housing work, position us well for a strong performance in the second half in line with market expectations.”
Knights will provide a further update on trading with its half year results announcement on 14 January 2025.