Knights today announces its half year results for the six months ended 31 October 2024.

The results show continued profitable growth and enhancement of margin - with the key numbers showing that revenue has increased by 5.4% to £79.4m and underlying profit before tax is up 25.9% to £14.6m.

Financial highlights

  • Strong growth in underlying PBT of 25.9% to £14.6m (H1 FY24: £11.6m); Underlying PBT margin up 3.0% pts to 18.4% (H1 FY24: 15.4%)
  • Revenue up 5.4% to £79.4m (H1 FY24: £75.3m)
  • Reported profit before tax increased by 30.4% to £9.0m (H1 FY24: £6.9m)
  • Basic underlying EPS up 27.2% to 12.71p (H1 FY24: 9.99p);  Basic reported EPS up 33.7% to 7.14p (H1 FY24: 5.34p)
  • Debtor days of 33 (H1 FY24: 31); lock up of 98 days (H1 FY24: 93 days)
  • Good cash conversion of 63% (H1 FY24: 69%)
  • Net debt at £50.1m (1.4x bank leverage), (H1 FY24: £38.3m (1.3x bank leverage), FY24: £35.2m (1.1x bank leverage) after a cash outlay of c.£8.9m relating to initial and deferred consideration in respect of acquisitions
  • Interim dividend 1.76p per share (H1 FY24: 1.61p per share)

Strategic and operational highlights

Focus on driving higher quality revenues, underpinned by strong national reputation

  • 23 senior fee earners hired in the period (H1 FY24: 20)
  • Growth in higher margin business areas of CL Medilaw, real estate and New Homes, while strategically reducing lower margin areas such as insolvency
  • Streamlined and centralised internal business functions resulting in an improved fee earner to non-fee earner ratio of 3.7:1 (H1 FY24: 3.6:1)
  • Maintained cost discipline and operational excellence; continued investment in the technology platform
  • Experienced team of Client and Business Services Directors, with average tenure of over five years

Expanded footprint and delivering organic growth from prior year acquisitions

  • Strengthened presence in West Midlands, adding offices in Worcester, Kidderminster, Solihull and Birmingham through the acquisition of Thursfields Legal Limited, which has integrated well and is performing in line with expectations
  • Total revenue from recent acquisitions of Baines Wilson, St. James’ Law and Meade King is ahead of expectations and delivering good organic growth opportunities

Current trading and outlook

  • Trading in H2 FY25 has begun in line with our full year expectations
  • Breadth and scale of offering securing significant recent client wins
  • Growing reputation driving strong recruitment and acquisition pipeline
  • Confident of further organic growth in the second half

David Beech, CEO of Knights, said:

“Knights has delivered a strong performance in the first half, with a significant increase in profitability, supported by strong recruitment, significant client wins, contributions from prior year acquisitions and excellent cost discipline.

“The second half of the year has started in line with our expectations, with important recent client wins, and continued recruitment momentum, underpinning our confidence in delivering further organic growth in the second half.

“Knights’ growing reputation as a quality UK legal services provider with national scale continues to support our recruitment and acquisition pipeline and we have a good pipeline of further hires for the second  half.

“This positive momentum, together with our continued focus on operational excellence positions us well for delivering full year profits in line with our expectations.”