DWF forecasts double-digit revenue rise

Leaitherland: Delivering on our IPO promises

Listed law firm DWF will report revenue growth of “not less than 10%” for the last six months, it told investors today, sending its share price to a new high.

In an interim trading statement, it said the “vast majority” of this was driven by organic growth, with international activities up 29% in the half year to 31 October, while its connected services division – providing a range of services related to core legal advice – grew 18%.

DWF’s other two divisions – insurance and commercial services – delivered combined organic growth of around 5%, in line with guidance, with most of it coming from insurance and litigation.

DWF listed at 122p in March and has not moved much since, reaching a low of 115.5p in August. In early trading this morning, the announcement sent the shares – which closed on Friday on 125.5p – to 132p.

The firm’s maiden annual results as a listed company showed its revenue for the year to 30 April 2019 grew 15% to £272m, which it also said was “primarily organic… given the pause on our M&A programme required by the IPO process”.

DWF’s net debt of £49.5m was up on April 2019 but down £9.5m on the same period last year; the firm said the April 2019 figure “primarily reflects the normal cyclicality of partner tax payments in addition to the £3m dividend payment in September”. It said lock-up days continue to fall.

The firm announced a 1.25p dividend per share on 13 November.

Looking ahead to the second half of the financial year, the announcement said mergers and acquisitions remained part of the group strategy, “with a pipeline of carefully chosen targets being assessed for feasibility”.

Chief executive Andrew Leaitherland said: “The first half of the year has seen a number of important milestones achieved as we continue to deliver on our IPO promises, developing the business in our first year as a listed entity.

“We have launched in Poland, made significant investment in partner hires globally, expanded our German operation with a presence in Dusseldorf, and seen a robust UK performance, particularly in insurance and litigation, despite the political uncertainty. The group also won a significant contract with BT, demonstrating the progress of our managed services platform.”

As we revealed earlier this month, this deal has included BT transferring its alternative business structure, BT Law, to DWF.

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