8th Sep 2020 14:05
(Alliance News) - Law firm DWF Group PLC on Tuesday said organic growth and the contribution from acquisitions resulted in a strong business recovery in the first-quarter of financial 2021.
For the three months to July 31, the Manchester-based company posted a 20% rise in revenue to GBP84.3 million from GBP70.1 million a year ago.
The solid growth was attributed to contribution from the acquisitions of RCD in Spain and Mindcrest. Organic revenue growth was 5% year-on-year.
DWF bought legal and managed services firm Mindcrest Inc for up to USD18.5 million, completing the purchase in March. It agreed to buy RCD in December.
DWF also reported a significant uplift in underlying earnings before interest, tax, depreciation and amortisation to GBP9.7 million from GBP4.0 million, as previously announced cost savings of GBP15 million in financial 2021 kicked in.
On a reported basis, however, the company slumped to a pretax loss of GBP600,000 versus GBP1.9 million profit posted a year ago.
DWF said it disposed, closed or reduced scale of operations in Cologne, Dubai, Singapore and Brussels and is taking further actions to rationalise underperforming units.
The company's net debt position at end of the quarter stood at GBP55.2 million, a GBP9.7 million reduction on the April 20 position and reflecting free cash flow generation of GBP18.5 million in the three month period.
DWF said it has a strong pipeline of opportunities including Managed Services bid activity, which supports optimism for its financial 2021 results.
Separately, DWF said that the "sudden and far reaching impact of Covid-19" had a material effect on the final quarter of financial 2020, which impacted overall profitability.
For the year to April 30, DWF posted underlying adjusted Ebitda of GBP21.8 million, down 22% from GBP27.8 million a year ago. Reported pretax profit, however, jumped 40% to GBP18.2 million, largely on acquisitions.
Net revenue increased 11% to GBP297.2 million for financial 2020, mainly due to organic growth.
DWF said it has promoted Matthew Doughty as group chief operating officer. Doughty, as a result, will step down as partner director of the company.
The company also appointed Michele Cicchetti and Seema Bains as partner directors. The position of partner director is designated by the company as a non-independent, non-executive director position.
DWF has proposed a final dividend per share of 0.75 pence, taking the total payout for financial 2020 to 3.25p.
Shares in DWF were up 3.0% at 61.30p each in London on Tuesday afternoon. The stock has shed half its value since the start of 2020.
By Tapan Panchal; tapanpanchal@alliancenews.com
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