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Keystone Law shares surge as profit grows on "strong client demand"

14th Sep 2023 11:42

(Alliance News) - Keystone Law Group PLC on Thursday increased its dividend payouts and said full-year results should exceed expectations, following an "excellent" debt-free first half marked by rising earnings.

Shares in the London-based law firm were up 17% at 480.00 pence in London on Thursday.

Keystone said its pretax profit increased 29% during the half year ended July 31 to GBP5.3 million, from GBP4.1 million the year before. Its adjusted pretax profit, which added back amortisation and share-based payments, increased 25% to GBP5.7 million from GBP4.5 million.

Revenue increased 15% to GBP42.3 million from GBP36.8 million, and earnings per share rose 23% to 13.6p from 11.1p. Keystone added that it "remains debt-free" with a GBP11.3 million cash balance at July 31, up from GBP7.5 million one year prior.

Keystone declared a 5.8p per share interim dividend, up from 5.2p the previous year. It also declared a 12.5p per share special dividend.

Cost of sales increased 15% to GBP31.2 million, and administrative expenses also increased 15% to GBP5.6 million.

Keystone said recruitment market conditions "evolved positively" during the period, and that it had continued to "attract high-calibre talent" since July 31. However, it cautioned that "economic uncertainty continues to weigh on candidate flow."

Conversely, Keystone said activity levels and client demand have remained strong throughout the current half year. It expressed confidence that it will continue trading well throughout the year ending January 31 2024, and said results should be "comfortably ahead" of current market expectations.

"I have been delighted with the performance of the business during the first half of this year," said Chief Executive Officer James Knight. "As anticipated, recruitment market conditions have moved in our favour and Keystone's model continues to prove highly attractive to the high-calibre lawyers we pride ourselves on being able to attract and retain.

"I look forward to the rest of the year, confident that Keystone's core business fundamentals will continue to deliver strong results."

By Emma Curzon, Alliance News reporter

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