Final Results FY25

8 July 2025

DSW CAPITAL PLC

("DSW Capital", "DSW" or the "Group")

(AIM: DSW)

AUDITED FINAL RESULTS

Transformational acquisition and supernormal levels of M&A activity deliver record results

DSW Capital, a profitable, mid-market, challenger professional services licence network and owner of the Dow Schofield Watts and the DR Solicitors brands, is pleased to announce its Final Results for the year ended 31 March 2025 ("FY25" or the "Period").

FY25 was a year of transformation and building momentum for DSW Capital, marked by strong financial performance, strategic progress, and the successful integration of DR Solicitors. The Group has entered FY26 a more robust and diverse business and, while mindful of macro-economic uncertainties, the Board views the prospects for year ahead and beyond with confidence.

Financial highlights

Operational highlights

Current trading and outlook

Shru Morris, Chief Executive Officer, said:

"Trading in the early months of the new financial year has been encouraging, despite ongoing macroeconomic uncertainty. Over the past two years, the Group has navigated a series of challenges with resilience and adaptability. As a result, we enter FY26 as a more robust business, one that is equipped to deliver a broader and more integrated range of services to our clients than ever before.

"The transformation of DSW Capital, achieved in FY25, reinforces my great confidence in the Group's ability to capitalise on an evolving landscape in professional services. Our scalable platform has the capacity to support significant further growth, with financial headroom to welcome additional licensees, and invest in our existing businesses to grow their teams. We are also encouraged by a healthy and active pipeline of opportunities.

"Looking ahead, we expect organic growth to continue to strengthen in FY26, underpinned by sustained recruitment momentum and a more focused approach to expanding our presence in the mid-market. We remain committed to delivering on our ambitious medium-term growth plan, building on the progress we've made, the momentum we're seeing across the Group, and the favourable market dynamics. With a combination of strong organic performance and a robust recruitment pipeline, we are confident in both the year ahead and our ability to scale the business and deliver long-term value."

Online investor presentation

An online investor presentation and Q&A will be hosted by the management team on 10 July at 4.00pm. To participate, please register with SparkLive at: DSW FY25 Results Presentation.

Dividend and Record Pay Date

The record date for the Group's proposed final dividend of 2.0 pence per share is 12 September 2025 and the dividend payment date is 3 October 2025. The ex-dividend date is 11 September 2025. The Group's ISIN and TIDM are GB00BNG9H550 and DSW, respectively.

Notice of AGM

The Group's annual general meeting ("AGM") will be held on 16 September 2025 at 09:00am at The Park Royal Hotel, Warrington, WA4 4NS. Notice of the AGM will be posted with copies of the Group's report and accounts on 12 August 2025. Copies will also be available at this date on the Group's website: Investors - Dow Schofield Watts (dswcapital.com).

Enquiries:

About DSW Capital

DSW Capital, owner of the Dow Schofield Watts and DR Solicitors brands, is a profitable, mid-market, challenger professional services network with a cash generative business model and scalable platform for growth. Originally established in 2002, by three KPMG alumni, Dow Schofield Watts is one of the first platform models disrupting the traditional model of accounting professional services firms. DSW Capital operates licensing arrangements with its businesses and has over 130 fee earners across 12 offices in the UK. These businesses trade primarily under the Dow Schofield Watts and DR Solicitors brands.

DSW Capital's vision is for our brands to become the most sought-after destinations for ambitious, entrepreneurial professionals to start and develop their own businesses. Through a licensing model, DSW Capital gives professionals the autonomy and flexibility to fulfil their potential.

Being part of the DSW Capital group brings support benefits in recruitment, funding and infrastructure. DSW Capital's challenger model attracts experienced, senior professionals, who want to launch their own businesses and recognise the value of DSW Capital's brands and the synergies which come from being part of the network.

DSW Capital aims to scale its agile model through organic growth, geographical expansion, additional service lines and acquisitions. The Directors are targeting high margin, complementary, niche service lines with a strong synergistic fit with the existing network.

CHAIR'S STATEMENT

I am pleased to present DSW Capital's results for the year ended 31 March 2025. On behalf of the Board, I would like to begin by expressing my sincere thanks to all colleagues across the business for their unwavering commitment and support throughout the year, a year marked by significant strategic progress and strong financial performance. In particular, I would like to thank James Dow, who stepped down as CEO at the year-end - his tenure culminating in the delivery of this record performance for the Group.

Following the transformative, earnings-enhancing acquisition of DR Solicitors and exceptional levels of 'Beat the Budget' M&A activity, Network Revenue increased by 61.8% to a record £25.8m (FY24: £16.0m), exceeding expectations set at the beginning of the financial year by 30%.

It was great to see the considerable efforts of our colleagues recognised in Experian's list of the Most Active UK Corporate Finance Advisers by Number of Deals 2024. The DSW Network rose four places to 15th in the rankings (2023: 19th), our highest achievement to date.

Central investments in marketing, technology, and infrastructure continue to strengthen our platform and support long-term, sustainable growth. With a strong balance sheet and robust capital base, DSW Capital remains well-positioned to grow both organically and through the strategic acquisition of talented individuals and teams as opportunities arise.

Long-term vision and strategy

At DSW Capital, our long-term vision is clear: to empower pioneers to build and grow their own businesses, and to become the leading business advisory group run by entrepreneurs, for entrepreneurs. This vision underpins every strategic decision we make and is the foundation of our refreshed strategy, which was introduced in April 2025 to reflect the evolving needs of our network and the opportunities ahead.

Our mission is to create a resilient, diversified group of high-performing licensee businesses, supported by a scalable platform and a strong, entrepreneurial culture. The acquisition of DR Solicitors was a pivotal step in this journey, providing a robust legal platform from which we can expand our service offering, attract new talent, and deepen client relationships.

Looking ahead, we will continue to invest in our people, technology, and infrastructure to support the long-term success of our licensees. We are focused on expanding into adjacent advisory sectors, accelerating recruitment across both our core and emerging service lines.

With a strong balance sheet, a clear strategic roadmap, and a growing network of ambitious professionals, we are confident in our ability to deliver long-term value for shareholders, clients, and colleagues alike.

New Additions to the Network

A major milestone in FY25 was the acquisition of DR Solicitors, a transformative addition to the DSW Network and a key enabler of our long-term strategic ambitions. The business added a highly respected legal platform into the Group, significantly enhancing our service offering and positioning DSW as a compelling destination for entrepreneurial legal professionals.

The acquisition marked a step-change in our diversification strategy, allowing us to expand into the legal sector with a proven, high-quality team that shares our values and growth mindset. DR Solicitors provides a scalable foundation from which we can grow our legal capabilities and attract professionals seeking an alternative to traditional law firm models.

This exciting and transformative acquisition unlocks a plethora of opportunity for the Group and we are focused on building on this momentum to further diversify and strengthen the DSW Network.

People and Diversity

Our colleagues remain central to everything we do and achieve. Creating a positive, dynamic culture that is attractive to talent and enables our people to thrive continues to be the top priority for the Board. We are proud of the entrepreneurial spirit that defines the DSW Network and are committed to fostering an environment in which individuals feel empowered, supported, and valued.

Diversity is at the core of DSW's model and a cornerstone of our ESG strategy. We firmly believe that a broad range of perspectives enhances innovation, decision-making, and long-term success. Our commitment to diversity extends beyond gender to include ethnicity, sexual orientation, gender identity, social mobility, disability, and other factors that may lead to disadvantage in other environments.

As our Network grows, we will continue to ensure that DSW is a place in which all professionals, regardless of background, can succeed. This commitment to inclusion is embedded in our culture and will continue to guide how we welcome new individuals and businesses into the Group.

Technology

Technology continues to play a vital role in enabling the DSW model and supporting the success of our licensees. We are committed to investing in the right technologies to protect our licensees and their clients, while keeping pace with the rapidly evolving IT landscape. These investments are designed to embed efficiencies, enhance service quality, protect our licensees, and deliver greater value across the Network.

With this ongoing investment, our licensees are empowered to fully embrace the flexibility and autonomy that define the DSW model, choosing how and where their teams work to maintain a strong work-life balance and foster greater collaboration.

During the year, we continued to invest in an additional senior IT resource to help implement our IT strategy and provide expert, industry-leading advice to the Board. Our key focus areas include continued investment in cybersecurity, maintaining excellent IT service levels, and building a platform that enables us to embrace and lead on technology implementation. In May 2025, the Board undertook external cybersecurity training, reinforcing our commitment to governance and risk management in this critical area.

As we look ahead, technology will remain a cornerstone of our strategy, enabling growth, safeguarding our operations, and ensuring we can continue to deliver a premium experience for our licensees and their clients.

Board and Governance

Our people lie at the heart of DSW Capital's success, and this year we undertook key leadership transitions to support the Group's long-term strategic goals and continued growth.

On 25 November 2024, Pete Fendall, previously Group COO and Interim CFO, was formally appointed as Chief Finance and Operating Officer. This reflects Pete's expanded responsibilities and his contribution to the Group's operational and financial leadership.

On 1 April 2025, Shru Morris succeeded James Dow as Chief Executive Officer. Shru played an integral role, working alongside Pete Fendall, in securing the acquisition of DR Solicitors in the year, and I look forward to the further development of the Group under their leadership.

James, who co-founded of the business and was the driving force behind the IPO of DSW in 2021, continues to play a vital role in the Group's development. He is actively involved in attracting new businesses and Partners to the Network, while also providing ongoing strategic counsel to the Group's management team. On behalf of the Board, I thank James for his exceptional leadership, dedication, and hard work in building DSW into the business it is today.

The Board consists of five directors, three of whom are executive directors and two non-executive directors. Both non-executive directors, Jillian Jones and I, are considered independent. The current Board reflects a blend of different experience and backgrounds and is considered appropriate for the scale of the business.

The Board is supported by two committees, namely the Audit and Risk Committee and the Remuneration and Nominations Committee, with formally delegated duties and responsibilities.

I am happy to report that DSW has complied with the updated QCA Corporate Governance Code 2023 throughout FY25, and you can find more information on our governance arrangements in the Corporate Governance Statement on pages 41-44 of the Annual Report.

Our approach to Risk

At DSW, we take a proactive and structured approach to risk management, beginning at the highest level with the Board. Alongside my fellow directors, I continue to closely monitor and assess the risks facing the Group, ensuring that robust mitigation strategies are in place to protect the business and support sustainable growth.

Supporting the DSW Network in managing risk has remained a key priority throughout the year. We have delivered targeted interventions such as Compliance Inductions and Risk Management Workshops for newly established licensee businesses, which have been positively received. Notably, following the acquisition of DR Solicitors, we held a dedicated Risk Management Workshop to ensure alignment with DSW's risk framework and to establish a register of principal risks relevant to their operations.

We continue to invest in our compliance infrastructure, providing relevant guidance and training to promote a proactive, informed approach to risk management across the Network. This commitment ensures that our licensees are well-equipped to navigate an increasingly complex regulatory environment while maintaining the highest standards of professionalism and integrity.

For more detail, please refer to Risk Management section on pages 35-38 of the Annual Report.

Environmental, Social and Governance ("ESG")

As a Board, we understand and welcome the increasing importance of ESG to our investors, employees, and clients. We are committed to creating positive, long-term interactions with all stakeholders and view ESG as a fundamental part of how we operate and grow the business.

The Group's ESG cornerstones and priority areas remain high on the Board's agenda. We are pleased to publish our ESG Report within this year's Annual Report. It provides a comprehensive review of our progress to date and the meaningful actions we are taking in areas in which we can have the greatest impact. You can read more about our initiatives and performance in the Environmental, Social and Governance Report on pages 30-34 of the Annual Report.

We also continue to make voluntary Streamlined Energy and Carbon Reporting (SECR) disclosures, recognising the vital role all businesses must play in reducing carbon emissions and improving energy efficiency. Further details can be found in the Directors' Report on pages 50-54 of the Annual Report.

Our commitment to ESG is not just led by compliance, it is centred on building a responsible, resilient business, which creates long-term value for all stakeholders.

Dividend

Following the strong performance in FY25, the Board is pleased to propose a final ordinary dividend of 2.0 pence per share for the year ended 31 March 2025. This brings the total dividend for the year to 3.0 pence per share, marking a return to a progressive dividend policy.

This decision not only reflects the Group's improved financial performance during the year but also the successful diversification of the business, particularly through the acquisition of DR Solicitors, which significantly reduced the Group's exposure to M&A activity.

An interim dividend of 1.0 pence per share in respect of the six months to 30 September 2024 was paid on 10 January 2025. If the proposed final dividend is approved by shareholders, it will bring the total cumulative dividends paid to shareholders post-IPO to 12.98 pence per share.

The Board remains committed to delivering long-term value to shareholders and is confident that the reinstated progressive dividend policy reflects the Group's strengthened position and future growth potential.

Outlook

FY25 has been a year of transformation and building momentum for DSW Capital, marked by strong financial performance, strategic progress, and the successful integration of DR Solicitors.

Our refreshed strategy, underpinned by a clear vision and four focused strategic pillars, positions us well to continue building a resilient, diversified, and scalable business advisory group. We remain committed to investing in our people, our platform, and our brand to unlock long-term value for all stakeholders.

While we remain mindful of the broader macroeconomic environment and its potential impact on market activity, the strength of our model, the quality of our licensees, and the agility of our leadership team give us confidence in our ability to navigate challenges and seize new opportunities.

The Board looks forward to FY26 with optimism and remains excited about the long-term prospects for the Group.

Heather Lauder

Independent Non-Executive Chair

CHIEF EXECUTIVE OFFICER'S REVIEW

I am delighted to present this set of results, my first as Chief Executive Officer of DSW Capital. This outstanding performance was achieved under the inimitable leadership of James Dow, who co-founded DSW and led the business for 22 years. I thank him, wholeheartedly, for placing his trust in me to lead the business forward and continue building on his life's work.

FY25 was a transformative year for DSW, defined by an outstanding trading performance and strategic expansion with the successful acquisition of DR Solicitors. The acquisition of a highly scalable legal platform not only strengthens DSW's position in the market through enhanced diversification but also broadens the range of niche professional services available to our network and clients.

Our vision to empower pioneers has never been more relevant, and our results this year reflect the strength of our platform, people, and purpose.

We delivered Network Revenue of £25.8m (FY24: £16.0m) representing record growth of 61.8% year on year, bolstered by the acquisition of DR Solicitors and exceptionally strong levels of M&A activity and completions ahead of the Autumn Budget. Our keen focus on talent acquisition enabled us to end the year with a record 136 Fee Earners, up from 107 in FY24, and 51 Partners (FY24: 50), giving us a great platform for growth in the year ahead.

We delivered a strong performance and growth across our core service lines, underscoring the effectiveness of our strategy to attract high-quality fee earners and deepen client relationships. This momentum reflects tangible returns on the investments we have made in recent years, particularly in enhancing our platform, expanding our service offering, and strengthening our brand presence. These results reinforce our confidence in the scalability of DSW's model and its ability to deliver sustainable, long-term value for shareholders.

The creation of DSW was truly pioneering, an innovative model that was the first of its kind within professional services. James's vision has always been, and continues to be, inspirational. He has worked tirelessly to empower others to build and grow successful businesses.

I would like to take this opportunity to thank our Executive Director and Co-founder, James Dow, for his unwavering support and leadership over the past year, and for guiding the business with vision and dedication for the past 23 years.

Strong trading results

Adjusted EBITDA increased by 186% to £1.79m (FY24: £0.63m), reflective of the high quality, high margin work delivered to clients, as well as the earnings-enhancing acquisition of DR Solicitors.

Revenue more than doubled to £4.9m (FY24: £2.3m) and Adjusted Profit before Tax was almost tripled to £1.4m (FY24: £0.5m). The Group experienced heightened levels of M&A activity in FY25 as a high number of business owners sought to 'beat the budget', resulting in around £3.0m of supernormal Network Revenue in October 2024, which contributed to the Group's strong profitability in the year.

Cash generation from operations was also very strong at £2.0m (FY24: £0.1m), reflecting strong cash conversion, low working capital days and high quality of earnings demonstrating the strength of our model. The Group's balance sheet remains healthy with cash balances of £2.7m at 31 March 2025 (FY24: £2.6m), and net debt of only £0.3m (FY24: £2.6m net cash), following the full drawdown of a new £3.0m Revolving Credit Facility in November 2024 to part fund the DR Solicitors acquisition.

We remain well-resourced to execute our strategy across business advisory services and build on the DR Solicitors legal platform to scale our service offering to attract new talent.

DSW's strategy and delivery against it 

Our vision is for the DSW platform to empower pioneers to grow their own businesses. The transformative acquisition of DR Solicitors demonstrates our strategy, to be a more resilient and diversified group of licensee businesses, in action. The acquisition reduced the Group's dependency on M&A significantly in FY25 to 55% of Total Income (FY24: 68%), with a further reduction to around a third expected in FY26, following a full year's contribution from DR Solicitors.

In FY24, we invested significantly in additional central recruitment capability and expanded our geographic footprint with new corporate finance teams being established in the Midlands and Cardiff. This investment has delivered a positive contribution to the Group in FY25, as the market recovered and has gained pace.

In FY25, our investment focus has been on scaling DR Solicitors, boosting our marketing capabilities to strengthen our brand and building on our legal proposition, to create a flexible platform that enables ambitious and entrepreneurial lawyers to start and grow their own businesses.

Our differentiated model and the creation of a business advisory group is set to create even more opportunities to drive talent acquisition and growth for the future. Our deepened breadth of expertise has created a much stronger platform to attract and deliver for mid-market clients across the UK.

Professional Headcount

Our focus is on the recruitment of new Partners, new teams and the recruitment of additional Fee Earners to grow existing licensee businesses.

At the year-end, the number of Fee Earners, including Partners, had grown to a new record number of 136, an increase of 27.1% (FY24: 10.3%). Since March 2013, the number of Fee Earners has increased from 30 to 136 which equates to a 12-year compound annual growth rate ("CAGR") of over 13%. The Group has added 54 Fee Earners since the Admission to AIM in December 2021. 

Partner recruitment remains a cornerstone of long-term shareholder value. While the recruitment market tightened in FY25, partly due to improved M&A activity in late 2024 as teams were busy delivering for clients, we are now seeing early signs of renewed momentum as activity picks up in the new financial year. The acquisition of DR Solicitors increased our professional headcount by 20 and an additional nine heads joined as a result of organic growth across the Network. We have a good pipeline of future licensees and Fee Earners, as the market for top talent coming away from traditional professional services firms has improved.

Empowering pioneers

We have been empowering pioneers since 2002, creating a platform model to disrupt our industry and give ambitious individuals the freedom and autonomy to thrive. This wealth of experience informs every element of our proposition and is why we have been able to empower individuals through the Dow Schofield Watts brand, and now the DR Solicitors brand, to create both value and lasting legacies.

The traditional advisory and legal models are undergoing the most transformative change we have seen for many years. The interest from Private Equity and consolidation into larger groups is changing the landscape for future Partners, and we are well placed to challenge these structures to attract top entrepreneurial talent. Professionals are increasingly seeking roles that empower them and guide them along a clear path to success, away from traditional corporate structures. Our Partners are empowered to run their own businesses with the freedom to decide how, where, and with whom they work.

Our Partners and their teams are our greatest ambassadors. On behalf of our shareholders, I would like to take this opportunity to thank all of them for their continuing commitment to Dow Schofield Watts and our values.

Strength in our brand

DSW must continue to demonstrate that it is a highly attractive proposition for professionals who work for clients in the UK "mid-market". Strengthening our brand proposition to professionals in the accountancy sector and reaching new audiences within the legal sector is our primary focus for this year. Recruiting Partners and teams of the right quality remains our priority. As at 31 March 2025, 41% of DSW employees and Partners previously worked at a Big 4 firm, and 33% of DR Solicitors previously worked at Magic or Silver Circle law firms.

The quality of DSW's people and their clients is reflected in our average revenue per fee earner of £214k (FY24: £153k), which has seen a huge improvement as we capitalised on favourable market conditions and added high-quality revenues from DR Solicitors.

DSW's achievements and capabilities were further demonstrated in achieving a major milestone, surpassing 500 deals comprising £10bn in value since its inception in 2002. DR Solicitors was also named the 6th fastest growing legal platform firm in the Sub-30 Fee Earner category in 2024*, enabling us to benefit from high quality fee earners who want a credible alternative to working in a larger law firm.

* Source: Codex Edge - Platform Firms Report 2025

Optimising our platform

In FY25, DSW Capital made significant strides in operational excellence, strengthening its position as a leading business advisory platform for entrepreneurial professionals. Our efforts were anchored in the strategic pillar of "Optimising our Platform," which underpins our vision to empower pioneers to build and grow their own businesses.

A key focus was the enhancement of our "plug-in-and-play" platform, designed to streamline onboarding, client delivery and enable seamless collaboration across service lines. We invested in our brand and marketing capability, investing in a new corporate PR agency in the year which has helped to reach new audiences and attract interest from clients and potential recruits.

We also advanced our tech enablement agenda, integrating digital tools to support our deal advisory teams.

In October, we successfully hosted our second full employee conference, an outstanding initiative born from our Future Leaders Programme, to aid collaboration across the network. The Future Leaders Programme, developed in partnership with BecomingX, continues to grow in impact and reach. This year, it welcomed its third cohort, comprising 10 talented Employees and Partners, further strengthening our commitment to leadership development across the firm.

Together, these initiatives and our platform, create a strong foundation for future growth, enabling DSW Capital to deliver on its ambition of becoming the destination of choice for ambitious entrepreneurs.

The DSW Capital team has worked tirelessly to enhance the support we provide to our licensees and to build a market-leading platform that attracts and empowers the next generation of professional talent. I would like to extend my sincere thanks to the entire team for their dedication, hard work, and commitment over the past year.

International network 

DSW has an established partnership network of global advisory firms, called "Pandea Global M&A". Pandea Global M&A comprises selected independent firms with a primary focus on the origination and execution of middle market M&A activities. We believe this network of 37 member firms, with 360 dealmaking professionals in 69 offices across 34 countries, is the 13th largest M&A network in the world.

The Pandea network increases DSW's access to overseas buyers, investors, and valuable local knowledge, while providing its UK-based clients with access to an enlarged pool of acquisition targets. The Pandea network delivered 251 deals in 2024, some of which were engaged across Pandea teams, demonstrating the referral opportunities it provides.

The Pandea conference held in Dubai in May 2025, which DSW attended, attracted over 45 delegates from 23 of the 33 member firms.

Looking ahead 

Trading in the early weeks of the new financial year has been encouraging, despite ongoing macroeconomic uncertainty. Over the past two years, the Group has navigated a series of challenges with resilience and adaptability. As a result, we enter FY26 as a more robust business, one that is equipped to deliver a broader and more integrated range of services to our clients than ever before.

The transformation of DSW Capital, achieved in FY25, reinforces my great confidence in the Group's ability to capitalise on an evolving landscape in professional services. Our scalable platform has the capacity to support significant further growth, with financial headroom to welcome additional licensees, and invest in our existing businesses to grow their teams. We are also encouraged by a healthy and active pipeline of opportunities.

Looking ahead, we expect organic growth to continue to strengthen in FY26, underpinned by sustained recruitment momentum and a more focused approach to expanding our presence in the mid-market. We remain committed to delivering on our ambitious medium-term growth plan, building on the progress we've made, the momentum we're seeing across the Group, and the favourable market dynamics. With a combination of strong organic performance and a robust recruitment pipeline, we are confident in both the year ahead and our ability to scale the business and deliver long-term value.

Shrutisha Morris 

Chief Executive Officer 

CHIEF FINANCE & OPERATING OFFICER'S REVIEW

Key Performance Indicators

The following KPIs are used by management to monitor the financial performance of the Group:

The Group also measures its performance using the following KPIs which are derived from the performance of the DSW Network:

FY25 was a landmark year for the Group, marked by record-breaking growth, strategic diversification and the realisation of prior year investments. Against a backdrop of improving market conditions and a resurgence in M&A activity, we have delivered exceptional financial and operational performance, underpinned by our resilient business model and disciplined execution.

This year's results reflect the benefits of our proactive recruitment strategy and the transformational acquisition of DR Solicitors, which has significantly enhanced our earnings and broadened our sector exposure. Network revenue grew by 61.8%, driven by both organic growth and the contribution from DR Solicitors, while Adjusted EBITDA nearly tripled year-on-year.

We are particularly proud of the momentum in Fee Earner growth, with headcount increasing by 27.1% and revenue per fee earner rising by 39.5%, demonstrating the strength of our platform and the quality of our teams. Our central investments in marketing, technology, and infrastructure continue to support our licensees and position the Group for long-term, sustainable growth.

FY25 was a year of delivery, of strategy, of scale, and of resilience. As we look ahead, we remain focused on building a more diversified and robust business, capable of thriving across market cycles and delivering value for all stakeholders.

Income Statement

Revenue and Network Revenue

Network Revenue for the year was £25.8m, an increase of 61.8% on the prior year and a record year for the Network. The impressive growth, year on year, can be pinpointed to three things.

Firstly, off the back of a challenging two years, in which we experienced subdued M&A activity, levels of M&A activity in October 2024 were strong, as transactions completed to 'beat the budget' ahead of anticipated tax legislation changes. We estimate that this spike contributed to £3m of 'supernormal' Network Revenue, as we enjoyed both an increased number of deal volumes and in size of transaction in the run up to the Autumn Budget.

In FY25, we also benefitted from the investments we made in FY24, in which we welcomed a record number of new Partners into the Network. These additions included five corporate finance partners, who were able to benefit from the heightened M&A activity in October 2024. Underlying DSW licensee revenue grew by 52.8% year on year. Even after stripping out the 'supernormal' activity, Network Revenue grew by 34.1%.

Furthermore, the transformational acquisition of DR Solicitors significantly enhanced the Group's earnings, contributing £1.4m of income in the five-month period post-acquisition. This strategic acquisition has enabled us to expand into the legal sector, diversifying the business and reducing our dependency on M&A, which reduced from 68% to 55% in FY25. We expect our M&A dependency to reduce further to approximately a third in FY26, reflecting our efforts to build a more resilient business through synergistic diversification.

Our average effective licence fee reduced to 14.5% (FY24: 15.4%), reflecting reduced profit share contributions from some of our licensees as they invested in their teams to drive top-line growth. Overall income from licensees, including our share of results from associates, increased by 45.6% to £3.5m.

Fee Earners

FY25 proved to be a record-breaking year for Fee Earner growth, with headcount rising from 107 to 136 - a 27.1% increase year on year. This was driven by the acquisition of DR Solicitors in November 2024, which added 20 new Fee Earners to the Network. Encouragingly, we are pleased to report that nine heads (8.4%) joined as a result of organic growth across the Network, reflecting renewed confidence.

This momentum in both headcount and revenue growth underscores the effectiveness of our targeted investments and strategic acquisitions over the past year. By expanding our sector reach and deepening our talent pool, we have set a robust foundation for scalable growth. The integration of DR Solicitors has not only diversified our income streams but also enhanced our ability to attract high-caliber professionals looking for innovative, flexible working environments. These actions position us favorably to capture new opportunities, while maintaining operational excellence across the Group.

Last year, we noted that, while economic conditions created an opportunity for partner growth, many licensees were taking a cautious approach to recruitment. This year, a significant boost in market activity has prompted our teams to act. As a result, average team size has increased from 4.6 to 5.4, with notable growth in our new start-ups, which have established themselves as 'best-in-class' advisors in their local regions.

Revenue per Fee Earner increased by 39.5% to £214k (FY24: £153k), as a result of higher utilisation due to increased M&A activity and increased levels of contribution from start-ups who joined in the prior year. Our revenue per Fee Earner remains comparable with our larger listed peers such as Knights, Gateley and Keystone Law, as well as the Big 4.

The investment in partner recruitment in FY24 is now bearing fruit, and we remain confident that DSW continues to be a highly attractive destination for ambitious professionals as an organic recruitment momentum builds. Furthermore, we see significant potential for growth in DR Solicitors; in 2024, twice as many lawyers opted to leave 'traditional' law firms to move to 'platform' models like DR Solicitors. Our focus is to tap further into this growing trend in the legal sector.*

* Source: Codex Edge - Platform Firms Report 2025

Central Costs

We are committed to maintaining a lean cost base, whilst ensuring we provide our licensees with the support they need to thrive and fulfil their potential. We recognise that for our Partners and Employees to be the best that they can be, we need to invest in central initiatives that ensure we remain the best that we can be and provide increased value to our Licensees.

Central costs (excluding the share-based payment charge and acquisition costs) increased by £0.98m, on the prior year. Most of the increase can be linked to the DR Solicitors acquisition, with £0.4m being the acquired cost base of DR Solicitors and an additional £0.1m attributable to the increased amortisation charge linked to the customer relationships acquired within the year.

We also continued to re-invest in our central infrastructure, most notably marketing to promote our Brands and Partners, but also in technology and subscriptions to equip our licensees with the best tools and resources to deliver excellent client service.

We are largely insulated from wage inflation as licensee employee costs are borne by the licensee businesses and partners are remunerated based on the fees they bill. The fixed cost base now includes 19 people (excluding directors), 18 full time equivalents following the acquisition of DR Solicitors. This investment in the existing team and DR Solicitors led to increased staff costs which rose by £0.4m year on year from £1.0m to £1.4m. Similarly, the licensee businesses bear their own property costs or work from home. Therefore the Group's exposure to inflationary pressures is limited to two office premises.

We continued to invest in our marketing team and resources to strengthen the marketing offering we provide to all our licensees. This included appointing a new corporate PR provider for the Group and increased spending on external events and sponsorship.

Adjusted PBT, Adjusted EBITDA and Acquisition Costs

Adjusted PBT is calculated as follows:

Our Adjusted Profit Before Tax was £1.4m (2024: £0.5m), an increase of 182.2% on the prior year, reflecting increased levels of licensee activities, increased amortisation charges linked to the acquired customer relationships, increased provisioning against licensee balances, and increased investment in central infrastructure noted above.

Adjusted EBITDA was £1.8m (2024: £0.6m), an increase of 185.5% on the prior year, stripping out the increased amortisation charge and finance costs linked to the DR Solicitors acquisition.

We have a share-based payment charge in the year of £0.1m, which has reduced from £0.3m in the prior year. The £0.2m reduction year on year is due to the growth shares issued on IPO being fully expensed in the prior year and the ongoing charge now relating solely to the executive LTIP scheme.

Taxation

The effective rate of tax (based on PBT excluding the share-based payments charge which is non-deductible) was 23.1%, slightly above the statutory rate primarily due to depreciation and amortisation in excess of capital allowances.

Earnings Per Share

Earnings per share increased year on year due to the significantly increased profitability within the period, although the impact was partially diluted by the shares issued within the period linked to the DR Solicitors acquisition. Adjusted basic earnings per share for the year is 5.0p (2024: 2.0p). Adjusted EPS removes the impact of the share-based payment charge incurred in the year and acquisition costs (as shown above).

Balance Sheet

Cash

The Group's business model is cash-generative as the working capital requirement for the licensee businesses, which includes employee and property costs, are borne by the individual licensees. In addition, Partners only get paid when their invoices are paid so they are highly motivated to collect cash from clients. The acquisition of DR Solicitors brings another highly cash-generative platform model into the Group, which has impressively low lock up of 52.8 days, significantly below that of traditional law firms which average at 130 days.

Overall debtor days significantly reduced from 133 days to 61 days. This was largely due to the acquisition of DR Solicitors which has debtor days of 20, but have also seen an improvement in debtor days across DSW licensees, due to improved cash generation across our licensee businesses.

Cash generated from operations was £2.0m (2024: £0.1m). Operating cash conversion4 in the year was 113%, a significant improvement on the prior year (2024: 14%), which was impacted by the subdued M&A activity but also an outflow of £0.5m in loans to new licensees. Operating cash conversion was boosted by the 'supernormal' Network Revenue, further cash generation from DR Solicitors, and £0.2m of loan repayments from licensees within the year.

Capital expenditure was minimal in the year (£0.06m) and lease payments of £0.12m related to the Offices in Daresbury and London. Interest income (£0.2m) was earned on licensee loans and the Group's cash balances.

The closing cash and cash equivalents balance remains healthy with cash balances as at 31 March 2025 of £2.7m (2024: £2.6m). Cash balances increased by £0.1m, due to strong cash generated from operations of £2.0m, offset by a net cash outflow of £0.8m from existing cash reserves in relation to the DR Solicitors acquisition. Total cash consideration for DR Solicitors was £3.7m, of which £2.9m was funded by a new revolving credit facility secured within the period. Additional cash outflows include £0.6m of corporation tax payments (2024: £0.2m) and dividends of £0.4m paid within the period (2024: £0.7m). 

Borrowings

As mentioned above, a £3.0m revolving credit facility was secured within the period and fully drawn down to fund the DR Solicitors acquisition. The facility carries interest of 4.5% above the Bank of England base rate and is subject to standard gross leverage and interest cover covenants. In FY25, interest of £113k was paid on the facility. At 31 March 2025, the Group had net debt of £0.3m (FY24: £2.6m net cash). On the 12 June 2025, a repayment of £1.0m was made as a result of the strong cash generation in FY25.

Net Assets

The Group has a strong balance sheet with net assets of £10.0m at the year-end (2024: £7.6m). We continue to retain healthy cash resources and have access to additional funding through the revolving credit facility, which gives us the fire power to continue taking advantage of current recruitment and strategic acquisition opportunities.

Dividend

Following the strong performance in FY25, the Board has taken the decision to propose a final ordinary dividend for the year ended 31 March 2025 of 2.0 pence per share, giving total dividends for the year ended 31 March 2025 of 3.0 pence per share. Following the suppressed dividend payment in FY24 (FY24: Total dividends of 2.0 pence per share), the Board is pleased to be reinstating a progressive dividend policy. This decision is a result of the improved performance in FY25, but also the successful diversification of the business with the acquisition of DR Solicitors, significantly reducing the Group's exposure to M&A activity.

An interim dividend of 1.0 pence per share in respect of the six months to 30 September 2024 was paid on 10 January 2025.

The final dividend will be approved at the Company's AGM which will be held on 16 September 2025 at The Park Royal Hotel, Warrington, WA4 4NS.

Assuming the FY25 Final Dividend of 2.0 pence is approved at the AGM, the Group will have paid out 12.98 pence per share in dividends since its IPO in December 2021.

Pete Fendall

Chief Finance & Operating Officer

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2025

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2025

The financial statements were approved by the board of directors and authorised for issue on 7 July 2025. They were signed on its behalf by:

Pete Fendall

Chief Finance and Operating Officer

7 July 2025

COMPANY STATEMENT OF FINANCIAL POSITION

As at 31 March 2025

The profit after tax for the Company was £798,000 (2024: £132,000). Under s408 of the Companies Act 2006, the company is exempt from the requirement to present its own income statement.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2025

COMPANY STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2025

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 March 2025

COMPANY CASH FLOW STATEMENT

For the year ended 31 March 2025

NOTES TO THE FINANCIAL STATEMENTS

1. General information

DSW Capital plc, registered as a public company in England and Wales, with registered number: 07200401. The principal activity of the Company and its subsidiaries, DSW Services LLP, DSW Operations Limited and DR Solicitors Limited (together referred to as the 'Group') is the licensing of the Dow Schofield Watts and associated brand names for use in the professional services sector, whilst providing legal services under the DR Solicitors brand name.

The address of the Company's registered office is:

7400 Daresbury Park

Daresbury

Warrington

WA4 4BS

The Financial Statements are presented in Pounds Sterling (£), which is the currency of the economic environment in which the group operates. All amounts are rounded to the nearest £'000 except where noted.

2. Accounting policies

Basis of Preparation

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined by section 434 of the Companies Act 2006.

 The results for the year ended 31 March 2025 have been extracted from the full accounts of the Group for that year which received an unqualified auditor's report and which have not yet been delivered to the Registrar of Companies. This preliminary financial information has been prepared on the same basis as the accounting policies adopted in those financial statements but does not include all the disclosures required in financial statements prepared in accordance with UK adopted International Accounting Standards and accordingly does not itself comply with UK adopted International Accounting Standards. The audited financial statements for the year ended 31 March 2025 were approved by the Directors on 7 July 2025.

 The financial information for the year ended 31 March 2024 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The report of the auditor on those filed accounts was unqualified.

 The accounts for the year ended 31 March 2025 and 31 March 2024 did not contain a statement under s498 (1) to (4) of the Companies Act 2006. The statutory accounts for the year ended 31 March 2025 will be distributed to shareholders on 12 August 2025, in advance of the Annual General Meeting and made available on our website (https://dswcapital.com/investors/) or on request by contacting the Company Secretary at the Company's Registered Office.

Statement of Compliance

The Group financial statements have been properly prepared in accordance with UK adopted international accounting standards; the Parent Company financial statements have been properly prepared in accordance with UK adopted international accounting standards and has applied in accordance with the provisions of the Companies Act 2006.

The preparation of financial statements in compliance with adopted UK IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies. The areas where significant judgments and estimates have been made in preparing the financial statements and their effect are disclosed in Note 3.

Impact of the initial application of other new and amended IFRS Standards that are effective for the current year

In the current year, the Group has applied a number of amendments to IFRS accounting standards issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2024. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

· Amendment to IAS 1 - Classification of Liabilities as Current or Non-Current

· Amendment to IFRS 16 - Lease Liability in a Sale and Leaseback

· Amendment to IAS 1 - Non-Current Liabilities with Covenants

· Amendment to IAS 7 and IFRS 7 - Supplier Finance Arrangements

New and revised IFRS Standards in issue but not yet effective

In preparing these financial statements, the Group has not applied the following new and revised IFRS Standards that have been issued but are not yet effective.

· Amendments to IAS 21 - Lack of Exchangeability

· Amendments to SASB standards to enhance their international applicability

· IFRS S1 - General Requirements for Disclosure of Sustainability Related Financial Information

· IFRS S2 - Climate-related Disclosures

· IFRS 18 - Presentation and Disclosure in Financial Statements

The Directors do not expect the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods.

Basis of accounting

The Financial Statements have been prepared on the historical cost basis, except for the revaluation of financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.

In the prior years consolidated financial statements, the parent company cashflow statement was excluded in error. This has been rectified in the current year, with comparatives. There is no impact on net assets or profit measures.

The principal accounting policies adopted are set out below.

Going concern

In considering the appropriateness of the going concern basis of preparation, the Directors have considered the cash balance and the forecasts for the next twelve months following the date of this report, which includes detailed cash flow forecasts and working capital availability. These forecasts show that sufficient resources remain available to the business for the foreseeable future in order to meet its operational and financial obligations as they fall due.

The Group has a significant cash balance of £2.7m, has a model which is strongly cash generative and a limited fixed cost base. At 31 March 2025, the Group has net assets of £10.0m (2024: £7.6m) and net current assets of £3.8m (2024: £4.3m) which reflects the strong financial position for the Group. In addition, the Group is profitable with adjusted profit after tax of £1.1m in the year ended 31 March 2025.

The Group has prepared detailed cash flow forecasts and stress-tested various scenarios, all of which indicate that the Group will maintain adequate liquidity throughout the forecast period. Furthermore, the Group remains in full compliance with all financial covenants associated with its borrowing facilities. Based on current forecasts and financial performance, management expects to continue to meet these covenants for the foreseeable future.

As such, the Group financial statements have been prepared on a going concern basis as the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

Basis of consolidation

The consolidated Financial Statements incorporate the Financial Statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 March each year. Control is achieved when the Company:

· has the power over the investee;

· is exposed, or has rights, to variable returns from its involvement with the investee; and

· has the ability to use its power to affects its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

· the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

· potential voting rights held by the Company, other vote holders or other parties;

· rights arising from other contractual arrangements; and

· any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

Investments in subsidiaries are recognised at cost in the statement of financial position of the parent company.

Investments in associates and jointly controlled entities

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a jointly controlled entity. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

A jointly controlled entity is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. 

The results and assets and liabilities of associates or jointly controlled entities are incorporated in these Financial Statements using the equity method of accounting.

Under the equity method, an investment in an associate or a jointly controlled entity is recognised initially in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate or jointly controlled entity. The Group's share of the profit or loss is driven by the contractual arrangements in place. The Group's share of the profit or loss is defined by the economic interest in the associate or jointly controlled entity as stipulated in the legal arrangements, which differs from the percentage voting rights held.

The requirements of IAS 36 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group's investment in an associate or a jointly controlled entity. When necessary, the entire carrying amount of the investment is tested for impairment in accordance with IAS 36 as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount.

The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or a jointly controlled entity.

Other Investments

Where long-term loans are made to licensees, the Directors of the Company have accounted for them as investments under IFRS 9. These loans are accounted for using the amortised cost method. See note 3 for associated critical judgements involved in determining the appropriate classification of long-term loans to licensees.

To determine the fair value of the long-term loans, the Directors of the Company uses the discounted cashflow valuation technique. Differences may arise between the transaction price of the loan at initial recognition and the amount determined at initial recognition using the valuation technique. Any such differences are capitalised in prepayments and accrued income where they are held as Contract Assets and amortised over the loan term. 

Revenue recognition

Revenue comprises revenue recognised by the Group in respect of services supplied during the year, exclusive of Value Added Tax.

The Group recognises revenue from the following major sources:

· Licence fee income

· Profit share income

· Provision of legal services

Licence fee income is recognised at the point at which the performance obligations, as defined by the contractual arrangements, have been satisfied which is primarily when revenue has been invoiced by the licensees over time. Profit share income is only recognised at the point at which the risk of reversal is deemed to be remote.

Revenue from the provision of legal services is either generated from variable or fixed fee matters. Revenue is recognised on variable fee matters in line with the hours recorded by a consultant and invoiced on a monthly basis in accordance with the terms of business. Revenue is recognised on fixed fee matters based on the respective stage of completion of each matter. This is determined by taking into account the time elapsed, a review of the performance to date, and milestones reached.

Leases

As a lessee

The Group applies IFRS 16 to account for leases. At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to restore the underlying asset, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liabilities.

The lease liability is initially measured at the present value of lease payments that were not paid at the commencement date, discounted using the Group's incremental borrowing rate. The average incremental borrowing rate applied to lease liabilities during the year is 7.80%.

The lease liability is measured at amortised cost using the effective interest method. If there is a remeasurement of the lease liability, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded directly in profit or loss if the carrying amount of the right-of-use asset is zero.

Short-term leases and low value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less or leases of low value assets. These lease payments are expensed on a straight-line basis over the lease term.

Dilapidations provision

The Group recognises a provision for the future costs of dilapidations on leased office space. The provision is an estimate of the total cost to return applicable office space to its original condition at the end of the lease term.

As a lessor

The Group applies IFRS 16 to account for leases. When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.

When the group is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.

Amounts due from lessees under finance leases are recognised as receivables at the amount of the group's net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the group's net investment outstanding in respect of the leases.

Subsequent to initial recognition, the Group regularly reviews the estimated unguaranteed residual value and applies the impairment requirements of IFRS 9, recognising an allowance for expected credit losses on the lease receivables.

Finance lease income is calculated with reference to the gross carrying amount of the lease receivables, except for credit-impaired financial assets for which interest income is calculated with reference to their amortised cost (i.e. after a deduction of the loss allowance).

Operating profit

Operating profit is stated after charging the share of results of associates and jointly controlled entities, but before finance income and finance costs.

Retirement and termination benefit costs

Payments to defined contribution retirement benefit plans are recognised as an expense in the consolidated statement of comprehensive income in the periods during which services are rendered by employees. Payments made to state-managed retirement benefit plans are accounted for as payments to defined contribution plans where the Group's obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.

Short-term and other long-term employee benefits

Wages, salaries, paid annual leave, sick leave and bonuses are accrued in the period in which the associated services are rendered by employees of the Group.

Taxation

The income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the consolidated statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements and on unused tax losses or tax credits available to the Group. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Property, plant and equipment

Property, plant and equipment is stated in the statement of financial position at cost less accumulated depreciation and accumulated impairment loss.

Depreciation is charged so as to write off the cost of assets over their estimated useful lives, as follows:

DSW

DR Solicitors

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives which are disclosed below. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. The estimated useful life of intangible assets is as follows:

Business Combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interest issued by the Group in exchange for control of the acquiree. Acquisition-related costs, other than those associated with the issue of debt or equity, are recognised in profit or loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the acquisition date.

Goodwill

Goodwill is measured at the acquisition date as the fair value of consideration transferred, plus non-controlling interests and the fair value of any previously held equity interests less the net recognised amount (which is generally fair value) of the identifiable assets and liabilities assumed.

Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups of cash-generating units) expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Financial instruments

Financial assets and financial liabilities are recognised in the statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

The Group's financial assets include cash and cash equivalents, trade and other receivables that arise from the business operations, loans to licensees, accrued revenue and contract assets.

All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs.

All recognised financial assets are measured subsequently in their entirety at amortised cost.

Amortised cost and effective interest method

(a) Trade and other receivables

Trade receivables are stated at their original invoiced value. Trade receivables are reduced by appropriate allowances for estimated irrecoverable amounts. See Note 3 for details of the loss allowance.

(b) Loans owing from licensees

Loans are measured at amortised cost at their effective interest rates. The amortised cost of a loan is the amount at which the loan is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance.

(c) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value

(d) Accrued Revenue

Accrued revenue relates to work performed by consultants which is yet to be billed and profit share income accrued from licensees. Accrued revenue relating to work performed by consultants is calculated based on their hours worked and measured at their original invoice price. Accrued income relating to profit shares is calculated in line with the terms of the contract between DSW Capital and the licensee based on their performance for the financial year. Accrued revenue is disclosed within prepayments and accrued income. See Note 20 for details.

(e) Contract Assets

Amounts relating to contract assets, which are disclosed within prepayments and accrued income, are balances that can be classified as incremental costs of obtaining a revenue contract. These include the breakout incentives which provide businesses with an initial free-cash injection, as well as the below-market element of loans offered to licensee businesses. Amortisation is recognised on a straight-line basis over the life of the contract.

Interest income is recognised in profit or loss and is included in the "finance income" line item (Note 9).

Impairment of financial assets

The Group recognises a loss allowance for expected credit losses on the Group's loans to licensees and trade receivables. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial asset.

The expected loss rates for these financial assets are based on the Group's historical credit losses experienced over the three-year period prior to the period end. An additional portfolio expected loss provision is calculated in which the historical loss rates are then adjusted for current and forward-looking information on macroeconomic factors affecting the Group's licensees. The Group has identified the changing insolvency rates in the UK as the key macroeconomic factor.

(i) Definition of default

The Group considers when a licensee business is terminated or ceases to trade as default events.

(ii) Measurement and recognition of expected credit losses

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e., the magnitude of the loss if there is a default), and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for financial assets, this is represented by the assets' gross carrying amount at the reporting date.

For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.

The Group recognises an impairment loss in the consolidated statement of comprehensive income for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

All financial liabilities are measured subsequently at amortised cost using the effective interest method.

Financial liabilities are included in the statement of financial position as trade and other payables and borrowings.

(a) Trade and other payables

Trade payables are stated at their original invoiced value. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

(b) Borrowings

All borrowings are initially recorded at the amount of proceeds received, net of transaction costs. Borrowings are subsequently carried at amortised cost and the interest expense is recognised on the basis of the effective interest method and is included in finance costs. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Dividend Policy

The Board has adopted a progressive dividend policy to reflect the expectation of future cash flow generation and long-term earnings potential of the Group. The Board may, however, revise the Group's dividend policy from time to time in line with the actual results of the Group.

Dividends are recognised once they have been paid.

Related Party Transactions

Details of related party transactions entered into by members of the Group are set out in Note 31.

Share-based payments

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value excludes the effect of non-market-based vesting conditions. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 26.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the number of equity instruments that will eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recognised in the consolidated statement of comprehensive income such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the share based payment reserve.

Finance Income

The Group's finance income includes interest income on long-term loans made to licensees which is calculated using the effective interest method, and interest received on cash and cash equivalents.

Merger Reserve

Where an acquisition has occurred through the issue of shares and acquiring more than 90% of the share capital of the subsidiary, the excess of the fair value of consideration received over the par value of ordinary shares issued is recorded in a separate non-distributable reserve within equity.

3. Critical accounting judgements and key sources of estimation uncertainty

In applying the Group's accounting policies, which are described in Note 2, the Directors are required to make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis.

Critical judgements in applying the Group's accounting policies

The following are the critical judgements, apart from those involving estimations (which are presented separately below), that the Directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the Financial Statements.

Where the Group holds voting rights in an underlying licensee, an assessment of the ability to exert control over these entities is made based on whether the Group has the practical ability to direct the relevant activities of these entities unilaterally. Investments in associates have been recognised for entities where the Group holds between 20% and 50% of the voting rights and does not have any unilateral powers other than protective ones. Where the Group has more than 20% of the voting rights, it is deemed to have significant influence over the licensees and thus they are accounted for as investment in associates.

There is one entity in which the Group has 51% of the voting rights and 16.7% of the economic rights. However, all significant operational decisions require the unanimous consent of the parties. As such this entity has been recognised as an investment in a jointly controlled entity.

Where long-term loans are made to licensees, these are accounted for as investments under IFRS 9 using the amortised cost method. The long-term loans provided to licensees have 20-year terms and are only repayable at the end of the term and therefore in substance, are more akin to investments. The average interest rate is 6.1%.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

When measuring expected credit loss ("ECL"), the Group uses reasonable and supportable forward-looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other.

Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions for the licensee business.

The Group assesses each licensee individually as to the probability of default on their loans based on their cash balances and their ability to pay the cash flows due.

Also, the Group has elected to calculate an additional portfolio expected loss provision in which the historical loss rates are adjusted for current and forward-looking information on macroeconomic factors affecting the Group's licensees. The Group has identified the changing insolvency rates in the UK as the key macroeconomic factor as the failure of corporates is deemed to be a reasonable macroeconomic predictor for the likely failure of a licensee business on a portfolio basis.

Goodwill and intangible assets

During the year, the Group acquired DR Solicitors, and in doing so recognised customer relationships as an intangible asset on consolidation.

In attributing value to the intangible asset arising on acquisition, management has made certain assumptions in terms of cash flows attributable to customer relationships. To assist in this work, the Group engaged external valuation experts to assess the fair value of the customer relationships and management reviewed the work carried out and assessed the outcome.

The value of customer relationships has been estimated based on the estimated net future revenues expected to be generated by them. The revenue estimations rely on annual growth rates. Management have selected the appropriate rates based on a combination of observed historical growth, industry benchmarks and forecasted influencing factors. The use of different assumptions for the expectations of future cash flows and the discount rate would change the valuation of the intangible asset, with a resultant impact on the goodwill recognised.

4. Revenue

The disclosure of revenue by product line is consistent with the revenue information that is disclosed for each reportable segment under IFRS 8 (see Note 5). All revenue is recognised over time. 

Disaggregation of revenue

A further breakdown of revenue by reporting line is shown below:

5. Operating segments

Products and services from which reportable segments derive their revenues

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Marker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group's Chief Executive Officer.

The Group has five reporting lines, identified above, which divide licence fees and profit share income between those attributable to M&A and Other, along with the legal fee income that was acquired in the year. The Group only has two operating segments due to the nature of services provided across the whole Group being revenue derived from licensing of the Dow Schofield Watts brand and associated brand names for use in the professional services sector, and legal fee income that was acquired in the year.

The segmental results for the year ended 31 March 2025 are as follows:

The segmental results for the year ended 31 March 2024 are as follows: