DWF Grows Revenue 15% as IPO Cost Revealed
Reported profits before tax have taken a hit, owing in large part to the costs attached to the firm's March IPO.
July 31, 2019 at 04:23 AM
3 minute read
DWF grew its revenue by 15% to £272 million last year and spent £12.6 million preparing for its springtime IPO, results posted to the stock market today (July 31) have revealed.
The firm's financial results for the year ending April 30, 2019 show that the £12.6 million dented the firm's reported profits before tax, which have decreased to £12.3 million from last year's £21.2 million – a 42% reduction.
However, the firm also stated that its gross profit increased by nearly £20 million to £145.5 million during the course of the year. Earnings before interest, taxes, depreciation and amortisation were also up, by 9% to £33.6 million.
Administrative expenses at the firm increased by nearly £30 million to £131 million – a 27% increase – which also includes "share-based payment expenses" of £1.2 million.
Despite these costs, however, the firm has managed to wipe £19 million off its net debt, which now stands at £35.3 million.
DWF's 2018-19 revenue uplift continues a three-year growth trend that sprung out of a poor 2015-16, when the firm's top line receded by 2%.
The firm's CEO Andrew Leaitherland said in a statement: "These results mark the end of a milestone year for DWF, in which we became the largest listed full-service legal business on the London Stock Exchange.
"I am pleased to report another strong period of revenue and profit growth for our maiden results post-IPO, driven by an uplift across all four divisions, with international and connected services the standout performers."
According to the firm's statement, international expansion is a priority, which the firm expects to achieve by way of "future associations or additional acquisitions in legal markets which we would like to enter". The firm marks out Poland, Spain, the U.S., Canada, Hong Kong and the Netherlands as key regions for its expansive efforts.
DWF's shares stayed broadly flat on the news at 122p, while the FTSE all-share index dropped by about 10.50 points.
The firm's financial analysts gave conflicting views on the results, with Stifel Europe saying the firm had "delivered strong first prelim results following its March 2019 IPO, with headline numbers in line with expectations", while Jefferies International described the firm's H2-2019 organic growth as being "slightly below our estimates".
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