Trading Update

DSW Capital, a profitable, mid-market, challenger professional services licence network and owner of the Dow Schofield Watts brand, announces the following trading update for the year ending 31 March 2024 ("FY 24" or the "Period").

Having seen five consecutive months of improving trading performance through to the end of December, with licensees reporting a return to more normalised levels of M&A activity, it is disappointing to report that Network revenue for January was substantially below our expectations. More significantly, in February, we have been advised of both slippage to some previously anticipated deal revenue and, to a lesser extent, deal aborts, which will impact the Group's FY 24 performance.

As a result of these changes, and given the Group's H2 weighting, we now anticipate FY 24 adjusted pre-tax profit to be in the range of £0.6m to £0.7m. Given the return to more uncertainty in the broader M&A market, the Board is now more cautious for the FY 25 outturn.

The Group remains profitable, despite the challenging market conditions, and maintains a healthy cash balance of £2.7m at 31 January 2024, following the £0.2m dividend payment in that month.

James Dow, Chief Executive Officer said:

"Whilst it is very disappointing that the improving trend we saw in the M&A market has stalled, our confidence in the medium-term outlook for the Group is unwavering, and we remain well positioned for when the M&A market returns.

"In the meantime, we continue to invest in recruitment and to grow the Network. Diversification into new service lines not reliant on M&A remains a focus. The business recovery and tax advisory licensees, which were acquired during the year, have performed well, and we are seeing record numbers of enquiries from potential new partners and licensees."