Trading Update and Notice of Results
FY25 revenue up 61% to £25.8m and Adjusted EBITDA tripled to £1.76m, ahead of forecasts, following DR Solicitors acquisition.
vs expectations: ahead
- Network Revenue £25.8m (prior £16.0m)
- Adjusted EBITDA £1.76m (prior £0.6m)
- Average revenue per fee earner £214k (prior £153k)
- Fee earners 136 (prior 107)
- Cash balances £2.7m (prior £2.3m)
- Net debt £0.3m (prior £2.6m net cash)
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DSW Capital, a profitable, mid-market, challenger professional services licence network and owner of the Dow Schofield Watts and DR Solicitors brands, announces the following trading update, ahead of the Group's Final Results for the year ended 31 March 2025 ("FY25" or the "Year"), which will be released on 8 July 2025.
Following the transformative, earnings-enhancing acquisition of DR Solicitors and a significant upgrade to FY25 guidance, resulting from supernormal levels of 'Beat the Budget' M&A activity, announced earlier in the Year, the board is delighted to report that FY25 revenue and Adjusted EBITDA are ahead of current market forecasts.
FY25 financial highlights
| • | Network Revenue is expected to increase by 61% to a record £25.8m (FY24: £16.0m), ahead of market expectations |
| • | Adjusted EBITDA, which is also ahead of forecasts, is expected to almost triple to £1.76m (FY24: £0.6m) |
| • | Average revenue per fee earner in the Year was £214k (FY24: £153k) |
| • | Acquisition of DR Solicitors for a total consideration of £6.1m, satisfied by £4.3m in cash and £1.8m of new ordinary shares, bringing a highly scalable, cash-generative, and profitable legal platform to the Group |
| • | Fee earners increased by 27% to 136 (FY24: 107), following the acquisition of DR Solicitors, which brought 20 to the Group, and a further nine fee earners joining our existing licensees |
| • | Balance sheet is healthy, with cash balances of £2.7m at 31 March 2025 (HY25: £2.3m) and net debt of only £0.3m (FY24: £2.6m net cash), following the acquisition of DR Solicitors and the drawdown of a new £3.0m RCF to part fund the deal |
| • | As previously announced, the progressive dividend policy expected to be maintained with a proposed final dividend for the Year of 2.0p (FY24: 0.75p) |
| FY25 operational highlights | |
| • | Unprecedented levels of M&A activity created c.£3.0m of supernormal Network Revenue in October 2024; with M&A activity levels returning to normal levels from November 2024 |
| • | The integration of DR Solicitors, acquired in November 2024, is going to plan with the business performing well, contributing £0.47m to FY25 Adjusted EBITDA |
| • | Diversification strategy furthered via acquisition of DR Solicitors: The Group's dependency on M&A reduced significantly in FY25 to 55% of Total Income from licensees (FY24: 68%), with a further substantial reduction to around a third expected in FY26 following a full year's contribution from DR Solicitors |
| Outlook | |
| • | Shru Morris succeeded James Dow as CEO on 1 April 2025, in line with previously announced succession plan. James continues to play a key role in the business as Executive Director |
| • | DR Solicitors continues to perform in line with the board's expectations, with a growing pipeline of opportunities to scale the platform of which the Group is actively exploring a number of options. |
| • | M&A activity levels in the DSW Network returned to normal post the Government's autumn budget and this has continued into the new fiscal year, which has started in line with expectations |
| • | While the board is ever mindful of the potential for market disruption, resulting from the considerable geo-political and economic volatility, it remains confident in the prospects for the business and its strategy to build shareholder value over the long term |
Shru Morris, Chief Executive Officer, said:
"It is an honour to lead this business and a pleasure that my first announcement as CEO is such a positive one. We have a great team and I would like to thank everyone in the DSW Network for their individual contributions to an outstanding Group performance in FY25, and for their hard work.
"DR Solicitors, our newly acquired legal platform business, also performed well in its first five months with the Group. I thank everyone for their contribution to our FY25 performance. The DR platform is highly scalable, creating a wealth of opportunities for the Group. Our intention is to expand into new legal specialisms, and we are actively exploring a number of exciting options for the business. The pool of candidates working through consultancy models is vast and growing, and it remains our intention to focus on accelerating the growth of this business, building, over time, a substantial platform of diversified, niche legal services.
"The global economic disruption may create a more challenging M&A market in the year ahead, but we are committed to turning those challenges into opportunities in recruitment, which slowed in FY25 due to the abnormally high activity levels. Our reliance on M&A revenues, however, is much reduced by the addition of DR Solicitors with its more predictable revenues, and we have a more balanced business as we enter FY26.
"We shall continue to pursue our strategic goals to diversify, strengthen and grow the business in the year ahead and to maximise on the opportunities presented to us."
Definitions:
Total income from licensees - Statutory Revenue plus share of results of associates
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