14 September 2023

Interim results for the six month period ended 31 July 2023

 

-         Strong client demand drives excellent operational and financial performance with a 25.2% increase in adjusted PBT

-         Ongoing business confidence supports interim ordinary dividend of 5.8p and special dividend of 12.5p

-         FY 2024 outlook comfortably ahead of current market expectations(1)

Keystone, the network and tech-enabled challenger law firm, is pleased to announce its interim results for the six months ended 31 July 2023 (“H1 2024”).

Financial Highlights:

  • Revenue growth of 14.9% to £42.3 million (H1 2023: £36.8 million)
  • Revenue per Principal up 12.2% to £104k (H1 2023: £92.8k)
  • PBT increased 29.3% to £5.3 million (H1 2023: £4.1 million)
  • Adjusted PBT increased 25.2% to £5.7 million (H1 2023: £4.5 million)
  • Adjusted basic EPS of 13.6p, up 22.5% (H1 2023: 11.1p)
  • Strong operating cash conversion at 113.3% with cash generated from operations of £6.3 million (H1 2023: £4.9 million).
  • The Group remains debt-free with net cash of £11.3m (H1 2023: £7.5m)
  • Declared interim ordinary dividend of 5.8p (H1 2023: 5.2p) and special dividend of 12.5p

Operational Highlights:

  • Recruitment market conditions evolved positively
  • Keystone generated strong market and recruitment momentum during H1 2024:
    • 144 qualified high-calibre new applicants (H1 2023: 122)
    • 25 Principals joined, increasing the number of Principals to 415 (31 January 2023: 398)
    • Total fee earners increased to 523 (31 January 2023: 507)
  • Ongoing investment in our people, culture and technology platform

Current Trading and Outlook:

  • Activity levels and client demand remain strong
  • Recruitment market conditions have moved in the Group’s favour, with the Keystone model continuing to attract high-calibre talent, although economic uncertainty continues to weigh on candidate flow
  • The Board is confident that the business will continue to trade well for the rest of the year and that FY 2024 results will be comfortably ahead of current market expectations(1).

 

James Knight, Chief Executive Officer of Keystone, commented:

“I have been delighted with the performance of the business during the first half of this year.  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.”

(1)      Management understands current market expectations to be revenue £78.9m and adjusted PBT £9.5m

 

Analyst Briefing 

A meeting for analysts will be held virtually at 9.30am this morning. Analysts wishing to attend this event can register via email at [email protected] .

 

For further information please contact:

 

Keystone Law Group plc

James Knight, Chief Executive Officer

Ashley Miller, Finance Director

www.keystonelaw.com

 +44 (0) 20 3319 3700

 

Panmure Gordon (UK) Limited (Nominated Adviser and Joint Broker)

Dominic Morley (Corporate Finance)

Rupert Dearden (Corporate Broking)

www.panmure.com

+44 (0) 20 7886 2500

 

Investec Bank plc (Joint Broker)

Carlton Nelson

James Rudd

www.investec.co.uk

+44 (0) 20 7597 5970

 

Vigo Consulting (Financial Public Relations)

Jeremy Garcia / Kate Kilgallen

[email protected]

+44 (0)207 390 0233

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”).

Notes to editors

Keystone (AIM: KEYS), is an award-winning, UK Top 100, law firm, providing conventional legal services in a £10bn addressable market through its scalable and unique model, with three defining characteristics:

  • Lawyers have freedom, flexibility and autonomy, and are paid up to 75% of what they bill.
  • Lawyers determine how, when and where they work, in contrast to the conventional law firm model.
  • Lawyers are provided full infrastructure and support via its central office team, bespoke user-friendly IT platform, and network of colleagues and events.

Keystone is a full-service law firm, with 20 service areas and more than 50 industry sectors delivered by over 400 high calibre self-employed Principal lawyers who work from their own offices.

In November 2020, Keystone was named Law Firm of the Year by The Lawyer, the first time a 'new' law firm has won the award.

More information about Keystone can be found at www.keystonelaw.co.uk.