24 April 2023

Full Year results for the period ending 31 January 2023

Sustained financial and operational growth underpinned by Keystone’s unique model and technology platform

 

Keystone, the network and tech-enabled challenger law firm, is pleased to announce its full year results for the year ended 31 January 2023 (“FY 2023”).

Financial Highlights:

  • Revenue growth of 8.1% to £75.3 million (2022: £69.6 million)
  • Revenue per Principal up 4.1% to £190k (2022: £182.5k)
  • PBT of £8.4 million (2022: £8.4 million)
  • Adjusted PBT of £9.2 million, up 6.3% v Underlying Adjusted PBT 2022 of £8.7 million (1)
  • Adjusted basic EPS of 24.2 pence, up 2.5% from 23.6 pence
  • Strong operating cash conversion at 96.5% with cash generated from operations of £9.3 million (2022: £10.0 million); the Group remains debt-free
  • Proposed final ordinary dividend of 10.9p (2022: 11.2p), bringing total ordinary DPS for the year to 16.1p (2022: 15.7p)

(1) Adjusted PBT in 2022 (£9.1m) was enhanced by approximately £0.4m from impact of Covid-19 and related restrictions, excluding these underlying adjusted PBT was c£8.7m and Underlying adjusted PBT margin would have been 12.5%

Operational Highlights:

  • Registered 232 qualified high-calibre new applicants (2022: 228) against a backdrop of a highly competitive recruitment market
  • 32 Principals joined across FY 2023, increasing the number of Principals to 398 (2022: 394)
  • Total fee earners increased to 507 (2022: 481)
  • Delivered of a full programme of face-to-face networking and social events, which form such an essential part of our DNA, enhancing both the professional and personal experience of those working at Keystone
  • Continued investment in our central office team, ensuring that the service delivery ethos and level of support enjoyed by our lawyers remains second to none
  • Ongoing investment in technology platform:
    • designing and building proprietary pitch creation tool to enable our lawyers to produce personalised pitches quickly and easily
    • developing bespoke tool to drive greater operational efficiency in preparation and submission of applications to legal directories

Current Trading and Outlook:

  • Keystone has made a positive start to the current financial year, with levels of client demand remaining strong
  • Conditions in the recruitment market are starting to change as demand for lawyers is falling from the exceptional levels experienced in recent years. However, candidates still cautious of change
  • The Board remains confident that FY 2024 will be another good year.

James Knight, Chief Executive Officer of Keystone, commented:

“Keystone has delivered another strong financial performance; growing revenue, increasing underlying profits and generating strong cashflow. Our unique business model continues to appeal to the high-calibre candidates we seek to recruit and, in what has been a highly competitive recruitment market, we have continued to grow our lawyer base.

The new financial year has started well.  We have started to see demand for recruitment of lawyers across the industry cooling slightly from exceptional levels, and I am confident that as the year progresses, we will see traditional push factors generating increased candidate flow which will further support our growth.”

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] .

Retail Investor Presentation

Keystone Law's management team will provide a separate presentation and Q&A for investors at 1.00pm on Wednesday, 26 April 2023.

The presentation will be hosted on the Investor Meet Company digital platform, where questions can be submitted pre-event up until 9.00am on the day before the meeting, or at any time during the live presentation.

To sign up to IMC, please visit:

www.investormeetcompany.com/keystone-law-group-plc/register-investor

 

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 / Charlie Neish / 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 nearly 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.