DWF Group PLC Trading update (3246Y)

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RNS Number : 3246Y

DWF Group PLC

08 September 2020

DWF Group plc

("DWF" or "the Company" or "group")

LEI: 213800O9QREOHTOGQ266

8 September 2020

Trading update for the first quarter ended 31 July 2020

Strong recovery in FY21 first quarter following COVID-19 impacted FY20

DWF, the global legal business, today announces a trading update for the first quarter of FY21.

 
                        Unaudited*   Unaudited*   Unaudited* 
 GBPm                   FY21 Q1      FY20 Q1      Change 
                       -----------  -----------  ----------- 
 Net revenue            84.3         70.1         20.3% 
                       -----------  -----------  ----------- 
 Gross profit           41.5         35.4         17.2% 
                       -----------  -----------  ----------- 
 Gross profit margin 
  (%)                   49.2%        50.5%        -1.3 ppts 
                       -----------  -----------  ----------- 
 Underlying adjusted 
  EBITDA                9.7          4.0          144.7% 
                       -----------  -----------  ----------- 
 Underlying adjusted 
  PBT                   7.4          2.2          231.4% 
                       -----------  -----------  ----------- 
 Reported PBT           -0.6         1.9          -133.9% 
                       -----------  -----------  ----------- 
 Net debt (excluding 
  IFRS 16)              (55.2)       (48.3)       14.3% 
                       -----------  -----------  ----------- 
 

*Source: July 2020 Management Accounts

FY21 TRADING UPDATE

-- Strong trading for the first three months of FY21 with revenue of GBP84.3m reflecting growth of 20% and Underlying adjusted EBITDA of GBP9.7m reflecting growth of 145% vs. prior year.

-- Organic revenue growth of 5% yoy and total revenue growth of 20% reflecting the contribution from the acquisitions of RCD in Spain and Mindcrest

-- Previously announced cost savings of GBP15m in FY21 are taking effect and are reflected in the significant uplift in EBITDA versus prior year, with cost to income ratio trending at 38% compared to 45% in the prior year

-- Disposed, closed or reduced scale of operations in Cologne, Dubai, Singapore and Brussels with further measures taken post year-end to rationalise underperforming units

-- Net debt of GBP55.2m reflecting a GBP9.7m reduction on the April 20 position and reflecting free cash flow generation of GBP18.5m for the first three months of the year

-- Lock up days reduced from 206 at April 2020 to 200 at the end of Q1 reflecting trading conditions returning to normal

   --      Significant bid activity and new contract win with multinational insurance company, Aviva 

-- Our Net Promoter Score with key clients is very positive at 50, and 47 overall, based on 403 clients providing feedback

-- Strong pipeline of opportunities including Managed Services bid activity supports optimism for the FY21 outturn, subject to overall market conditions

-- In addition to proposing a final dividend for FY20, moving forward the Board remains committed to its stated dividend policy of a payout ratio of up to 70% of Adjusted Profit after Tax.

For further information

DWF Group plc

   James Igoe - Head of Communications                  [phone] 

Finsbury (PR advisers to DWF)

   Ed Simpkins                                                                [phone] 

Charles O'Brien

About DWF

DWF is a global legal business providing Complex, Managed and Connected Services, operating from 31 key locations with more than 4,200 people. The Company became the first Main Market Premium Listed legal business on the London Stock Exchange in March 2019. For more information visit: dwfgroup.com

Forward looking statements

This announcement contains certain forward-looking statements with respect to the Company's current targets, expectations and projections about future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan" "estimate", "expect" and words of similar meaning, include all matters that are not historical facts and reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement.

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September 08, 2020 02:00 ET (06:00 GMT)