Keystone Law Share Discussion Threads

[tkamp] 21/1/2019 08:08

Happy to see Keystone is still continuing to grow at such high rates. The stock is priced for much lower growth that it's currently achieving so this growth is really just a bonus on top of the already sound investment case. I'm particularly interested to see where margins have gone.

[brokenbuckles] 21/1/2019 07:30

Great results.

[mrnumpty] 03/1/2019 21:11

Brokenbuckles and tkamp . I've only just checked the chat site for Keystone . Thank you both for your informed and helpful comments . Also , in a world where there are far too many unpleasant comments on the web , I really appreciate the civility of your comments . I am moving nearer to investing here , but watching the price . After the beginning of stock market misery a couple of months ago , I see law as an area which should be insulated from instability in the economy . I also like Anexo ( as I wrote , I have a small holding there ) , butAnexo floated not long ago so
I shall probably invest any law-related cash in to Keystone ( longer trading history , and also some spreading of risk ) . Anyway , thanks again for your comments and good luck with your investments .

[tkamp] 02/1/2019 13:06

I agree with Brokenbuckles. Is this a business with the widest moat ever? No, but it surely isn't very easy to set up something of similar scale. There's a reason it took KEYS a decade to build a scale-level business. As brokenbuckles rightly points out it is very difficult for established firms to emulate KEYS' pay-outs. Even American firms where 'kill what you eat' is the standard don't nearly pay out the ~70-75% that KEYS pays out to its partners.

[brokenbuckles] 02/1/2019 10:44

Plus I like the fact they did £20m profit in H1, the broker has £40m profit for the FY, and they have hired more lawyers (310 at my last count). So cant see how they miss numbers.

[brokenbuckles] 02/1/2019 10:02

Many would argue that Burford's model was not 'unique' - they simply fund litigation, anyone with capital can do it (but we need not get into that debate here). I would suggest the barriers to entry are higher here. The biggest challenge for a new entrant is building scale; it is hard to see why any lawyer, which has made the decision to work basically for themselves, would decide to go to a sub-scale entrant (the risks are higher, and the rewards are lower). A new entrant would need scale to adequately invest in real estate and compliance / systems. Look how long it took Keystone to build up it network of lawyers. As Keystone scales, it should become easier not harder to recruit new lawyers (and higher quality lawyers). It is a fair question though why can't existing firms copy the model? Well it is about a lower cost base. My friend at a law firm says they get paid about 10% of the fee they bring in, at Keystone it is about 70%. How can a law firm adapt their model and pay so much more to their lawyers without going bankrupt? As always it is also harder for an incumbent to disrupt than a new entrant.

[mrnumpty] 25/12/2018 07:43

Neither a " tamper " nor a " ramper " . Predictive texting !!!

[mrnumpty] 25/12/2018 07:39

I've been watching this from the sidelines . I , too , did well with Burford but also sold out too soon . However , firstly it scarcely needs to be said that Keystone's business model is totally different to that of Burgord . Furthermore , whilst Burford seems to have established a dominant role in the field of funding of legal cases , and Keystone is based on a new way of running a law firm , I cannot see how Keystone's model is unique . In other words , what is to prevent other law firms from adopting the same organisational principle which lies at the heart of Keystone ? There cannot be any patents to ensure that their business model is protected . I shall watch and , when the share price appears to stabilise , I may well buy in , but my concern about lack of protection against competitors adopting their business model remains . After my profits from Burford ( watching them too - - possible they might be moved in to FTSE 100 ? ) , I love law firms , especially in the current miserable state of stock markets . Another law firm in which I already have a small stake is Anexo , which specialises in motor vehicle insurance claims . Despite all the above , I am NOT a tamper , either up or down - I hate them as much as any one else . Good luck with all your investments . Let's hope that markets soon stabilise , and do your own research .

[tkamp] 25/10/2018 17:48

I also did a quick check on Keypoint, the Australian subsidiary in which Keystone has a 14% stake + a licensing agreement. The 14% stake is on Keystone's balance sheet for only GBP14k (valued at cost).

Keypoint is still much smaller than Keystone (~35 lawyers vs. ~275 for Keystone) which is likely to be the result of the fact that (1) Keypoint only launched in 2014, more than a decade after Keystone, (2) The total Australian legal market is likely to be only 25-40% the size of the UK due to its economy being roughly half the UK's size and the UK having a very international legal market.

However, Keypoint is at this stage growing much faster than Keystone, with lawyer numbers up 45% in its most recent reporting (revenue growth is likely to be higher than this, as has been the case for Keystone too). That is a growth rate that even Keystone itself has never managed to obtain in the last 5 years (although they may have in their very early years).

Given that Keystone's current value is >GBP100mn and making some adjustments for the reduced Australian market size, the lower maturity of the business, but the higher growth then maybe Keypoint would be worth GBP30-40mn, of which Keystone owns 14%. That is equivalent to roughly GBP4-5mn. Together to the ~GBP5mn of net cash on Keystone's balance sheet that is close to 10mn of non-operating net assets, which is quite substantial for a 100mn company.

Clearly if Keypoint keeps up the recent growth trajectory its value is going to increase further.

[tkamp] 22/10/2018 14:01

I checked with a friend of mine who works for one of the UK's top law firms and he confirmed that a model like that of Keystone is likely to be very attractive for a lot of lawyers. He too mentioned that there is a greater incentive to write more hours if you get to 'eat what you kill'. Hence it seems credible that Kestone's growth is coming from two sources, namely attracting new partners who take existing clients with them, and existing partners growing their business within Keystone.

MartyWidget's interview with the CEO reveals this very interesting comment from the CEO about international expansion. I imagine this would be a great long-term growth opportunity if the company deems it realistic to make this push. E.g. entering the US market would greatly expand its addressable market.

[martywidget] 05/10/2018 12:08

‘I couldn’t find a service I needed so I decided to offer it myself’, says CEO of Keystone Law
October 4, 2018 at 11:55 am

[rosejs2] 29/9/2018 17:24

IC View
The last IC recommendation on Keystone Law Group PLC shares was Buy at 365.00 on 26 Sep 2018

[martywidget] 28/9/2018 11:24

Well, the share price is certainly pushing onwards & upwards - An excellent performance in shareprice since the pleasing interim results.

Here's the Powerpoint Presentation of Interim Results Investor Presentation, with the bar charts, pie charts, data, etc for anyone that hasn't seen it:

[nw99] 25/9/2018 12:14

Great scsw tip

[gorilla36] 25/9/2018 08:27

Great set of results, hopefully we can push on from here!

[wingrove4] 25/9/2018 08:26

Good st of results, am I the only person interested in KEYS.

[4wingrove] 10/8/2018 17:03

A good opportunity to top up on this company. Bought some more this afternoon

[chartsworth] 07/8/2018 13:53

Better late than never but yes looking at these guys now with a view to buy...

[wingrove4] 17/7/2018 08:22

Is anyone else interested in this share it has performed very well since floating

[martywidget] 18/6/2018 10:45

Windfall for partners in law firm’s £1bn flotation
£10m payday as DWF plans biggest legal float ever



Statement regarding potential IPO



Friday 15 June 2018 5:14pm
DWF latest law firm to catch flotation bug with £1bn IPO

[martywidget] 05/6/2018 16:24

From yesterday:

Knights joins UK law firms heading to the stock market
Regional group is fifth in UK to list as partnership model begins to look outdated

A fifth UK law firm is to float on the London Stock Exchange as signs grow that momentum for IPOs is building in a sector that has clung to a partnership model for centuries.




Knights Professional Services Ltd
04 June 2018
Intention to Float
Released 07:00 04-Jun-2018

[martywidget] 25/5/2018 12:59

Thanks for that, here's the link:

Tips of the Week yesterday
Keystone: the flexible future of law

[nimbo1] 25/5/2018 12:47

I/C tip of the week

[bristolwest] 20/5/2018 22:18

Thanks for taking the time minions01, I'll probably stick to investing more into funds and trusts from here on!

[monions01] 08/5/2018 09:35

When looking at things like HL, or any other site that shows trades, it's best to think of it in a different way.

All sites show a trade with a 'guess' as to wether it is a Buy or Sell. If the price of the trade is closer to the 'BID' price it will be shown as a SELL. If closer to the 'ASK' price it will be shown as a 'BUY'. There is no 'buy' or 'sell' information in the trade data as all buys are sells as well. So this is always a guess by the site/service. For this reason there will not be a matching 'sell' trade to a 'buy' trade - there was only one trade.

So when looking at the trades, it's best to simply look at a trade as a single trade - one person selling, one person buying at a particular price.

Also, it's worth remembering that not all trades execute at the 'Bid' or 'Offer' prices. Some trades can be negotiated broker to broker. And often the 'Bid/Offer' prices are just what the market makers are showing - trades often execute within that spread. Additionally, some people can use Direct Market Access (DMA) where they put their orders directly on the order book - this enables them to buy stock at the bid price - these are shown as sells as they are at the bid price.

As you can see there are many ways trades happen, and they can't all be shown correctly as buys or sells.

Sorry for the longwinded reply, and if that has complicated things. It took me a while to get my head around this.