Knights Share Discussion Threads

[acropolis1728] 20/8/2020 11:08

d40eq6

Totally agree that the model is different save that they both see growth by acquisition as key aim but one of course has an international footprint. Also agree that no sensible 'read across" is possible. The point though is the complete lack of transparency on the effect of covid on Q1 by sector in its results which they must have known. They airily point to an uptick in disputes and insolvencies (but the law has changed on the latter for the time being. The acquisitions done in the past couple of years have PBTs of between 10 and 20%. Thats tight. All were expected to be cash generating in their first year and I cant see where that is confirmed in their results.

I have no skin in the game and time will tell. But for me the shares are defying gravity.

[d40eq6] 19/8/2020 18:28

The model of KGH is different to INCE. Their respective financial statuses are not comparable. The markets they operate in are radically different. The locations of their offices are totally different. You simply cannot do any sensible read across between these two firms.

[acropolis1728] 19/8/2020 15:16

But whoever is buying is clearly not on this site. It is so devoid of comment and empty that my posts are almost creating an echo.

[acropolis1728] 19/8/2020 15:14

tradertrev - I agree. This only came onto my radar because people were using it as a benchmark to measure Ince's position saying the latter were undervalued compared to this. Ince really gave up some detail in their Final Results on sectors, percentages and were pretty forthcoming in their analysis. They are being punished for it in the sense that I think they expected a bump in the share price. Yet KGH sails on serenely. It may well see an up tick in work going into Q3 but what has happened in Q1 and Q2 will define the year. Very difficult to make up the time that was lost. The firm are offering nothing on that at all. I find it very difficult to think that a UK based firm with the profile this has, has not seen a reduction in work and pressure on receivables. All firms focus on lock up but if people stop paying because of their own cash flow issues then lock up will slip.

[tradertrev] 17/8/2020 18:05

The company has fantastic financial PR.
Just my opinion but the last trading statement was wonderfully obfuscating. Some weak areas, some good, nothing about the relative importance/size of them, bland positive comments about general matters that aren't at all related to current trading.

[saucepan] 17/8/2020 17:28

acropolis1728, I don't know whether this helps:

Investors Chronicle printed a piece on 22 July, under the heading "Knights forges ahead despite Covid-19". Its summary view was as follows:

"While weaker economic conditions will see some practice areas suffer, Knights expects higher demand for litigation and insolvency services in the months ahead. This crisis will also likely throw up attractive M&A opportunities and aid recruitment as lawyers shy away from the financial risk of buying into a partnership. Tight control of ‘lock-up days’ – the time taken to be paid for completed work – means cash generation should remain resilient. Buy."

No advice intended on my part.

[acropolis1728] 17/8/2020 17:21

Am still bemused by the continuous rise in this.

Sorry I havent got anything more sophisticated to add but is this largely provincial firm really not affected by Covid?

[saucepan] 12/8/2020 21:05

Cheers. Good luck, however you play things.

[acropolis1728] 12/8/2020 20:53

Saucepan....eyesight issues. Not sure where I got the 60p from.

[saucepan] 12/8/2020 18:03

Let's agree to differ then. By the way, 20p drop in the last hour; not 60p.

[acropolis1728] 12/8/2020 17:22

"As a result, the Board believes it would not be appropriate to provide forward looking financial guidance to investors and analysts at this time. However, whilst the market remains uncertain, we are encouraged that early signs of a recovery in instructions indicate an initial improvement in market conditions compared with the disruption experienced at the beginning of April."

I think that is a cop out given they must have had a real idea on the impact on Q1. I am mindful that comparisons are drawn between this and Ince but the latter got hammered I think for their open approach.

Why did the share price plummet by 60 p in the last hour of trading?

[saucepan] 12/8/2020 17:06

acropolis1728

In view of your comment, I have just checked back on Full Year Results posted on 22 July.

To my mind, the Company makes a clear statement regarding Corona virus under a "Covid 19" sub-heading.

Further clarification is also provided under "Current Trading and Outlook".

CEO David Beech concludes by saying: "Beyond the near term, we anticipate that COVID-19 will only accentuate the recruitment and acquisition opportunities for our resilient, well-invested, diversified and cash generative business in the highly fragmented and often under-invested market for legal services outside London."

With a Slater PEG of just 0.37, I personally think the rise in the share price is more than justified and that there should be further to come. No advice intended, however.

[acropolis1728] 12/8/2020 16:07

I don't get the continuous increase in the price given the profile of the firm's core business. UK based but outside London and comprises a number of disparate firms working for key commercial clients like Rolls Royce who are shedding jobs left right and centre. Unlike other law firms they deliberately made no comment on the effect of covid on their business in their results even through they cut salaries and stopped discretionary spend. Are they saying that business and collections have remained completely unaffected? Something not quite right here.

[tongosti] 23/7/2020 10:17

Still waiting but do not think the odds are high I open up a position yet. Volumes have done a Lord Lucan. Happy to sit it all out and wait patiently.

[tongosti] 22/7/2020 09:44

About to initiate - just waiting for increased volumes before I pull the trigger. Today hopefully...

[saucepan] 22/7/2020 08:47

Solid results today, which the market is slowly waking up to?

KGH seems to be rather off the private investor radar, judging by the lack of posts here.

[d40eq6] 21/5/2020 08:19

Only a portion of their revenues come from transactional work.

[tjbird] 21/5/2020 07:49

Profit warning. short term disruption to the Group’s ability to transact on behalf of its clients

[d40eq6] 19/5/2020 23:14

Results on Thursday....

[glenowen] 10/3/2020 12:20

Am I missing something with these notifications of directors’ transactions? There were share acquisitions/disposals by directors yesterday - 9 March. Where on the official notice does it state whether these were buys or sells? An official notification is pretty much useless without that basic information!

[capitalist] 06/3/2020 16:23

I have noted a few of my stocks are starting to report a major investor increasing their holdings in this market correction.
In the case of KGH, it is Merian who has gone from 8.78% to 10.04%.
I guess it's a buying opportunity for some.

[dplewis1] 15/2/2020 21:04

Be warned - entropick is a spam account do not click the link.

[entropick] 15/2/2020 20:59

Knights on an acquisitions charge