Revenue growth and cost control in a challenging environment
- The Group expects to report:
- net revenue of c£380m (unaudited) reflecting growth of more than 8%
- lock-up days at c190 days on a like-for-like basis(1) (FY22: 179 days) in line with the half year position reflecting the expected stabilisation after the H1 increase
- Highly confident in medium term guidance provided in July 2021, underpinned by the cost programme which is now expected to remove in excess of £15m of cost by end of FY24 (versus £10-12m reported in December 2022), helping to protect the business from broader inflationary cost pressures
The Group continued to enjoy strong activity levels in the year, delivering revenue growth of more than 8%. The transaction with Whitelaw Twining in December 2022 boosted growth in a first-of-its-kind transaction for North America, with the launch of a legal services offering in Toronto following within 2 months of completion. Underlying organic growth for the Group is expected to be 5%.
Whilst FY23 has enjoyed a greater degree of stability and normality compared to the Covid-impacted prior periods, the H2 performance is notable due to the acceleration in growth with 12% yoy revenue growth in Q3 and c14% in Q4. This reflects the impact of the Group's Integrated Legal Management strategy and ongoing key client focus, delivering integrated solutions to more Group clients.
During H2 we have started to benefit from the impact of the cost programmes tackling both direct and indirect costs, although most of the benefit is expected to be seen in FY24 and beyond.
The Board are pleased with DWF’s progress on revenue and costs in the context of prevailing economic conditions and interest rate rises, and believes that the performance compares favourably with the wider legal sector. Working capital has stabilised as predicted at the half year, with lock-up days in line with October 22 and expected to reduce in the near term.
Sir Nigel Knowles, Chief Executive Officer, said: "Our performance continues to show how robust a business we are, even in a challenging environment. We have delivered consistently strong revenue growth and underlying organic growth, with the initial benefits of our cost control programme also coming through. Our transaction in Canada has also given us great momentum in North America, which is a geography that continues to be of high importance to our future growth story. In combination, this gives us a high degree of optimism as we begin FY24."
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
The person responsible for making this announcement on behalf of the Company is Chris Stefani, Group Chief Financial Officer.
For further information:
DWF Group plc
James Igoe +44(0)7971 783533
Head of Communications & IR
Sam Turvey +44(0)20 7379 5151
(1) To enable a like-for-like comparison, the FY23 lock-up figure excludes Whitelaw Twining