Half Year Results for the six months ended 31 October 2023

We are pleased to announce our unaudited results for the six months ended 31 October 2023 (the “Period” or “H1 24”).

Financial highlights

• Resilient financial performance with revenue and underlying profit before tax up 7.6% (H1 23: 22.2%) and 4.6% (H1 23: 9.6%) respectively, against a challenging macro-economic backdrop
• Group organic revenue growth of 5.1% (H1 23: 9.8%)
• Legal services revenue grew entirely organically by 2.4% (H1 23: 8.2%)
• Revenue from consultancy services represents 27.6% of total revenue at £22.6m (H1 23: £18.2m or 23.9%), of which organic growth was 13.5% (H1 23: 20.0%)
• Underlying profit margin decreased to 12.2% (H1 23: 12.6%) as a result of investment in future growth including a 3.5% increase in fee earners, improved technology and continued M&A
• Activity levels across the Group decreased with utilisation at 83% (H1 23: 86%)
• Strong balance sheet with net debt of £2.2m at the Period end (H1 23: net cash £1.1m)
• Proposed interim dividend maintained at 3.3p (H1 23: 3.3p) per share

¹ Underlying operating profit and underlying profit before tax excludes remuneration for post-combination services, gain on bargain purchase, share-based payment charges, acquisition related amortisation and exceptional items
² Underlying diluted EPS excludes remuneration for post-combination services, gain on bargain purchase, share-based payment charges, acquisition related amortisation and exceptional items. It also adjusts for the future weighted average number of expected unissued shares from granted but unexercised share options in issue based on a share price at the end of the financial year
³ Net (debt)/ cash excludes IFRS 16 lease liabilities

Strategic and post-Period highlights

• Prior year acquisitions integrated and performing well
• Ongoing investment in capacity with average fee earner headcount increased to 1,035 in H1 24 (H1 23: 1,000)
• Strategic hiring onto Business Services Platform to seed legal services class action and international arbitration teams and to create intellectual property commercialisation and valuation in patent and trade mark attorney services
• Continued execution of M&A strategy with the July 2023 acquisition of Richard Julian and Associates Limited (“RJA”), a chartered surveying practice providing quantity surveying and project management services across a variety of construction sectors and performing in-line with expectations
• Achieved all 15 responsible business objectives set in our 2022/23 Responsible Business Report and launched 15 new objectives in our third annual Responsible Business Report
• Continued focus on alignment of stakeholders including through 70% of staff either owning shares or currently participating in option schemes
• Succession planning progressed with the appointment of David Wilton as Chair Designate and Non-Executive Director, with effect from 1 February 2024

Current trading and outlook

• H1 24 outturn demonstrates the resilience derived from our ongoing investment in a diverse range of professional services businesses
• After activity levels increased in Q2 24, Q3 to date has been more subdued, particularly for some of our legal services transactional teams. However, counter cyclical work activity continues to strengthen and consultancy services are performing strongly
• The combination of ongoing macro-uncertainty, varying activity levels across the Group and the natural weighting towards the final months of the financial year makes the Group’s full year outturn more difficult than usual to forecast. However, with the solid results delivered at the half year point, tempered by a cautious short-term outlook, the board expects results for the full year to be broadly in line with market consensus