Knights has produced a strong debut financial year following its AIM listing, with acquisitions and organic growth propelling the firm to more than £50m in turnover.
Turnover at the company was up 51% to £52.7m, slightly ahead of expectations the company flagged in May, including 15% organic growth. Revenue per fee earner was up 22% to £131,000, with a net 46 increase in fee earners over the year, while net debt fell to £14.1m from £26.3m.
The firm’s listing last June provided Knights with a £28.1m war chest, resourcing the law company for four acquisitions in the last year while underlying legal work and financial discipline was said to have led to the double-digit organic growth.
‘The organic growth is driven by smarter business,’ Knights chief executive David Beech (pictured) told Legal Business. ‘We’re training fee-earners on financial management and client engagement. Coaching them on how to recover their time is not something that’s taught in law school.’
Inorganic growth came courtesy of a flurry of acquisitions from June 2018, first absorbing Manchester-based firm Turner Parkinson, while in October of last year Knights acquired Leicester’s largest law firm, Spearing Waite, in an £8.5m deal. The company’s most recent move was a £1.5m buy in January for Leicester-based employment specialist Cummins Solicitors, which counted five fee-earners and £784,000 in revenue.
The company also announced today (9 July) it had extended its rolling £27m credit facility until 25 June 2023, with future buyouts in the pipeline. Beech said the ideal acquisition size would be a firm of four or five partners with up to £10m in revenue.
‘You’ll see up to four acquisitions,’ Beech commented. ‘The IPO has enabled us to be choosy about what to go for next, but we’ve got great momentum.’
Beech added that while the money raised at IPO had obviously been beneficial in securing acquisitions, the company was still getting used to life on the public markets.
‘We’re learning to deal with the processes that come from being a listed company,’ he said. ‘Dealing with half-year results and things requires support and time and can sometimes take you away from the business.’
Listed law firm results have so far been strong: Rosenblatt’s revenue rose 19%, Keystone added 35% to its top-line, while Gateley flagged that its revenue would be at least £102m this year. The market’s most recent listing, DWF, reports its full-year financial results at the end of this month.