DSW Capital, a profitable, fast growing, mid-market, challenger professional services licence network and owner of the Dow Schofield Watts brand, is pleased to announce its half year results for the six-month period ended 30 September 2022 (“H1 23” or the “Period”).
The Group has delivered a strong performance in the Period with network revenue rising to £9.8m, up 34.5% compared to the same period in the prior year (H1 22: £7.3m), and is currently on track to deliver results for the year ended 31 March 2023 (“FY23”) in line with market expectations.
Financial highlights
| · | Network Revenue up 34.5% at £9.8m (H1 22: £7.3m) |
| · | Total income from licensees up 40.4% at £1.6m (H1 22: £1.2m) |
| · | Adjusted Pre-Tax Profit £0.9m (H1 22: £0.8m) |
| · | Statutory Profit before tax £0.6m (H1 22: £0.7m) |
| · | Strong operating cash conversion of 85.1% with £4.6m cash at period end |
| · | Strong balance sheet with Net Assets of £7.8m (H1 22: £2.7m) |
| · | Interim dividend of 1.76p per share |
Operational highlights
| · | Fee Earners at the Period end increased to 93 (HY 22: 81), up 14.8% YoY, demonstrating the attractiveness of the licence model and the network’s heightened profile following IPO, which are negating wider challenges in the recruitment market |
| · | Presence in Scotland expanded with two new offices, Edinburgh and Glasgow, and three new partners |
| · | Additional partner welcomed to the Wealth Planning service line post Period end in October 2022 |
| · | The Group has also entered into a commercial support arrangement with Freelands Finance Ltd, an Investor Relations Advisory business. Working in collaboration with this business is expected to provide a source of referral opportunities to the DSW Network |
| · | Named by Experian* as the 10th most active corporate finance adviser in the UK in the first half of 2022, compared to 13th in the first half of 2021 |
| · | Shortlisted for a number of awards, including ‘Best Newcomer Award’ at the AIM Awards 2022 and ‘Flotation of the Year’ at the Insider North West Dealmakers Awards 2022 |
Current trading and outlook
| · | Demand for the DSW Network’s services, which are primarily SME focused, remains strong and the Business Recovery team is continuing to see an increase in activity |
| · | Fee Earners at 31 October 2022 increased to 97, as teams continue to recruit high calibre candidates |
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Opportunity for organic and acquisition driven growth remains significant and the Directors remain confident in the strength and resilience of the Group’s business model |
| · | Currently on track to meet market expectations for FY23 |
* Experian Market IQ: H1 2022 Report
James Dow, Chief Executive Officer, said:
“Activity in the Network’s primary market, the SME sector, has remained strong to date and resilient to the many economic challenges facing the UK. Whilst a downturn is likely to affect corporate finance and transaction services within the Network, we would expect some of that to be offset by an increase in the demand for insolvency, restructuring, and debt advisory services, for which we are already seeing strong demand as corporate distress levels rise.
We continue to seek to grow the Group through diversification with the addition and expansion of new service lines and to recruit professionals in other disciplines to reduce the M&A weighting of our licence fees.”
