Shares of Manchester-headquartered international law firm DWF Group plc fell about 18% on Friday after it published a trading update amid the coronavirus crisis saying revenue growth will be “below management’s previous expectations” and that it expects a “material impact’ on full-year profits.

DWF also said its board “believes it prudent to seek additional contingency facilities from its lenders to ensure that the group has increased headroom for working capital purposes and a relaxation of certain covenants for a period of time.”

The law firm said it “has a strong relationship with its lenders and has had positive initial discussions, which are ongoing.”

In a stock exchange statement, DWF said: “Whilst the group has, to date, shown strong revenue growth year on year, the final quarter of each financial year is typically the most important to the group’s financial performance, and has coincided with the COVID-19 outbreak in the group’s key markets.

“As a consequence, the board now estimates that group revenue for the financial year ending 30 April 2020 (FY20) as compared to the prior financial year (FY19) will show high single-digit organic growth and total growth of between 15% and 20%, which is below management’s previous expectations.

“Although the group continues to expect double-digit percentage growth in underlying adjusted PBT (profit before tax) this year, it expects a material impact on the expected FY20 profits due to lower than expected revenue and the level of investment made during the year to grow the platform.  

“The group has already implemented cost savings during the course of the year and has accelerated its cost saving programme which is expected to deliver c.£10m in cash savings during FY21 and annualised savings of £13.5m in FY22.

“The payment of any final dividend for FY20 will be determined later in the year once the group’s financial results for FY20 are known and have been considered by the board …

“As the group expects that it will generate lower than anticipated profits in FY20 it also expects net debt at the year-end to be higher than anticipated.

“The group is very focused on working capital management and cash collections, however management anticipate that the current business environment will slow collections.

“Management is confident that the group has sufficient liquidity to deal with current working capital requirements.

“The group has a Revolving Credit Facility with HSBC, NatWest and Lloyds of £80m and currently expects to continue to operate within the limits of that facility. 

“Notwithstanding that expectation, the board believes it prudent to seek additional contingency facilities from its lenders to ensure that the group has increased headroom for working capital purposes and a relaxation of certain covenants for a period of time.

“The group has a strong relationship with its lenders and has had positive initial discussions, which are ongoing.”