DWF, Manchester law giant, flags £380m net revenue

Shares of Manchester-headquartered international law firm DWF Group plc rose about 5% as it published a trading update for its financial year ended April 30, 2023, (FY23) saying it expects to report net revenue of £380 million, reflecting growth of more than 8%.

“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 …” said DWF.

“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.”

DWF CEO Nigel Knowles 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.”