DWF Group plc (LON:DWF), the global legal business, has announced a trading update for the first quarter of FY21.
| Unaudited* | Unaudited* | Unaudited* | |
| £m | FY21 Q1 | FY20 Q1 | Change |
| Net revenue | 84.3 | 70.1 | 20.3% |
| Gross profit | 41.5 | 35.4 | 17.2% |
| Gross profit margin (%) | 49.2% | 50.5% | -1.3 ppts |
| Underlying adjusted EBITDA | 9.7 | 4.0 | 144.7% |
| Underlying adjusted PBT | 7.4 | 2.2 | 231.4% |
| Reported PBT | -0.6 | 1.9 | -133.9% |
| Net debt (excluding IFRS 16) | (55.2) | (48.3) | 14.3% |
*Source: July 2020 Management Accounts
FY21 TRADING UPDATE
· Strong trading for the first three months of FY21 with revenue of £84.3m reflecting growth of 20% and Underlying adjusted EBITDA of £9.7m reflecting growth of 145% vs. prior year.
· Organic revenue growth of 5% yoy and total revenue growth of 20% reflecting the contribution from the acquisitions of RCD in Spain and Mindcrest
- Previously announced cost savings of £15m in FY21 are taking effect and are reflected in the significant uplift in EBITDA versus prior year, with cost to income ratio trending at 38% compared to 45% in the prior year
- Disposed, closed or reduced scale of operations in Cologne, Dubai, Singapore and Brussels with further measures taken post year-end to rationalise underperforming units
· Net debt of £55.2m reflecting a £9.7m reduction on the April 20 position and reflecting free cash flow generation of £18.5m for the first three months of the year
· Lock up days reduced from 206 at April 2020 to 200 at the end of Q1 reflecting trading conditions returning to normal
· Significant bid activity and new contract win with multinational insurance company, Aviva
· Our Net Promoter Score with key clients is very positive at 50, and 47 overall, based on 403 clients providing feedback
· Strong pipeline of opportunities including Managed Services bid activity supports optimism for the FY21 outturn, subject to overall market conditions
· In addition to proposing a final dividend for FY20, moving forward the Board remains committed to its stated dividend policy of a payout ratio of up to 70% of Adjusted Profit after Tax.
