DWF Group A transformational year – revenue and adjusted profit growth, and strong cash generation

DWF Group

DWF Group plc (LON:DWF), the global legal business, today announced its full-year results for the year ended 30 April 2021. The Board is delighted with the Group’s performance in FY2020/21 reflecting a more focussed delivery of the strategy, greater operating discipline, a significant adjusted profit improvement and a robust balance sheet.


£m (unless otherwise stated)FY2020/21FY2019/20Change
Net revenue1338.1297.214%
Gross profit171.8142.221%
Gross profit margin250.8%47.9%2.9ppts
Cost to income ratio339.2%41.4%(2.2)ppts
Adjusted EBITDA458.136.957%
Operating (loss) / profit(25.6)22.2(47.8)
Adjusted profit before tax (‘Adjusted PBT’)534.215.2125%
(Loss) / profit before tax (‘PBT’)(30.6)18.2(48.8)
Adjusted diluted EPS (pence)
Diluted EPS (pence)(11.9)3.7(15.6)
Gross lock-up days718620620
Free cash flow832.1(6.6)38.7
Net debt960.264.9(4.7)


·    Group net revenue growth of 14% (8% organic)10 to £338.1m at a gross margin of 50.8%.

o  3% growth in Commercial Services, with 10% year on year growth in H2

o  3% growth in Insurance Services division

o  33% growth in International, including full-year net revenue of £33.5m from the RCD acquisition in Spain

o  22% growth in Connected Services, all organic

o  Managed Services (Mindcrest) division contributes £13m of net revenue.

·    Adjusted PBT up 125% to £34.2m, reflecting top line growth, gross margin improvement and operating leverage coming through with an improvement in the cost to income ratio as the Group implemented cost reduction initiatives announced during the year.

·    Reported PBT is a loss of £30.6m, which differs to Adjusted PBT due to significant, largely non-cash, acquisition and closure/scale back related expenses treated as non-underlying items.

·    £32.1m free cash flow generated in FY2020/21 versus an outflow of £6.6m in the prior year.

·    Net debt of £60.2m is £4.7m lower than FY2019/20, despite deferred consideration and acquisition-related outflows of £17m, and assisted by c.£11m of COVID-19 related Vat deferrals.

·      A 20-day (10%) reduction in lock-up days versus FY2019/20 position reflecting Group-wide initiatives to improve working capital efficiency.

·      Cost to income ratio improved by 2.2ppts versus FY2019/20 to 39.2%, continuing the downward trend and demonstrating the impact of cost control measures.

·      Net revenue per partner11 increased by 18% to £924k.


·      Decisive action taken in FY2020/21 and new operating structure from FY22 provides a platform for sustainable, profitable growth.

·      New three division operating model, effective 1 May 2021, and the Group’s focus on a one-team culture and global mind-set already leading to a greater sharing of clients across practice areas and borders. 

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·      An increasing number of our clients now receive services from two or more of Legal Advisory, Connected and Mindcrest, representing a significant growth opportunity.

·      Investment in new Pune, India office to increase headcount capacity to c.1,000 from c.500 to support Mindcrest (Managed Services) build.

·      Recent key blue-chip wins include Allianz and LV=


·      Trading performance throughout FY2020/21 has been resilient, with minimal impact from ongoing COVID-19 restrictions.  

·      The first two months of trading for FY22 have been strong, showing continued organic net revenue growth and gross margin development.

·      As restrictions continue to ease, we expect a favourable trading environment for FY22 and for our approach to integrated legal management to continue to expand existing client relationships and secure new client wins. 

·      Whilst there is upward cost pressure due to competition for talent in a buoyant legal sector, the removal of material drag factors (i.e. closures and scale-backs in FY21) is expected to support continued growth in net profitability.

·      For FY2020/21, as previously announced, the Board has declared a final dividend of 3.0p per share, taking the total dividend for the year to 4.5p, reflecting a pay-out ratio of 61% of adjusted profit after tax.  This pay-out ratio is viewed as a meaningful step towards the target of up to 70%.

·      Guidance has been reinstated with the following targets being set:

o  For the medium term:

§ Net revenue growth CAGR of between 6% and 7%

§ Gross margin increase to between 53% and 54%

§ Cost to income ratio (including depreciation) target of 38%

§ Lock-up days of 170

§ Leverage of 0.5 to 1 times pre-IFRS 16 EBITDA

o  For FY22 specifically:

§ Capex of up to £8m

§ Interest expense of c.£5.0m (including c.£2.5m of interest on leases under IFRS 16)

§ Depreciation c.£20m (including c.£12m of depreciation for right-of-use asset under IFRS 16)

Sir Nigel Knowles, DWF Group Chief Executive Officer, commented:

“FY2020/21 was a transformational year for DWF and I am delighted that the tremendous resilience, dedication and excellence of our colleagues has been rewarded with these strong results. The results reflect a return to pre-COVID-19 activity levels, but they also evidence the importance of the decisive actions we took throughout the year as we focused on driving greater operational efficiency, profitability and strategic alignment.

“I am especially pleased to see revenue and gross profit margin growth in every division of the Group. This demonstrates the strengths we have right across the business, the broad appeal of our offerings in their own right, and how these can be even more powerful when combined through our differentiated Integrated Legal Management approach.

“We have now implemented our new global operating structure to streamline the Group into three global divisions of Legal Advisory, Mindcrest and Connected Services. We believe this is an important step forward in our strategy and will help us to fulfil our vision of becoming the leading global provider of integrated legal and business services. “

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