22 March 2022

Knights Group Holdings plc

("Knights", the "Company" or the "Group")

Trading Update

Knights today provides a trading update for the full year ending 30 April 2022.

The Group typically has a strong second half, particularly in the fourth quarter, so had anticipated substantial growth following a good first half in which the Group grew organically by 9%.   

However, a continuation of the impact of Omicron and recent macro conditions have slowed growth to a greater extent than anticipated.  The persistent effects of Omicron across the country have meant, in particular, greater illness rates amongst our people, resulting in the business not benefitting from a faster return to office working and the consequent advantages of our team-based culture. We have also seen a softening in business confidence, possibly due to concerns around the strength of the economy, such that there has been a slowdown in corporate work.

This confluence of events has meant that, whilst we have recently seen increasing activity rates, these are lower than management's expectations.  The Group is now expected to deliver revenue of c.£126m and underlying PBT of c.£18m for the year ending 30 April 2022.   The Group has not seen any significant losses of clients or fee earners.

Given the current uncertainty regarding both the economic conditions and the speed of transitioning people more fully back into offices, it is now prudent to anticipate organic growth of c.5% for the year ending 30 April 2023, with margins rebuilding to historic levels over time.

Cash conversion remains robust, with industry leading lock-up and debtor days reflecting the strong discipline of day-to-day cash collection across the Group.

David Beech, CEO of Knights, commented:

"Following a good first half, it is frustrating that recent events have held the business back from delivering a stronger performance in the second half.

"Beyond this near-term uncertainty, the opportunity to cement our leading position in key legal services markets outside London remains substantial and we are as well placed as ever to deliver on that opportunity."

Knights will provide a further update on trading for the full year ending 30 April 2022 in May 2022.

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Notes to Editors

Knights is a fast-growing, legal and professional services business, ranked within the UK's top 50 largest law firms by revenue. Knights was one of the first law firms in the UK to move from the traditional partnership model to a corporate structure in 2012 and has since grown rapidly. Knights has specialists in all key areas of corporate and commercial law so that it can offer end-to-end support to businesses of all sizes and in all sectors. It is focussed on key UK markets outside London and currently operates from 17 offices located in Birmingham, Cheltenham, Chester, Crawley, Exeter, Leeds, Leicester, Maidstone, Manchester, Nottingham, Oxford, Sheffield, Stoke, Teesside, Weybridge, Wilmslow and York.