Knights Group . Share Price (KGH)

Good note. Solid results. Beat on cash impressive. We await news on Moore Barlow. They probably have £40-60m firepower to deploy. Will be upgrades on the deal for sure.

Question - with interest rates going up, will they actually earn more on client monies this year? The bears were pointing to this last year as a drag on earnings given interest rates were coming down. But seems it might be a boon for them and will drop straight through to the bottom line and cash.

I think 8-10x PE rating for target price is fair, but should be higher if they can deliver sustained organic growth.

I've recently taken a small position in GTLY as I think it's also a high quality company in the space going for a very cheap price...

New research from Equity Development this morning, summary of key points below:

High quality growth: FY26 trading confirms Knights’ increasing scale advantages as a premium regional consolidator, with revenue up 28% to c.£207m, c.3% ahead of expectations, driven by a sharp acceleration to double digit organic growth in H2.

Profitable momentum: Adj. EBITDA is set to rise 19% to c.£51m, with margins sustained at c.25% despite NI cost headwinds and ongoing AI investment, while Adj. PBT is expected to increase 18% to c.£33m, slightly ahead of forecasts.

Cash discipline: Working capital improved again, with debtor days reduced to 30, supporting strong cash conversion and a better than expected net debt position of c.£65.4m, despite £17m of acquisition spend.

Rerating potential: Trading on only c.5.5x cal 2027 PER, with high margins and a c.13.7% FCF yield, the valuation justifies a rerating on quality and growth, in our view supporting a path towards c.8x 2027 PER and 255p fair value per share.

+7%... Now what's going on here then?

Leaky ship re MB deal? Something else?

Good news - shows they are just keeping on keeping on sticking to their strategy. Consolidate, extract synergies, improve, generate cash, repeat. They have the balance sheet for it. This is what I hold them for - long term execution of a very attractive buy and build strategy. Will undoubtedly be highly accrettive.

Any ideas? Leaks or new seller or something else?

I know Gateley has been weak and also concerns re legal data but of RELX. So read across from that?

Seems crazy... Not like this share was frothy before!