(Alliance News) - DWF Group PLC on Friday reported a decline in profit as costs increased faster than revenue, in what was potentially its last annual results before its planned takeover by Inflexion Private Equity Partners LLP.
The Manchester, England-based legal business with operations in North America said pretax profit in the financial year 2023 to April 30 declined 23% to GBP17.2 million from GBP22.3 million a year prior.
Revenue grew 8.6% to GBP451.6 million from GBP416.1 million. Recoverable expenses however increased 8.7% to GBP71.5 million from GBP65.8 million. Administrative expenses increased 11% to GBP162.2 million from GBP146.7 million.
Notably, the company incurred an accelerated depreciation/amortisation cost of GBP6.5 million in financial 2023, with no such cost a year prior. GBP5.1 million of the cost is an accelerated depreciation charge relating to the right of use asset for a vacant floor in an office in Pune, western India. "There are no future plans to occupy this space given the adoption of hybrid working, therefore associated assets have been fully depreciated in the year. The remeasurement adjustment relates to the impact of term and rent changes on property leases during the year," DWF said.
In total, DWF has declared a dividend of 4.85 pence per share for financial 2023, compared to 4.50p a year prior. On top of that, shareholders will receive a 3p special dividend from future DWF-owner Inflexion.
Looking ahead, DWF expects turbulent times and its pressures such as rising costs and volatility in demand to remain.
Chief Executive Officer Nigel Knowles said: "The margin dilution from salary and interest rate increases, which brought us in at the bottom end of adjusted pretax profit expectations, will continue to need mitigating actions on price, productivity and cost control. We believe we have put the right initiatives in place to protect our profit & loss, but are also having to work hard to ensure lock-up stays within a sensible range as clients are inevitably holding on to cash for longer."
Last month, DWF said it has agreed to an acquisition by Inflexion Private Equity of all of its shares, in a deal which values the company at over GBP340 million. Inflexion is a London-based mid-market private equity firm investing across various sectors.
DWF expects its takeover by Inflexion to complete in the final quarter of this calendar year.
DWF shares were 0.2% higher at 97.20 pence each on Friday morning in London.
By Tom Budszus, Alliance News reporter
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