REG - DSW Capital PLC - Final Results FY25
08/07/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250708:nRSH0805Qa&default-theme=true
RNS Number : 0805Q DSW Capital PLC 08 July 2025
8 July 2025
DSW CAPITAL PLC
("DSW Capital", "DSW" or the "Group")
(AIM: DSW)
AUDITED FINAL RESULTS
Transformational acquisition and supernormal levels of M&A activity
deliver record results
DSW Capital, a profitable, mid-market, challenger professional services
licence network and owner of the Dow Schofield Watts and the DR Solicitors
brands, is pleased to announce its Final Results for the year ended 31 March
2025 ("FY25" or the "Period").
FY25 was a year of transformation and building momentum for DSW Capital,
marked by strong financial performance, strategic progress, and the successful
integration of DR Solicitors. The Group has entered FY26 a more robust and
diverse business and, while mindful of macro-economic uncertainties, the Board
views the prospects for year ahead and beyond with confidence.
FY25 FY24
Revenue (£'000) 4,855 2,311
Total income (£'000) (1) 4,965 2,431
Adjusted EBITDA (£'000)(2) 1,787 626
Adjusted PBT (£'000)(3) 1,430 507
PBT (£'000) 1,301 207
Adjusted PBT margin (%) 29.5 21.9
PBT margin (%) 26.8 9.0
Net Assets (£'000) 10,015 7,588
Cash generated by operations 2,011 85
Financial highlights
• Network Revenue(4) increased by 62% to a record £25.8m (FY24: £16.0m), ahead
of market expectations set at the start of the financial year
• Acquisition of DR Solicitors for a total consideration of £6.3m, satisfied by
£4.5m in cash and £1.8m of new ordinary shares, bringing a highly scalable,
cash-generative, and profitable legal platform to the Group
• Adjusted basic earnings per share(5) more than doubled at 5.0p (FY24: 2.0p)
• Average Revenue per Fee Earner in the Year was £214k (FY24: £153k)
• Record activity across the Group drove strong cash generation, with over
£2.0m cash generated from operations (FY24: £0.1m cash generated from
operations)
• Balance sheet remains healthy, with cash balances of £2.7m at 31 March 2025
and net debt of £0.3m (FY24: £2.6m net cash), after a full drawdown of a new
£3.0m Revolving Credit Facility in November 2024 to part fund the acquisition
of DR Solicitors
• Proposed final dividend of 2.0p (FY24: 0.75p), taking the total dividend for
the year to 3.0p (FY24: 2.0p)
Operational highlights
• Exceptional levels of M&A activity generated c.£3.0m of supernormal
Network Revenue in October 2024, with M&A activity levels returning to
more normal levels post the Autumn Budget through to the year end
• Number of fee earners increased by 27% to 136 (FY24: 107), driven by the
acquisition of DR Solicitors, which added 20 heads to the Group, and a further
nine Fee Earners joined existing licensees
• Integration of DR Solicitors, acquired in November 2024, on track with the
business performing well in the year, contributing £0.5m to FY25 Adjusted
EBITDA
• Diversification strategy furthered via acquisition of DR Solicitors:
dependency on M&A reduced significantly to 55% of Total Income(1) (FY24:
68%)
• Transition to our new Executive Board and promotion of Shru Morris as Chief
Executive Officer and Pete Fendall as Chief Finance and Operating Officer,
with James continuing to play a key role as Executive Director
• Mobilisation of our tech enablement strategy, integrating digital tools
including AI & Automation to support our teams and enhance client delivery
Current trading and outlook
• Trading in the early months of the new financial year has been encouraging
with the Network reporting normal levels of M&A activity levels in Q1 FY26
• DR Solicitors continues to perform in line with the Board's expectations, with
a growing pipeline of opportunities to scale the platform of which the Group
is actively exploring a number of options
• Group's dependency on M&A expected to reduce to around a third in FY26
following a full year's contribution from DR Solicitors
• While mindful of ongoing global macro-economic uncertainty, the Group is
currently trading in line with expectations and the Board remains confident in
the prospects for the business in FY26 and its strategy to build shareholder
value over the long term
(1) Total income represents statutory revenue from DSW licensees and DR Solicitors
plus share of results of associates
(2) Adjusted EBITDA is defined as Operating Profit adjusted to add back
depreciation (£169k), amortisation (£185k), acquisition costs (£25k) and
share-based payment expense (£104k)
(3) Adjusted profit before tax is defined as profit before tax adjusted to add
back the items not considered part of underlying trading including share-based
payment expense (£104k) and acquisition costs (£25k). It is a non-GAAP
metric used by management and is not an IFRS disclosure
(4) Network Revenue is defined as total revenue earned by DSW Licensees and DR
Solicitors, as opposed to total revenue reported by the Company
(5) Adjusted basic earnings per share is defined as EPS adjusted to remove the
impact of the share-based payment charge incurred in the year and acquisition
costs
Shru Morris, Chief Executive Officer, said:
"Trading in the early months of the new financial year has been encouraging,
despite ongoing macroeconomic uncertainty. Over the past two years, the Group
has navigated a series of challenges with resilience and adaptability. As a
result, we enter FY26 as a more robust business, one that is equipped to
deliver a broader and more integrated range of services to our clients than
ever before.
"The transformation of DSW Capital, achieved in FY25, reinforces my great
confidence in the Group's ability to capitalise on an evolving landscape in
professional services. Our scalable platform has the capacity to support
significant further growth, with financial headroom to welcome additional
licensees, and invest in our existing businesses to grow their teams. We are
also encouraged by a healthy and active pipeline of opportunities.
"Looking ahead, we expect organic growth to continue to strengthen in FY26,
underpinned by sustained recruitment momentum and a more focused approach to
expanding our presence in the mid-market. We remain committed to delivering on
our ambitious medium-term growth plan, building on the progress we've made,
the momentum we're seeing across the Group, and the favourable market
dynamics. With a combination of strong organic performance and a robust
recruitment pipeline, we are confident in both the year ahead and our ability
to scale the business and deliver long-term value."
Online investor presentation
An online investor presentation and Q&A will be hosted by the management
team on 10 July at 4.00pm. To participate, please register with SparkLive at:
DSW FY25 Results Presentation
(https://url.avanan.click/v2/___https:/gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fsparklive.lseg.com%2FDSWCAPITAL%2Fevents%2F6f100db8-30e9-4b4f-a65e-fd319e7f917a%2Fdsw-capital-plc-fy25-full-year-results&data=05%7C02%7Ccat%40rfpr.co.uk%7Caf30e6689f7a43b1b8f208ddb3edb2a8%7C380097a888be455d81c649770f277d04%7C0%7C0%7C638864555702958396%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=FxmuPjSZy79insE3Om%2BxkfeQHglpVcXlBpVR1Jf9Pco%3D&reserved=0___.YXAxZTpzaG9yZWNhcDphOm86NjQyYTc4Y2UxMTQ4NDc5YTYzOWY4NGZkZDc3OWU5NTg6Njo3ZmEwOmUzMzNiNTBiYzVmMjRkNmEwMWM4ZjFlMjM2MmE5Yjc1ZDBkZjNmYjBlNWZkNmViODZiMjc2OWEzY2FjYjZkYjk6cDpGOk4)
.
Dividend and Record Pay Date
The record date for the Group's proposed final dividend of 2.0 pence per share
is 12 September 2025 and the dividend payment date is 3 October 2025. The
ex-dividend date is 11 September 2025. The Group's ISIN and TIDM are
GB00BNG9H550 and DSW, respectively.
Notice of AGM
The Group's annual general meeting ("AGM") will be held on 16 September
2025 at 09:00am at The Park Royal Hotel, Warrington, WA4 4NS. Notice of the
AGM will be posted with copies of the Group's report and accounts on 12 August
2025. Copies will also be available at this date on the Group's website:
Investors - Dow Schofield Watts (dswcapital.com)
(https://url.avanan.click/v2/___https:/dswcapital.com/investors/___.YXAxZTpzaG9yZWNhcDphOm86MjVmODdiM2RhNzQ4Mjg2ZWI3YjI1MTA5YWI1YTQ3NzU6NjoxNzNkOjFmZDgyYzM5YmQ2YTExM2ZkYmZjYzlmNGRiMTA4ZWYzMjkwMDQxMTNiYjgyMTFkZmI4MDNkYjNmOGQwMzQ3MzY6cDpUOk4)
.
Enquiries:
DSW Capital Tel: +44 (0) 1928 378 100
Shru Morris, CEO
James Dow, Executive Director
Pete Fendall, CFOO
Shore Capital (Nominated Adviser & Broker) Tel: +44 (0)20 7408 4090
James Thomas/Mark Percy/George Payne (Corporate Advisory)
Guy Wiehahn / Isobel Jones (Corporate Broking)
Rawlings Financial PR Limited dswcapital@rfpr.co.uk (mailto:dswcapital@rfpr.co.uk)
Cat Valentine Tel: +44 (0) 7715 769 078
About DSW Capital
DSW Capital, owner of the Dow Schofield Watts and DR Solicitors brands, is a
profitable, mid-market, challenger professional services network with a cash
generative business model and scalable platform for growth. Originally
established in 2002, by three KPMG alumni, Dow Schofield Watts is one of the
first platform models disrupting the traditional model of accounting
professional services firms. DSW Capital operates licensing arrangements with
its businesses and has over 130 fee earners across 12 offices in the UK. These
businesses trade primarily under the Dow Schofield Watts and DR Solicitors
brands.
DSW Capital's vision is for our brands to become the most sought-after
destinations for ambitious, entrepreneurial professionals to start and develop
their own businesses. Through a licensing model, DSW Capital gives
professionals the autonomy and flexibility to fulfil their potential.
Being part of the DSW Capital group brings support benefits in recruitment,
funding and infrastructure. DSW Capital's challenger model attracts
experienced, senior professionals, who want to launch their own businesses and
recognise the value of DSW Capital's brands and the synergies which come from
being part of the network.
DSW Capital aims to scale its agile model through organic growth, geographical
expansion, additional service lines and acquisitions. The Directors are
targeting high margin, complementary, niche service lines with a strong
synergistic fit with the existing network.
CHAIR'S STATEMENT
I am pleased to present DSW Capital's results for the year ended 31 March
2025. On behalf of the Board, I would like to begin by expressing my sincere
thanks to all colleagues across the business for their unwavering commitment
and support throughout the year, a year marked by significant strategic
progress and strong financial performance. In particular, I would like to
thank James Dow, who stepped down as CEO at the year-end - his tenure
culminating in the delivery of this record performance for the Group.
Following the transformative, earnings-enhancing acquisition of DR Solicitors
and exceptional levels of 'Beat the Budget' M&A activity, Network Revenue
increased by 61.8% to a record £25.8m (FY24: £16.0m), exceeding expectations
set at the beginning of the financial year by 30%.
It was great to see the considerable efforts of our colleagues recognised in
Experian's list of the Most Active UK Corporate Finance Advisers by Number of
Deals 2024. The DSW Network rose four places to 15(th) in the rankings (2023:
19(th)), our highest achievement to date.
Central investments in marketing, technology, and infrastructure continue to
strengthen our platform and support long-term, sustainable growth. With a
strong balance sheet and robust capital base, DSW Capital remains
well-positioned to grow both organically and through the strategic acquisition
of talented individuals and teams as opportunities arise.
Long-term vision and strategy
At DSW Capital, our long-term vision is clear: to empower pioneers to build
and grow their own businesses, and to become the leading business advisory
group run by entrepreneurs, for entrepreneurs. This vision underpins every
strategic decision we make and is the foundation of our refreshed strategy,
which was introduced in April 2025 to reflect the evolving needs of our
network and the opportunities ahead.
Our mission is to create a resilient, diversified group of high-performing
licensee businesses, supported by a scalable platform and a strong,
entrepreneurial culture. The acquisition of DR Solicitors was a pivotal step
in this journey, providing a robust legal platform from which we can expand
our service offering, attract new talent, and deepen client relationships.
Looking ahead, we will continue to invest in our people, technology, and
infrastructure to support the long-term success of our licensees. We are
focused on expanding into adjacent advisory sectors, accelerating recruitment
across both our core and emerging service lines.
With a strong balance sheet, a clear strategic roadmap, and a growing network
of ambitious professionals, we are confident in our ability to deliver
long-term value for shareholders, clients, and colleagues alike.
New Additions to the Network
A major milestone in FY25 was the acquisition of DR Solicitors, a
transformative addition to the DSW Network and a key enabler of our long-term
strategic ambitions. The business added a highly respected legal platform into
the Group, significantly enhancing our service offering and positioning DSW as
a compelling destination for entrepreneurial legal professionals.
The acquisition marked a step-change in our diversification strategy, allowing
us to expand into the legal sector with a proven, high-quality team that
shares our values and growth mindset. DR Solicitors provides a scalable
foundation from which we can grow our legal capabilities and attract
professionals seeking an alternative to traditional law firm models.
This exciting and transformative acquisition unlocks a plethora of opportunity
for the Group and we are focused on building on this momentum to further
diversify and strengthen the DSW Network.
People and Diversity
Our colleagues remain central to everything we do and achieve. Creating a
positive, dynamic culture that is attractive to talent and enables our people
to thrive continues to be the top priority for the Board. We are proud of the
entrepreneurial spirit that defines the DSW Network and are committed to
fostering an environment in which individuals feel empowered, supported, and
valued.
Diversity is at the core of DSW's model and a cornerstone of our ESG strategy.
We firmly believe that a broad range of perspectives enhances innovation,
decision-making, and long-term success. Our commitment to diversity extends
beyond gender to include ethnicity, sexual orientation, gender identity,
social mobility, disability, and other factors that may lead to disadvantage
in other environments.
As our Network grows, we will continue to ensure that DSW is a place in which
all professionals, regardless of background, can succeed. This commitment to
inclusion is embedded in our culture and will continue to guide how we welcome
new individuals and businesses into the Group.
Technology
Technology continues to play a vital role in enabling the DSW model and
supporting the success of our licensees. We are committed to investing in the
right technologies to protect our licensees and their clients, while keeping
pace with the rapidly evolving IT landscape. These investments are designed to
embed efficiencies, enhance service quality, protect our licensees, and
deliver greater value across the Network.
With this ongoing investment, our licensees are empowered to fully embrace the
flexibility and autonomy that define the DSW model, choosing how and where
their teams work to maintain a strong work-life balance and foster greater
collaboration.
During the year, we continued to invest in an additional senior IT resource to
help implement our IT strategy and provide expert, industry-leading advice to
the Board. Our key focus areas include continued investment in cybersecurity,
maintaining excellent IT service levels, and building a platform that enables
us to embrace and lead on technology implementation. In May 2025, the Board
undertook external cybersecurity training, reinforcing our commitment to
governance and risk management in this critical area.
As we look ahead, technology will remain a cornerstone of our strategy,
enabling growth, safeguarding our operations, and ensuring we can continue to
deliver a premium experience for our licensees and their clients.
Board and Governance
Our people lie at the heart of DSW Capital's success, and this year we
undertook key leadership transitions to support the Group's long-term
strategic goals and continued growth.
On 25 November 2024, Pete Fendall, previously Group COO and Interim CFO, was
formally appointed as Chief Finance and Operating Officer. This reflects
Pete's expanded responsibilities and his contribution to the Group's
operational and financial leadership.
On 1 April 2025, Shru Morris succeeded James Dow as Chief Executive Officer.
Shru played an integral role, working alongside Pete Fendall, in securing the
acquisition of DR Solicitors in the year, and I look forward to the further
development of the Group under their leadership.
James, who co-founded of the business and was the driving force behind the IPO
of DSW in 2021, continues to play a vital role in the Group's development. He
is actively involved in attracting new businesses and Partners to the Network,
while also providing ongoing strategic counsel to the Group's management team.
On behalf of the Board, I thank James for his exceptional leadership,
dedication, and hard work in building DSW into the business it is today.
The Board consists of five directors, three of whom are executive directors
and two non-executive directors. Both non-executive directors, Jillian Jones
and I, are considered independent. The current Board reflects a blend of
different experience and backgrounds and is considered appropriate for the
scale of the business.
The Board is supported by two committees, namely the Audit and Risk Committee
and the Remuneration and Nominations Committee, with formally delegated duties
and responsibilities.
I am happy to report that DSW has complied with the updated QCA Corporate
Governance Code 2023 throughout FY25, and you can find more information on our
governance arrangements in the Corporate Governance Statement on pages 41-44
of the Annual Report.
Our approach to Risk
At DSW, we take a proactive and structured approach to risk management,
beginning at the highest level with the Board. Alongside my fellow directors,
I continue to closely monitor and assess the risks facing the Group, ensuring
that robust mitigation strategies are in place to protect the business and
support sustainable growth.
Supporting the DSW Network in managing risk has remained a key priority
throughout the year. We have delivered targeted interventions such as
Compliance Inductions and Risk Management Workshops for newly established
licensee businesses, which have been positively received. Notably, following
the acquisition of DR Solicitors, we held a dedicated Risk Management Workshop
to ensure alignment with DSW's risk framework and to establish a register of
principal risks relevant to their operations.
We continue to invest in our compliance infrastructure, providing relevant
guidance and training to promote a proactive, informed approach to risk
management across the Network. This commitment ensures that our licensees are
well-equipped to navigate an increasingly complex regulatory environment while
maintaining the highest standards of professionalism and integrity.
For more detail, please refer to Risk Management section on pages 35-38 of the
Annual Report.
Environmental, Social and Governance ("ESG")
As a Board, we understand and welcome the increasing importance of ESG to our
investors, employees, and clients. We are committed to creating positive,
long-term interactions with all stakeholders and view ESG as a fundamental
part of how we operate and grow the business.
The Group's ESG cornerstones and priority areas remain high on the Board's
agenda. We are pleased to publish our ESG Report within this year's Annual
Report. It provides a comprehensive review of our progress to date and the
meaningful actions we are taking in areas in which we can have the greatest
impact. You can read more about our initiatives and performance in the
Environmental, Social and Governance Report on pages 30-34 of the Annual
Report.
We also continue to make voluntary Streamlined Energy and Carbon Reporting
(SECR) disclosures, recognising the vital role all businesses must play in
reducing carbon emissions and improving energy efficiency. Further details can
be found in the Directors' Report on pages 50-54 of the Annual Report.
Our commitment to ESG is not just led by compliance, it is centred on building
a responsible, resilient business, which creates long-term value for all
stakeholders.
Dividend
Following the strong performance in FY25, the Board is pleased to propose a
final ordinary dividend of 2.0 pence per share for the year ended 31 March
2025. This brings the total dividend for the year to 3.0 pence per share,
marking a return to a progressive dividend policy.
This decision not only reflects the Group's improved financial performance
during the year but also the successful diversification of the business,
particularly through the acquisition of DR Solicitors, which significantly
reduced the Group's exposure to M&A activity.
An interim dividend of 1.0 pence per share in respect of the six months to 30
September 2024 was paid on 10 January 2025. If the proposed final dividend is
approved by shareholders, it will bring the total cumulative dividends paid to
shareholders post-IPO to 12.98 pence per share.
The Board remains committed to delivering long-term value to shareholders and
is confident that the reinstated progressive dividend policy reflects the
Group's strengthened position and future growth potential.
Outlook
FY25 has been a year of transformation and building momentum for DSW Capital,
marked by strong financial performance, strategic progress, and the successful
integration of DR Solicitors.
Our refreshed strategy, underpinned by a clear vision and four focused
strategic pillars, positions us well to continue building a resilient,
diversified, and scalable business advisory group. We remain committed to
investing in our people, our platform, and our brand to unlock long-term value
for all stakeholders.
While we remain mindful of the broader macroeconomic environment and its
potential impact on market activity, the strength of our model, the quality of
our licensees, and the agility of our leadership team give us confidence in
our ability to navigate challenges and seize new opportunities.
The Board looks forward to FY26 with optimism and remains excited about the
long-term prospects for the Group.
Heather Lauder
Independent Non-Executive Chair
CHIEF EXECUTIVE OFFICER'S REVIEW
I am delighted to present this set of results, my first as Chief Executive
Officer of DSW Capital. This outstanding performance was achieved under the
inimitable leadership of James Dow, who co-founded DSW and led the business
for 22 years. I thank him, wholeheartedly, for placing his trust in me to
lead the business forward and continue building on his life's work.
FY25 was a transformative year for DSW, defined by an outstanding trading
performance and strategic expansion with the successful acquisition of DR
Solicitors. The acquisition of a highly scalable legal platform not only
strengthens DSW's position in the market through enhanced diversification but
also broadens the range of niche professional services available to our
network and clients.
Our vision to empower pioneers has never been more relevant, and our results
this year reflect the strength of our platform, people, and purpose.
We delivered Network Revenue of £25.8m (FY24: £16.0m) representing record
growth of 61.8% year on year, bolstered by the acquisition of DR Solicitors
and exceptionally strong levels of M&A activity and completions ahead of
the Autumn Budget. Our keen focus on talent acquisition enabled us to end the
year with a record 136 Fee Earners, up from 107 in FY24, and 51 Partners
(FY24: 50), giving us a great platform for growth in the year ahead.
We delivered a strong performance and growth across our core service lines,
underscoring the effectiveness of our strategy to attract high-quality fee
earners and deepen client relationships. This momentum reflects tangible
returns on the investments we have made in recent years, particularly in
enhancing our platform, expanding our service offering, and strengthening our
brand presence. These results reinforce our confidence in the scalability of
DSW's model and its ability to deliver sustainable, long-term value for
shareholders.
The creation of DSW was truly pioneering, an innovative model that was the
first of its kind within professional services. James's vision has always
been, and continues to be, inspirational. He has worked tirelessly to empower
others to build and grow successful businesses.
I would like to take this opportunity to thank our Executive Director and
Co-founder, James Dow, for his unwavering support and leadership over the past
year, and for guiding the business with vision and dedication for the past 23
years.
Strong trading results
Adjusted EBITDA increased by 186% to £1.79m (FY24: £0.63m), reflective of
the high quality, high margin work delivered to clients, as well as the
earnings-enhancing acquisition of DR Solicitors.
Revenue more than doubled to £4.9m (FY24: £2.3m) and Adjusted Profit before
Tax was almost tripled to £1.4m (FY24: £0.5m). The Group experienced
heightened levels of M&A activity in FY25 as a high number of business
owners sought to 'beat the budget', resulting in around £3.0m of supernormal
Network Revenue in October 2024, which contributed to the Group's strong
profitability in the year.
Cash generation from operations was also very strong at £2.0m (FY24: £0.1m),
reflecting strong cash conversion, low working capital days and high quality
of earnings demonstrating the strength of our model. The Group's balance sheet
remains healthy with cash balances of £2.7m at 31 March 2025 (FY24: £2.6m),
and net debt of only £0.3m (FY24: £2.6m net cash), following the full
drawdown of a new £3.0m Revolving Credit Facility in November 2024 to part
fund the DR Solicitors acquisition.
We remain well-resourced to execute our strategy across business advisory
services and build on the DR Solicitors legal platform to scale our service
offering to attract new talent.
DSW's strategy and delivery against it
Our vision is for the DSW platform to empower pioneers to grow their own
businesses. The transformative acquisition of DR Solicitors demonstrates our
strategy, to be a more resilient and diversified group of licensee businesses,
in action. The acquisition reduced the Group's dependency on M&A
significantly in FY25 to 55% of Total Income (FY24: 68%), with a further
reduction to around a third expected in FY26, following a full year's
contribution from DR Solicitors.
In FY24, we invested significantly in additional central recruitment
capability and expanded our geographic footprint with new corporate finance
teams being established in the Midlands and Cardiff. This investment has
delivered a positive contribution to the Group in FY25, as the market
recovered and has gained pace.
In FY25, our investment focus has been on scaling DR Solicitors, boosting our
marketing capabilities to strengthen our brand and building on our legal
proposition, to create a flexible platform that enables ambitious and
entrepreneurial lawyers to start and grow their own businesses.
Our differentiated model and the creation of a business advisory group is set
to create even more opportunities to drive talent acquisition and growth for
the future. Our deepened breadth of expertise has created a much stronger
platform to attract and deliver for mid-market clients across the UK.
Professional Headcount
Our focus is on the recruitment of new Partners, new teams and the recruitment
of additional Fee Earners to grow existing licensee businesses.
At the year-end, the number of Fee Earners, including Partners, had grown to a
new record number of 136, an increase of 27.1% (FY24: 10.3%). Since March
2013, the number of Fee Earners has increased from 30 to 136 which equates to
a 12-year compound annual growth rate ("CAGR") of over 13%. The Group has
added 54 Fee Earners since the Admission to AIM in December 2021.
Partner recruitment remains a cornerstone of long-term shareholder value.
While the recruitment market tightened in FY25, partly due to improved M&A
activity in late 2024 as teams were busy delivering for clients, we are now
seeing early signs of renewed momentum as activity picks up in the new
financial year. The acquisition of DR Solicitors increased our professional
headcount by 20 and an additional nine heads joined as a result of organic
growth across the Network. We have a good pipeline of future licensees and Fee
Earners, as the market for top talent coming away from traditional
professional services firms has improved.
Empowering pioneers
We have been empowering pioneers since 2002, creating a platform model to
disrupt our industry and give ambitious individuals the freedom and autonomy
to thrive. This wealth of experience informs every element of our proposition
and is why we have been able to empower individuals through the Dow Schofield
Watts brand, and now the DR Solicitors brand, to create both value and lasting
legacies.
The traditional advisory and legal models are undergoing the most
transformative change we have seen for many years. The interest from Private
Equity and consolidation into larger groups is changing the landscape for
future Partners, and we are well placed to challenge these structures to
attract top entrepreneurial talent. Professionals are increasingly seeking
roles that empower them and guide them along a clear path to success, away
from traditional corporate structures. Our Partners are empowered to run their
own businesses with the freedom to decide how, where, and with whom they work.
Our Partners and their teams are our greatest ambassadors. On behalf of our
shareholders, I would like to take this opportunity to thank all of them for
their continuing commitment to Dow Schofield Watts and our values.
Strength in our brand
DSW must continue to demonstrate that it is a highly attractive proposition
for professionals who work for clients in the UK "mid-market". Strengthening
our brand proposition to professionals in the accountancy sector and reaching
new audiences within the legal sector is our primary focus for this year.
Recruiting Partners and teams of the right quality remains our priority. As at
31 March 2025, 41% of DSW employees and Partners previously worked at a Big 4
firm, and 33% of DR Solicitors previously worked at Magic or Silver Circle law
firms.
The quality of DSW's people and their clients is reflected in our average
revenue per fee earner of £214k (FY24: £153k), which has seen a huge
improvement as we capitalised on favourable market conditions and added
high-quality revenues from DR Solicitors.
DSW's achievements and capabilities were further demonstrated in achieving a
major milestone, surpassing 500 deals comprising £10bn in value since its
inception in 2002. DR Solicitors was also named the 6th fastest growing legal
platform firm in the Sub-30 Fee Earner category in 2024(*), enabling us to
benefit from high quality fee earners who want a credible alternative to
working in a larger law firm.
(*) Source: Codex Edge - Platform Firms Report 2025
Optimising our platform
In FY25, DSW Capital made significant strides in operational excellence,
strengthening its position as a leading business advisory platform for
entrepreneurial professionals. Our efforts were anchored in the strategic
pillar of "Optimising our Platform," which underpins our vision to empower
pioneers to build and grow their own businesses.
A key focus was the enhancement of our "plug-in-and-play" platform, designed
to streamline onboarding, client delivery and enable seamless collaboration
across service lines. We invested in our brand and marketing capability,
investing in a new corporate PR agency in the year which has helped to reach
new audiences and attract interest from clients and potential recruits.
We also advanced our tech enablement agenda, integrating digital tools to
support our deal advisory teams.
In October, we successfully hosted our second full employee conference, an
outstanding initiative born from our Future Leaders Programme, to aid
collaboration across the network. The Future Leaders Programme, developed in
partnership with BecomingX, continues to grow in impact and reach. This year,
it welcomed its third cohort, comprising 10 talented Employees and Partners,
further strengthening our commitment to leadership development across the
firm.
Together, these initiatives and our platform, create a strong foundation for
future growth, enabling DSW Capital to deliver on its ambition of becoming the
destination of choice for ambitious entrepreneurs.
The DSW Capital team has worked tirelessly to enhance the support we provide
to our licensees and to build a market-leading platform that attracts and
empowers the next generation of professional talent. I would like to extend my
sincere thanks to the entire team for their dedication, hard work, and
commitment over the past year.
International network
DSW has an established partnership network of global advisory firms, called
"Pandea Global M&A". Pandea Global M&A comprises selected independent
firms with a primary focus on the origination and execution of middle market
M&A activities. We believe this network of 37 member firms, with 360
dealmaking professionals in 69 offices across 34 countries, is the 13th
largest M&A network in the world.
The Pandea network increases DSW's access to overseas buyers, investors, and
valuable local knowledge, while providing its UK-based clients with access to
an enlarged pool of acquisition targets. The Pandea network delivered 251
deals in 2024, some of which were engaged across Pandea teams, demonstrating
the referral opportunities it provides.
The Pandea conference held in Dubai in May 2025, which DSW attended, attracted
over 45 delegates from 23 of the 33 member firms.
Looking ahead
Trading in the early weeks of the new financial year has been encouraging,
despite ongoing macroeconomic uncertainty. Over the past two years, the Group
has navigated a series of challenges with resilience and adaptability. As a
result, we enter FY26 as a more robust business, one that is equipped to
deliver a broader and more integrated range of services to our clients than
ever before.
The transformation of DSW Capital, achieved in FY25, reinforces my great
confidence in the Group's ability to capitalise on an evolving landscape in
professional services. Our scalable platform has the capacity to support
significant further growth, with financial headroom to welcome additional
licensees, and invest in our existing businesses to grow their teams. We are
also encouraged by a healthy and active pipeline of opportunities.
Looking ahead, we expect organic growth to continue to strengthen in FY26,
underpinned by sustained recruitment momentum and a more focused approach to
expanding our presence in the mid-market. We remain committed to delivering on
our ambitious medium-term growth plan, building on the progress we've made,
the momentum we're seeing across the Group, and the favourable market
dynamics. With a combination of strong organic performance and a robust
recruitment pipeline, we are confident in both the year ahead and our ability
to scale the business and deliver long-term value.
Shrutisha Morris
Chief Executive Officer
CHIEF FINANCE & OPERATING OFFICER'S REVIEW
Key Performance Indicators
The following KPIs are used by management to monitor the financial performance
of the Group:
FY25 FY24 FY23
Revenue (£'000) 4,855 2,311 2,714
Total income (£'000)(1) 4,965 2,431 2,998
Adjusted EBITDA (£'000)(2) 1,787 626 1,536
Adjusted PBT (£'000)(3) 1,430 507 1,409
PBT (£'000) 1,301 207 715
Adjusted PBT margin (%) 29.5 21.9 51.9
PBT margin (%) 26.8 9.0 26.3
Net Assets (£'000) 10,015 7,588 7,895
Cash generated by operations 2,011 85 1,350
The Group also measures its performance using the following KPIs which are
derived from the performance of the DSW Network:
FY25 FY24 FY23
Total revenue of all Network licensees (£'000) 25,844 15,975 18,263
Revenue per Fee Earner (£'000) 214 153 193
Revenue per Partner (£'000) 507 320 435
Fee Earners (Closing Number) 136 107 97
Fee Earners (Average Number) 121 104 95
FY25 was a landmark year for the Group, marked by record-breaking growth,
strategic diversification and the realisation of prior year investments.
Against a backdrop of improving market conditions and a resurgence in M&A
activity, we have delivered exceptional financial and operational performance,
underpinned by our resilient business model and disciplined execution.
This year's results reflect the benefits of our proactive recruitment strategy
and the transformational acquisition of DR Solicitors, which has significantly
enhanced our earnings and broadened our sector exposure. Network revenue grew
by 61.8%, driven by both organic growth and the contribution from DR
Solicitors, while Adjusted EBITDA nearly tripled year-on-year.
We are particularly proud of the momentum in Fee Earner growth, with headcount
increasing by 27.1% and revenue per fee earner rising by 39.5%, demonstrating
the strength of our platform and the quality of our teams. Our central
investments in marketing, technology, and infrastructure continue to support
our licensees and position the Group for long-term, sustainable growth.
FY25 was a year of delivery, of strategy, of scale, and of resilience. As we
look ahead, we remain focused on building a more diversified and robust
business, capable of thriving across market cycles and delivering value for
all stakeholders.
Income Statement
Revenue and Network Revenue
Network Revenue for the year was £25.8m, an increase of 61.8% on the prior
year and a record year for the Network. The impressive growth, year on year,
can be pinpointed to three things.
Firstly, off the back of a challenging two years, in which we experienced
subdued M&A activity, levels of M&A activity in October 2024 were
strong, as transactions completed to 'beat the budget' ahead of anticipated
tax legislation changes. We estimate that this spike contributed to £3m of
'supernormal' Network Revenue, as we enjoyed both an increased number of deal
volumes and in size of transaction in the run up to the Autumn Budget.
In FY25, we also benefitted from the investments we made in FY24, in which we
welcomed a record number of new Partners into the Network. These additions
included five corporate finance partners, who were able to benefit from the
heightened M&A activity in October 2024. Underlying DSW licensee revenue
grew by 52.8% year on year. Even after stripping out the 'supernormal'
activity, Network Revenue grew by 34.1%.
Furthermore, the transformational acquisition of DR Solicitors significantly
enhanced the Group's earnings, contributing £1.4m of income in the five-month
period post-acquisition. This strategic acquisition has enabled us to expand
into the legal sector, diversifying the business and reducing our dependency
on M&A, which reduced from 68% to 55% in FY25. We expect our M&A
dependency to reduce further to approximately a third in FY26, reflecting our
efforts to build a more resilient business through synergistic
diversification.
Our average effective licence fee reduced to 14.5% (FY24: 15.4%), reflecting
reduced profit share contributions from some of our licensees as they invested
in their teams to drive top-line growth. Overall income from licensees,
including our share of results from associates, increased by 45.6% to £3.5m.
Fee Earners
FY25 proved to be a record-breaking year for Fee Earner growth, with headcount
rising from 107 to 136 - a 27.1% increase year on year. This was driven by the
acquisition of DR Solicitors in November 2024, which added 20 new Fee Earners
to the Network. Encouragingly, we are pleased to report that nine heads (8.4%)
joined as a result of organic growth across the Network, reflecting renewed
confidence.
This momentum in both headcount and revenue growth underscores the
effectiveness of our targeted investments and strategic acquisitions over the
past year. By expanding our sector reach and deepening our talent pool, we
have set a robust foundation for scalable growth. The integration of DR
Solicitors has not only diversified our income streams but also enhanced our
ability to attract high-caliber professionals looking for innovative, flexible
working environments. These actions position us favorably to capture new
opportunities, while maintaining operational excellence across the Group.
Last year, we noted that, while economic conditions created an opportunity for
partner growth, many licensees were taking a cautious approach to recruitment.
This year, a significant boost in market activity has prompted our teams to
act. As a result, average team size has increased from 4.6 to 5.4, with
notable growth in our new start-ups, which have established themselves as
'best-in-class' advisors in their local regions.
Revenue per Fee Earner increased by 39.5% to £214k (FY24: £153k), as a
result of higher utilisation due to increased M&A activity and increased
levels of contribution from start-ups who joined in the prior year. Our
revenue per Fee Earner remains comparable with our larger listed peers such as
Knights, Gateley and Keystone Law, as well as the Big 4.
The investment in partner recruitment in FY24 is now bearing fruit, and we
remain confident that DSW continues to be a highly attractive destination for
ambitious professionals as an organic recruitment momentum builds.
Furthermore, we see significant potential for growth in DR Solicitors; in
2024, twice as many lawyers opted to leave 'traditional' law firms to move to
'platform' models like DR Solicitors. Our focus is to tap further into this
growing trend in the legal sector.(*)
(*) Source: Codex Edge - Platform Firms Report 2025
Central Costs
We are committed to maintaining a lean cost base, whilst ensuring we provide
our licensees with the support they need to thrive and fulfil their potential.
We recognise that for our Partners and Employees to be the best that they can
be, we need to invest in central initiatives that ensure we remain the best
that we can be and provide increased value to our Licensees.
Central costs (excluding the share-based payment charge and acquisition costs)
increased by £0.98m, on the prior year. Most of the increase can be linked to
the DR Solicitors acquisition, with £0.4m being the acquired cost base of DR
Solicitors and an additional £0.1m attributable to the increased amortisation
charge linked to the customer relationships acquired within the year.
We also continued to re-invest in our central infrastructure, most notably
marketing to promote our Brands and Partners, but also in technology and
subscriptions to equip our licensees with the best tools and resources to
deliver excellent client service.
We are largely insulated from wage inflation as licensee employee costs are
borne by the licensee businesses and partners are remunerated based on the
fees they bill. The fixed cost base now includes 19 people (excluding
directors), 18 full time equivalents following the acquisition of DR
Solicitors. This investment in the existing team and DR Solicitors led to
increased staff costs which rose by £0.4m year on year from £1.0m to £1.4m.
Similarly, the licensee businesses bear their own property costs or work from
home. Therefore the Group's exposure to inflationary pressures is limited to
two office premises.
We continued to invest in our marketing team and resources to strengthen the
marketing offering we provide to all our licensees. This included appointing a
new corporate PR provider for the Group and increased spending on external
events and sponsorship.
Adjusted PBT, Adjusted EBITDA and Acquisition Costs
Adjusted PBT is calculated as follows:
FY25 FY24
(£000's) (£000's)
Profit before tax 1,301 207
Share based payments 104 299
Acquisition costs 25 -
Adjusted PBT 1,430 506
Impairment of loans due from associated undertakings 62 130
Finance costs 173 22
Depreciation 169 145
Amortisation 185 59
Finance Income (232) (236)
Adjusted EBITDA 1,787 626
Our Adjusted Profit Before Tax was £1.4m (2024: £0.5m), an increase of
182.2% on the prior year, reflecting increased levels of licensee activities,
increased amortisation charges linked to the acquired customer relationships,
increased provisioning against licensee balances, and increased investment in
central infrastructure noted above.
Adjusted EBITDA was £1.8m (2024: £0.6m), an increase of 185.5% on the prior
year, stripping out the increased amortisation charge and finance costs linked
to the DR Solicitors acquisition.
We have a share-based payment charge in the year of £0.1m, which has reduced
from £0.3m in the prior year. The £0.2m reduction year on year is due to the
growth shares issued on IPO being fully expensed in the prior year and the
ongoing charge now relating solely to the executive LTIP scheme.
Taxation
The effective rate of tax (based on PBT excluding the share-based payments
charge which is non-deductible) was 23.1%, slightly above the statutory rate
primarily due to depreciation and amortisation in excess of capital
allowances.
Earnings Per Share
Earnings per share increased year on year due to the significantly increased
profitability within the period, although the impact was partially diluted by
the shares issued within the period linked to the DR Solicitors acquisition.
Adjusted basic earnings per share for the year is 5.0p (2024: 2.0p).
Adjusted EPS removes the impact of the share-based payment charge incurred
in the year and acquisition costs (as shown above).
Balance Sheet
Cash
The Group's business model is cash-generative as the working capital
requirement for the licensee businesses, which includes employee and property
costs, are borne by the individual licensees. In addition, Partners only get
paid when their invoices are paid so they are highly motivated to collect cash
from clients. The acquisition of DR Solicitors brings another highly
cash-generative platform model into the Group, which has impressively low lock
up of 52.8 days, significantly below that of traditional law firms which
average at 130 days.
Overall debtor days significantly reduced from 133 days to 61 days. This was
largely due to the acquisition of DR Solicitors which has debtor days of 20,
but have also seen an improvement in debtor days across DSW licensees, due to
improved cash generation across our licensee businesses.
Cash generated from operations was £2.0m (2024: £0.1m). Operating cash
conversion(4) in the year was 113%, a significant improvement on the prior
year (2024: 14%), which was impacted by the subdued M&A activity but also
an outflow of £0.5m in loans to new licensees. Operating cash conversion was
boosted by the 'supernormal' Network Revenue, further cash generation from DR
Solicitors, and £0.2m of loan repayments from licensees within the year.
Capital expenditure was minimal in the year (£0.06m) and lease payments of
£0.12m related to the Offices in Daresbury and London. Interest income
(£0.2m) was earned on licensee loans and the Group's cash balances.
The closing cash and cash equivalents balance remains healthy with cash
balances as at 31 March 2025 of £2.7m (2024: £2.6m). Cash balances increased
by £0.1m, due to strong cash generated from operations of £2.0m, offset by a
net cash outflow of £0.8m from existing cash reserves in relation to the DR
Solicitors acquisition. Total cash consideration for DR Solicitors was £3.7m,
of which £2.9m was funded by a new revolving credit facility secured within
the period. Additional cash outflows include £0.6m of corporation tax
payments (2024: £0.2m) and dividends of £0.4m paid within the period (2024:
£0.7m).
Borrowings
As mentioned above, a £3.0m revolving credit facility was secured within the
period and fully drawn down to fund the DR Solicitors acquisition. The
facility carries interest of 4.5% above the Bank of England base rate and is
subject to standard gross leverage and interest cover covenants. In FY25,
interest of £113k was paid on the facility. At 31 March 2025, the Group had
net debt of £0.3m (FY24: £2.6m net cash). On the 12 June 2025, a repayment
of £1.0m was made as a result of the strong cash generation in FY25.
Net Assets
The Group has a strong balance sheet with net assets of £10.0m at the
year-end (2024: £7.6m). We continue to retain healthy cash resources and have
access to additional funding through the revolving credit facility, which
gives us the fire power to continue taking advantage of current recruitment
and strategic acquisition opportunities.
Dividend
Following the strong performance in FY25, the Board has taken the decision to
propose a final ordinary dividend for the year ended 31 March 2025 of 2.0
pence per share, giving total dividends for the year ended 31 March 2025 of
3.0 pence per share. Following the suppressed dividend payment in FY24 (FY24:
Total dividends of 2.0 pence per share), the Board is pleased to be
reinstating a progressive dividend policy. This decision is a result of the
improved performance in FY25, but also the successful diversification of the
business with the acquisition of DR Solicitors, significantly reducing the
Group's exposure to M&A activity.
An interim dividend of 1.0 pence per share in respect of the six months to 30
September 2024 was paid on 10 January 2025.
The final dividend will be approved at the Company's AGM which will be held on
16 September 2025 at The Park Royal Hotel, Warrington, WA4 4NS.
Assuming the FY25 Final Dividend of 2.0 pence is approved at the AGM, the
Group will have paid out 12.98 pence per share in dividends since its IPO in
December 2021.
(1) Total income represents statutory revenue from DSW licensees and DR Solicitors
plus share of results of associates
(2) Adjusted EBITDA is defined as Adjusted profit before tax adjusted to add back
impairment of loans due from associated undertakings (£62k), finance costs
(£173k), depreciation (£169k), amortisation (£253k) and deduct finance
income (£232k)
(3) Adjusted profit before tax is defined as profit before tax adjusted to add
back the items not considered part of underlying trading including share-based
payment expense (£104k) and acquisition costs (£25k). It is a non-GAAP
metric used by management and is not an IFRS disclosure.
(4) Cash conversion is calculated as cash generated by operations divided by
Adjusted EBITDA
Pete Fendall
Chief Finance & Operating Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2025
2025 2024
Note £'000 £'000
Continuing operations
Revenue 4 4,855 2,311
Cost of sales (582) -
Gross profit 4,273 2,311
Share of results of associates 17 110 120
Share of results of jointly controlled entity 18 96 56
Administrative expenses (3,175) (2,364)
Operating profit 1,304 123
Adjusted operating profit(1) 1,433 422
Share based payments expense (104) (299)
Exceptional costs on acquisition (25) -
Operating profit 1,304 123
Finance income 9 232 236
Impairment of loans due from associated undertakings (62) (130)
Finance costs 10 (173) (22)
Profit before tax 1,301 207
Income tax 11 (317) (123)
Profit for the year 6 984 84
Total comprehensive income for the year attributable to owners of the Company 984 84
Earnings per share
From continuing operations
Basic 13 £0.04 £0.004
Diluted 13 £0.04 £0.004
(1) Adjusted Operating profit, which is defined as operating profit adjusted for
items not considered part of underlying trading including share based payments
and exceptional costs, is a non GAAP metric used by management and is not an
IFRS disclosure.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2025
2025 2024
Note £'000 £'000
Non-current assets
Intangible assets 15 6,952 696
Property, plant and equipment 16 297 363
Lease receivable 25 31 82
Investments 19 1,507 1,499
Investments in associates 19 182 145
Interests in jointly controlled entities 19 73 21
Prepayments and Accrued Income 20 744 800
Deferred tax asset 22 - 2
9,786 3,608
Current assets
Trade receivables 20 1,354 839
Prepayments and Accrued Income 20 839 452
Other receivables 20 763 978
Current tax asset - 30
Lease receivable 25 50 49
Cash and bank balances 2,683 2,632
5,689 4,980
Total assets 15,475 8,588
Current liabilities
Trade payables 23 499 192
Other taxation 23 410 179
Other payables 23 71 84
Accruals and Deferred Income 23 553 94
Current tax liabilities 23 202 -
Lease liability 25 162 153
1,897 702
Net current assets 3,792 4,278
Non-current liabilities
Bank loan 23 2,771 -
Deferred tax provision 22 649 -
Lease liability 25 58 218
Dilapidation provision 23 85 80
3,563 298
Total liabilities 5,460 1,000
Net assets 10,015 7,588
Equity
Share capital 24 63 55
Share premium 5,268 5,268
Share-based payment reserve 26 575 498
Merger reserve 1,738 -
Retained earnings 2,371 1,767
Total Equity attributable to owners of the Company 10,015 7,588
The financial statements were approved by the board of directors and
authorised for issue on 7 July 2025. They were signed on its behalf by:
Pete Fendall
Chief Finance and Operating Officer
7 July 2025
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 March 2025
2025 2024
Note £'000 £'000
Non-current assets
Intangible assets 15 653 696
Property, plant and equipment 16 60 64
Lease receivable 25 31 82
Investments 19 7,798 1,499
Investments in associates 19 182 145
Interests in jointly controlled entities 19 73 21
Prepayments and Accrued Income 20 744 800
Other receivables 20 155 130
Deferred tax asset 22 6 2
9,702 3,439
Current assets
Trade receivables 20 1,194 818
Prepayments and Accrued Income 20 449 386
Other receivables 20 763 978
Current tax asset - 30
Lease receivable 25 50 49
Cash and bank balances 2,356 2,615
4,812 4,876
Total assets 14,514 8,315
Current liabilities
Trade payables 23 211 81
Other taxation 23 268 166
Other payables 23 781 83
Accruals and Deferred Income 23 317 85
Current tax liabilities 23 80 -
Lease liability 25 56 54
1,713 469
Net current assets 3,099 4,407
Non-current liabilities
Bank loan 23 2,771 -
Lease liability 25 34 91
Dilapidation provision 23 1 1
2,806 92
Total liabilities 4,519 561
Net assets 9,995 7,754
Equity
Share capital 24 63 55
Share premium 5,268 5,268
Share-based payment reserve 26 575 498
Merger reserve 1,738 -
Retained earnings 2,351 1,933
Total Equity attributable to owners of the Company 9,995 7,754
The profit after tax for the Company was £798,000 (2024: £132,000). Under
s408 of the Companies Act 2006, the company is exempt from the requirement to
present its own income statement.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2025
Share capital Share premium Share-based payments reserve Merger reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2023 55 5,271 1,868 - 701 7,895
Profit for the year - - - - 84 84
Dividends - - - - (687) (687)
Share-based payments - - 299 - - 299
Issue of shares in year - (3) - - - (3)
Reserves transfer (Note 26) - - (1,669) - 1,669 -
Balance at 31 March 2024 55 5,268 498 - 1,767 7,588
Profit for the year - - - - 984 984
Dividends - - - - (407) (407)
Share-based payments - - 104 - - 104
Issue of shares in year 8 - - 1,738 - 1,746
Reserves transfer (Note 26) - - (27) - 27 -
Balance at 31 March 2025 63 5,268 575 1,738 2,371 10,015
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2025
Share capital Share premium Share-based payments reserve Merger reserve Retained earnings Total equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 March 2023 55 5,271 1,868 - 819 8,013
Profit for the year - - - - 132 132
Dividends - - - - (687) (687)
Share-based payments - - 299 - - 299
Issue of shares in year - (3) - - - (3)
Reserves transfer (Note 26) - - (1,669) - 1,669 -
Balance at 31 March 2024 55 5,268 498 - 1,933 7,754
Profit for the year - - - - 798 798
Dividends - - - - (407) (407)
Share-based payments - - 104 - - 104
Issue of shares in year 8 - - 1,738 - 1,746
Reserves transfer (Note 26) - - (27) - 27 -
Balance at 31 March 2025 63 5,268 575 1,738 2,351 9,995
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March 2025
2025 2024
Note £'000 £'000
Profit for the year 984 84
Adjustments for:
Income tax expense 11 317 123
Net interest income (59) (214)
Depreciation of property, plant and equipment 16 169 144
Amortisation of intangible assets 15 185 59
Share-based payment expense 26 104 299
Impairment of loans due from associated undertakings 62 130
Operating cash flows before movements in working capital 1,762 625
Increase in trade and other receivables (228) (589)
Increase / (decrease) in trade and other payables 565 (32)
(Increase) / decrease in amounts owed from associates in relation to profit (88) 81
share
Cash generated by operations 2,011 85
Income taxes paid (599) (241)
Net cash inflow / (outflow) from operating activities 1,412 (156)
Investing activities
Purchases of IP and trademarks 15 - (7)
Purchases of property, plant and equipment 16 (61) (43)
Acquisition of subsidiary, net of cash acquired 14 (3,516) (1,180)
Net cash used in investing activities (3,577) (1,230)
Financing activities
Loan financing received 2,738 -
Dividends paid 12 (407) (687)
Lease payments 25 (178) (113)
Lease receivable amounts received ( ) 25 61 5
Net interest received ( ) 56 233
Share issue costs (54) (4)
Net cash generated / (used) in financing activities 2,216 (566)
Net increase / (decrease) in cash and cash equivalents 51 (1,952)
Cash and cash equivalents at beginning of year 2,632 4,584
Cash and cash equivalents at end of year 2,683 2,632
COMPANY CASH FLOW STATEMENT
For the year ended 31 March 2025
2025 As restated
(See Note 30)
2024
Note £'000 £'000
Profit for the year 798 132
Adjustments for:
Income tax expense 236 123
Net interest income (68) (226)
Depreciation of property, plant and equipment 16 37 27
Amortisation of intangible assets 15 43 59
Share-based payment expense 26 104 299
Impairment of loans due from associated undertakings 62 130
Operating cash flows before movements in working capital 1,212 544
Increase in trade and other receivables (212) (616)
Increase / (decrease) in trade and other payables 447 (30)
(Increase) / decrease in amounts owed from associates in relation to profit (88) 81
share
Cash generated / (used) by operations 1,359 (21)
Income taxes paid (131) (241)
Net cash inflow / (outflow) from operating activities 1,228 (262)
Investing activities
Purchases of IP and trademarks 15 - (7)
Purchases of property, plant and equipment 16 (32) (36)
Investments in the period including acquisition costs 14 (3,776) (1,180)
Net cash used in investing activities (3,808) (1,223)
Financing activities
Loan financing received 2,738 -
Dividends paid 12 (407) (687)
Lease payments 25 (67) (4)
Lease receivable amounts received ( ) 25 61 5
Net interest received ( ) 50 226
Share issue costs (54) (4)
Net cash generated / (used) in financing activities 2,321 (464)
Net decrease in cash and cash equivalents (259) (1,949)
Cash and cash equivalents at beginning of year 2,615 4,564
Cash and cash equivalents at end of year 2,356 2,615
NOTES TO THE FINANCIAL STATEMENTS
1. General information
DSW Capital plc, registered as a public company in England and Wales, with
registered number: 07200401. The principal activity of the Company and its
subsidiaries, DSW Services LLP, DSW Operations Limited and DR Solicitors
Limited (together referred to as the 'Group') is the licensing of the Dow
Schofield Watts and associated brand names for use in the professional
services sector, whilst providing legal services under the DR Solicitors brand
name.
The address of the Company's registered office is:
7400 Daresbury Park
Daresbury
Warrington
WA4 4BS
The Financial Statements are presented in Pounds Sterling (£), which is the
currency of the economic environment in which the group operates. All
amounts are rounded to the nearest £'000 except where noted.
2. Accounting policies
Basis of Preparation
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined by section 434 of the Companies Act 2006.
The results for the year ended 31 March 2025 have been extracted from the full accounts of the Group for that year which received an unqualified auditor's report and which have not yet been delivered to the Registrar of Companies. This preliminary financial information has been prepared on the same basis as the accounting policies adopted in those financial statements but does not include all the disclosures required in financial statements prepared in accordance with UK adopted International Accounting Standards and accordingly does not itself comply with UK adopted International Accounting Standards. The audited financial statements for the year ended 31 March 2025 were approved by the Directors on 7 July 2025.
The financial information for the year ended 31 March 2024 is derived from the statutory accounts for that year, which have been delivered to the Registrar of Companies. The report of the auditor on those filed accounts was unqualified.
The accounts for the year ended 31 March 2025 and 31 March 2024 did not contain a statement under s498 (1) to (4) of the Companies Act 2006. The statutory accounts for the year ended 31 March 2025 will be distributed to shareholders on 12 August 2025, in advance of the Annual General Meeting and made available on our website (https://dswcapital.com/investors/) or on request by contacting the Company Secretary at the Company's Registered Office.
Statement of Compliance
The Group financial statements have been properly prepared in accordance with
UK adopted international accounting standards; the Parent Company financial
statements have been properly prepared in accordance with UK adopted
international accounting standards and has applied in accordance with the
provisions of the Companies Act 2006.
The preparation of financial statements in compliance with adopted UK IFRS
requires the use of certain critical accounting estimates. It also requires
Group management to exercise judgment in applying the Group's accounting
policies. The areas where significant judgments and estimates have been made
in preparing the financial statements and their effect are disclosed in Note
3.
Impact of the initial application of other new and amended IFRS Standards that
are effective for the current year
In the current year, the Group has applied a number of amendments to IFRS
accounting standards issued by the International Accounting Standards Board
(IASB) that are mandatorily effective for an accounting period that begins on
or after 1 January 2024. Their adoption has not had any material impact on the
disclosures or on the amounts reported in these financial statements.
· Amendment to IAS 1 - Classification of Liabilities as Current or
Non-Current
· Amendment to IFRS 16 - Lease Liability in a Sale and Leaseback
· Amendment to IAS 1 - Non-Current Liabilities with Covenants
· Amendment to IAS 7 and IFRS 7 - Supplier Finance Arrangements
New and revised IFRS Standards in issue but not yet effective
In preparing these financial statements, the Group has not applied the
following new and revised IFRS Standards that have been issued but are not yet
effective.
· Amendments to IAS 21 - Lack of Exchangeability
· Amendments to SASB standards to enhance their international
applicability
· IFRS S1 - General Requirements for Disclosure of Sustainability
Related Financial Information
· IFRS S2 - Climate-related Disclosures
· IFRS 18 - Presentation and Disclosure in Financial Statements
The Directors do not expect the adoption of the Standards listed above will
have a material impact on the financial statements of the Group in future
periods.
Basis of accounting
The Financial Statements have been prepared on the historical cost basis,
except for the revaluation of financial instruments that are measured at
revalued amounts or fair values at the end of each reporting period, as
explained in the accounting policies below. Historical cost is generally based
on the fair value of the consideration given in exchange for goods and
services.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date, regardless of whether that price is directly observable
or estimated using another valuation technique.
In the prior years consolidated financial statements, the parent company
cashflow statement was excluded in error. This has been rectified in the
current year, with comparatives. There is no impact on net assets or profit
measures.
The principal accounting policies adopted are set out below.
Going concern
In considering the appropriateness of the going concern basis of preparation,
the Directors have considered the cash balance and the forecasts for the next
twelve months following the date of this report, which includes detailed cash
flow forecasts and working capital availability. These forecasts show that
sufficient resources remain available to the business for the foreseeable
future in order to meet its operational and financial obligations as they fall
due.
The Group has a significant cash balance of £2.7m, has a model which is
strongly cash generative and a limited fixed cost base. At 31 March 2025, the
Group has net assets of £10.0m (2024: £7.6m) and net current assets of
£3.8m (2024: £4.3m) which reflects the strong financial position for the
Group. In addition, the Group is profitable with adjusted profit after tax of
£1.1m in the year ended 31 March 2025.
The Group has prepared detailed cash flow forecasts and stress-tested various
scenarios, all of which indicate that the Group will maintain adequate
liquidity throughout the forecast period. Furthermore, the Group remains in
full compliance with all financial covenants associated with its borrowing
facilities. Based on current forecasts and financial performance, management
expects to continue to meet these covenants for the foreseeable future.
As such, the Group financial statements have been prepared on a going concern
basis as the Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable
future.
Basis of consolidation
The consolidated Financial Statements incorporate the Financial Statements of
the Company and entities controlled by the Company (its subsidiaries) made up
to 31 March each year. Control is achieved when the Company:
· has the power over the investee;
· is exposed, or has rights, to variable returns from its involvement
with the investee; and
· has the ability to use its power to affects its returns.
The Company reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control listed above.
When the Company has less than a majority of the voting rights of an investee,
it considers that it has power over the investee when the voting rights are
sufficient to give it the practical ability to direct the relevant activities
of the investee unilaterally. The Company considers all relevant facts and
circumstances in assessing whether or not the Company's voting rights in an
investee are sufficient to give it power, including:
· the size of the Company's holding of voting rights relative to the
size and dispersion of holdings of the other vote holders;
· potential voting rights held by the Company, other vote holders or
other parties;
· rights arising from other contractual arrangements; and
· any additional facts and circumstances that indicate that the Company
has, or does not have, the current ability to direct the relevant activities
at the time that decisions need to be made.
All intragroup assets and liabilities, equity, income, expenses and cash flows
relating to transactions between the members of the Group are eliminated on
consolidation.
Investments in subsidiaries are recognised at cost in the statement of
financial position of the parent company.
Investments in associates and jointly controlled entities
An associate is an entity over which the Group has significant influence and
that is neither a subsidiary nor an interest in a jointly controlled entity.
Significant influence is the power to participate in the financial and
operating policy decisions of the investee but is not control or joint control
over those policies.
A jointly controlled entity is a joint arrangement whereby the parties that
have joint control of the arrangement have rights to the net assets of the
joint arrangement. Joint control is the contractually agreed sharing of
control of an arrangement, which exists only when decisions about the relevant
activities require unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or jointly controlled
entities are incorporated in these Financial Statements using the equity
method of accounting.
Under the equity method, an investment in an associate or a jointly controlled
entity is recognised initially in the consolidated statement of financial
position at cost and adjusted thereafter to recognise the Group's share of the
profit or loss and other comprehensive income of the associate or jointly
controlled entity. The Group's share of the profit or loss is driven by the
contractual arrangements in place. The Group's share of the profit or loss is
defined by the economic interest in the associate or jointly controlled entity
as stipulated in the legal arrangements, which differs from the percentage
voting rights held.
The requirements of IAS 36 are applied to determine whether it is necessary to
recognise any impairment loss with respect to the Group's investment in an
associate or a jointly controlled entity. When necessary, the entire carrying
amount of the investment is tested for impairment in accordance with IAS 36 as
a single asset by comparing its recoverable amount (higher of value in use and
fair value less costs of disposal) with its carrying amount.
The Group discontinues the use of the equity method from the date when the
investment ceases to be an associate or a jointly controlled entity.
Other Investments
Where long-term loans are made to licensees, the Directors of the Company have
accounted for them as investments under IFRS 9. These loans are accounted for
using the amortised cost method. See note 3 for associated critical judgements
involved in determining the appropriate classification of long-term loans to
licensees.
To determine the fair value of the long-term loans, the Directors of the
Company uses the discounted cashflow valuation technique. Differences may
arise between the transaction price of the loan at initial recognition and the
amount determined at initial recognition using the valuation technique. Any
such differences are capitalised in prepayments and accrued income where they
are held as Contract Assets and amortised over the loan term.
Revenue recognition
Revenue comprises revenue recognised by the Group in respect of services
supplied during the year, exclusive of Value Added Tax.
The Group recognises revenue from the following major sources:
· Licence fee income
· Profit share income
· Provision of legal services
Licence fee income is recognised at the point at which the performance
obligations, as defined by the contractual arrangements, have been satisfied
which is primarily when revenue has been invoiced by the licensees over time.
Profit share income is only recognised at the point at which the risk of
reversal is deemed to be remote.
Revenue from the provision of legal services is either generated from variable
or fixed fee matters. Revenue is recognised on variable fee matters in line
with the hours recorded by a consultant and invoiced on a monthly basis in
accordance with the terms of business. Revenue is recognised on fixed fee
matters based on the respective stage of completion of each matter. This is
determined by taking into account the time elapsed, a review of the
performance to date, and milestones reached.
Leases
As a lessee
The Group applies IFRS 16 to account for leases. At inception of a contract,
the Group assesses whether a contract is, or contains, a lease. A contract is,
or contains, a lease if the contract conveys the right to control the use of
an identified asset for a period of time in exchange for consideration.
The Group recognises a right-of-use asset and a lease liability at the lease
commencement date. The right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to restore the underlying asset, less
any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the useful life
of the right-of-use asset or the end of the lease term. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liabilities.
The lease liability is initially measured at the present value of lease
payments that were not paid at the commencement date, discounted using the
Group's incremental borrowing rate. The average incremental borrowing rate
applied to lease liabilities during the year is 7.80%.
The lease liability is measured at amortised cost using the effective interest
method. If there is a remeasurement of the lease liability, a corresponding
adjustment is made to the carrying amount of the right-of-use asset or is
recorded directly in profit or loss if the carrying amount of the right-of-use
asset is zero.
Short-term leases and low value assets
The Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases that have a lease term of 12 months or less
or leases of low value assets. These lease payments are expensed on a
straight-line basis over the lease term.
Dilapidations provision
The Group recognises a provision for the future costs of dilapidations on
leased office space. The provision is an estimate of the total cost to return
applicable office space to its original condition at the end of the lease
term.
As a lessor
The Group applies IFRS 16 to account for leases. When the Group acts as a
lessor, it determines at lease inception whether each lease is a finance lease
or an operating lease. Whenever the terms of the lease transfer substantially
all the risks and rewards of ownership to the lessee, the contract is
classified as a finance lease. All other leases are classified as operating
leases.
When the group is an intermediate lessor, it accounts for the head lease and
the sub-lease as two separate contracts. The sub-lease is classified as a
finance or operating lease by reference to the right-of-use asset arising from
the head lease.
Amounts due from lessees under finance leases are recognised as receivables at
the amount of the group's net investment in the leases. Finance lease income
is allocated to accounting periods so as to reflect a constant periodic rate
of return on the group's net investment outstanding in respect of the leases.
Subsequent to initial recognition, the Group regularly reviews the estimated
unguaranteed residual value and applies the impairment requirements of IFRS 9,
recognising an allowance for expected credit losses on the lease receivables.
Finance lease income is calculated with reference to the gross carrying amount
of the lease receivables, except for credit-impaired financial assets for
which interest income is calculated with reference to their amortised cost
(i.e. after a deduction of the loss allowance).
Operating profit
Operating profit is stated after charging the share of results of associates
and jointly controlled entities, but before finance income and finance costs.
Retirement and termination benefit costs
Payments to defined contribution retirement benefit plans are recognised as an
expense in the consolidated statement of comprehensive income in the periods
during which services are rendered by employees. Payments made to
state-managed retirement benefit plans are accounted for as payments to
defined contribution plans where the Group's obligations under the plans are
equivalent to those arising in a defined contribution retirement benefit plan.
Short-term and other long-term employee benefits
Wages, salaries, paid annual leave, sick leave and bonuses are accrued in the
period in which the associated services are rendered by employees of the
Group.
Taxation
The income tax expense represents the sum of the tax currently payable and
deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the consolidated statement of
comprehensive income because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Group's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the Financial
Statements and on unused tax losses or tax credits available to the Group.
Deferred tax is determined using tax rates and laws that have been enacted or
substantively enacted by the reporting date.
Property, plant and equipment
Property, plant and equipment is stated in the statement of financial position
at cost less accumulated depreciation and accumulated impairment loss.
Depreciation is charged so as to write off the cost of assets over their
estimated useful lives, as follows:
DSW
Office equipment 33% straight line
Office fixtures & fittings 20% straight line
DR Solicitors
Office equipment 25% reducing balance
Office fixtures & fittings 25% reducing balance
Leasehold improvements 25% reducing balance
The estimated useful lives, residual values and depreciation method are
reviewed at the end of each reporting period, with the effect of any changes
in estimate accounted for on a prospective basis.
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are
carried at cost less accumulated amortisation and accumulated impairment
losses. Amortisation is recognised on a straight-line basis over their
estimated useful lives which are disclosed below. The estimated useful life
and amortisation method are reviewed at the end of each reporting period, with
the effect of any changes in estimate being accounted for on a prospective
basis. The estimated useful life of intangible assets is as follows:
Intellectual property & Trademarks 10 - 25 years
Customer Relationships 8 years
Business Combinations
Acquisitions of businesses are accounted for using the acquisition method. The
consideration transferred in a business combination is measured at fair value,
which is calculated as the sum of the acquisition-date fair values of assets
transferred by the Group, liabilities incurred by the Group to the former
owners of the acquiree and the equity interest issued by the Group in exchange
for control of the acquiree. Acquisition-related costs, other than those
associated with the issue of debt or equity, are recognised in profit or loss
as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities
assumed are recognised at their fair value at the acquisition date.
Goodwill
Goodwill is measured at the acquisition date as the fair value of
consideration transferred, plus non-controlling interests and the fair value
of any previously held equity interests less the net recognised amount (which
is generally fair value) of the identifiable assets and liabilities assumed.
Goodwill is not amortised but is reviewed for impairment at least annually.
For the purpose of impairment testing, goodwill is allocated to each of the
Group's cash-generating units (or groups of cash-generating units) expected to
benefit from the synergies of the combination. Cash-generating units to which
goodwill has been allocated are tested for impairment annually, or more
frequently when there is an indication that the unit may be impaired. If the
recoverable amount of the cash-generating unit is less than the carrying
amount of the unit, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to the other
assets of the unit pro-rata on the basis of the carrying amount of each asset
in the unit. An impairment loss recognised for goodwill is not reversed in a
subsequent period.
Financial instruments
Financial assets and financial liabilities are recognised in the statement of
financial position when the Group becomes a party to the contractual
provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair
value, except for trade receivables that do not have a significant financing
component which are measured at transaction price. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial liabilities
at fair value through profit or loss) are added to or deducted from the fair
value of the financial assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through
profit or loss are recognised immediately in profit or loss.
Financial assets
The Group's financial assets include cash and cash equivalents, trade and
other receivables that arise from the business operations, loans to licensees,
accrued revenue and contract assets.
All financial assets are recognised and derecognised on a trade date where the
purchase or sale of a financial asset is under a contract whose terms require
delivery of the investment within the timeframe established by the market
concerned, and are initially measured at fair value, plus transaction costs.
All recognised financial assets are measured subsequently in their entirety at
amortised cost.
Classification of financial assets
Amortised cost and effective interest method
(a) Trade and other receivables
Trade receivables are stated at their original invoiced value. Trade
receivables are reduced by appropriate allowances for estimated irrecoverable
amounts. See Note 3 for details of the loss allowance.
(b) Loans owing from licensees
Loans are measured at amortised cost at their effective interest rates. The
amortised cost of a loan is the amount at which the loan is measured at
initial recognition minus the principal repayments, plus the cumulative
amortisation using the effective interest method of any difference between
that initial amount and the maturity amount, adjusted for any loss allowance.
The gross carrying amount of a financial asset is the amortised cost of a
financial asset before adjusting for any loss allowance.
(c) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and other short-term highly
liquid investments that are readily convertible to a known amount of cash and
are subject to insignificant risk of changes in value
(d) Accrued Revenue
Accrued revenue relates to work performed by consultants which is yet to be
billed and profit share income accrued from licensees. Accrued revenue
relating to work performed by consultants is calculated based on their hours
worked and measured at their original invoice price. Accrued income relating
to profit shares is calculated in line with the terms of the contract between
DSW Capital and the licensee based on their performance for the financial
year. Accrued revenue is disclosed within prepayments and accrued income. See
Note 20 for details.
(e) Contract Assets
Amounts relating to contract assets, which are disclosed within prepayments
and accrued income, are balances that can be classified as incremental costs
of obtaining a revenue contract. These include the breakout incentives which
provide businesses with an initial free-cash injection, as well as the
below-market element of loans offered to licensee businesses. Amortisation is
recognised on a straight-line basis over the life of the contract.
Interest income is recognised in profit or loss and is included in the
"finance income" line item (Note 9).
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on the
Group's loans to licensees and trade receivables. The amount of expected
credit losses is updated at each reporting date to reflect changes in credit
risk since initial recognition of the respective financial asset.
The expected loss rates for these financial assets are based on the Group's
historical credit losses experienced over the three-year period prior to the
period end. An additional portfolio expected loss provision is calculated in
which the historical loss rates are then adjusted for current and
forward-looking information on macroeconomic factors affecting the Group's
licensees. The Group has identified the changing insolvency rates in the UK as
the key macroeconomic factor.
(i) Definition of default
The Group considers when a licensee business is terminated or ceases to trade
as default events.
(ii) Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the probability of
default, loss given default (i.e., the magnitude of the loss if there is a
default), and the exposure at default. The assessment of the probability of
default and loss given default is based on historical data adjusted by
forward-looking information as described above. As for the exposure at
default, for financial assets, this is represented by the assets' gross
carrying amount at the reporting date.
For financial assets, the expected credit loss is estimated as the difference
between all contractual cash flows that are due to the Group in accordance
with the contract and all the cash flows that the Group expects to receive,
discounted at the original effective interest rate.
The Group recognises an impairment loss in the consolidated statement of
comprehensive income for all financial instruments with a corresponding
adjustment to their carrying amount through a loss allowance account.
Financial liabilities and equity
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or
as equity in accordance with the substance of the contractual arrangements and
the definitions of a financial liability and an equity instrument.
Financial liabilities
All financial liabilities are measured subsequently at amortised cost using
the effective interest method.
Financial liabilities are included in the statement of financial position as
trade and other payables and borrowings.
(a) Trade and other payables
Trade payables are stated at their original invoiced value. Accounts payable
are classified as current liabilities if the company does not have an
unconditional right, at the end of the reporting period, to defer settlement
of the creditor for at least twelve months after the reporting date. If there
is an unconditional right to defer settlement for at least twelve months after
the reporting date, they are presented as non-current liabilities.
(b) Borrowings
All borrowings are initially recorded at the amount of proceeds received, net
of transaction costs. Borrowings are subsequently carried at amortised cost
and the interest expense is recognised on the basis of the effective interest
method and is included in finance costs. Borrowings are classified as current
liabilities unless the Group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting date.
Dividend Policy
The Board has adopted a progressive dividend policy to reflect the expectation
of future cash flow generation and long-term earnings potential of the Group.
The Board may, however, revise the Group's dividend policy from time to time
in line with the actual results of the Group.
Dividends are recognised once they have been paid.
Related Party Transactions
Details of related party transactions entered into by members of the Group are
set out in Note 31.
Share-based payments
Equity-settled share-based payments to employees and others providing similar
services are measured at the fair value of the equity instruments at the grant
date. The fair value excludes the effect of non-market-based vesting
conditions. Details regarding the determination of the fair value of
equity-settled share-based transactions are set out in Note 26.
The fair value determined at the grant date of the equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Group's estimate of the number of equity instruments that will
eventually vest. At each reporting date, the Group revises its estimate of the
number of equity instruments expected to vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of the
original estimates, if any, is recognised in the consolidated statement of
comprehensive income such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to the share based payment reserve.
Finance Income
The Group's finance income includes interest income on long-term loans made to
licensees which is calculated using the effective interest method, and
interest received on cash and cash equivalents.
Merger Reserve
Where an acquisition has occurred through the issue of shares and acquiring
more than 90% of the share capital of the subsidiary, the excess of the fair
value of consideration received over the par value of ordinary shares issued
is recorded in a separate non-distributable reserve within equity.
3. Critical accounting judgements and key sources of estimation uncertainty
In applying the Group's accounting policies, which are described in Note 2,
the Directors are required to make judgements (other than those involving
estimations) that have a significant impact on the amounts recognised and to
make estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates
and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Critical judgements in applying the Group's accounting policies
The following are the critical judgements, apart from those involving
estimations (which are presented separately below), that the Directors have
made in the process of applying the Group's accounting policies and that have
the most significant effect on the amounts recognised in the Financial
Statements.
Consideration of control over a licensee
Where the Group holds voting rights in an underlying licensee, an assessment
of the ability to exert control over these entities is made based on whether
the Group has the practical ability to direct the relevant activities of these
entities unilaterally. Investments in associates have been recognised for
entities where the Group holds between 20% and 50% of the voting rights and
does not have any unilateral powers other than protective ones. Where the
Group has more than 20% of the voting rights, it is deemed to have significant
influence over the licensees and thus they are accounted for as investment in
associates.
There is one entity in which the Group has 51% of the voting rights and 16.7%
of the economic rights. However, all significant operational decisions require
the unanimous consent of the parties. As such this entity has been
recognised as an investment in a jointly controlled entity.
Classification of long-term loans to licensees
Where long-term loans are made to licensees, these are accounted for as
investments under IFRS 9 using the amortised cost method. The long-term loans
provided to licensees have 20-year terms and are only repayable at the end of
the term and therefore in substance, are more akin to investments. The average
interest rate is 6.1%.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the reporting period that may have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are discussed below.
Calculation of expected loss allowance for related party loans
When measuring expected credit loss ("ECL"), the Group uses reasonable and
supportable forward-looking information, which is based on assumptions for the
future movement of different economic drivers and how these drivers will
affect each other.
Probability of default constitutes a key input in measuring ECL. Probability
of default is an estimate of the likelihood of default over a given time
horizon, the calculation of which includes historical data, assumptions and
expectations of future conditions for the licensee business.
The Group assesses each licensee individually as to the probability of default
on their loans based on their cash balances and their ability to pay the cash
flows due.
Also, the Group has elected to calculate an additional portfolio expected loss
provision in which the historical loss rates are adjusted for current and
forward-looking information on macroeconomic factors affecting the Group's
licensees. The Group has identified the changing insolvency rates in the UK as
the key macroeconomic factor as the failure of corporates is deemed to be a
reasonable macroeconomic predictor for the likely failure of a licensee
business on a portfolio basis.
Goodwill and intangible assets
During the year, the Group acquired DR Solicitors, and in doing so recognised
customer relationships as an intangible asset on consolidation.
In attributing value to the intangible asset arising on acquisition,
management has made certain assumptions in terms of cash flows attributable to
customer relationships. To assist in this work, the Group engaged external
valuation experts to assess the fair value of the customer relationships and
management reviewed the work carried out and assessed the outcome.
The value of customer relationships has been estimated based on the estimated
net future revenues expected to be generated by them. The revenue estimations
rely on annual growth rates. Management have selected the appropriate rates
based on a combination of observed historical growth, industry benchmarks and
forecasted influencing factors. The use of different assumptions for the
expectations of future cash flows and the discount rate would change the
valuation of the intangible asset, with a resultant impact on the goodwill
recognised.
4. Revenue
The disclosure of revenue by product line is consistent with the revenue
information that is disclosed for each reportable segment under IFRS 8 (see
Note 5). All revenue is recognised over time.
Disaggregation of revenue
2025 2024
£'000 £'000
External revenue by product line
Licence Fee Income 3,238 2,183
Profit Share Income 191 128
Legal fee income 1,426 -
Total Revenue 4,855 2,311
A further breakdown of revenue by reporting line is shown below:
2025 2024
£'000 £'000
External revenue by reporting line
Licence fees attributable to Mergers & Acquisitions ('M&A') 2,490 1,475
Licence fees attributable to Other 748 708
Profit share attributable to M&A 182 119
Profit share attributable to Other 9 9
Legal fee Income 1,426 -
Total Revenue 4,855 2,311
5. Operating segments
Products and services from which reportable segments derive their revenues
Operating segments are reported in a manner consistent with the internal
reporting provided to the Chief Operating Decision Marker (CODM). The CODM,
who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Group's Chief Executive
Officer.
The Group has five reporting lines, identified above, which divide licence
fees and profit share income between those attributable to M&A and Other,
along with the legal fee income that was acquired in the year. The Group only
has two operating segments due to the nature of services provided across the
whole Group being revenue derived from licensing of the Dow Schofield Watts
brand and associated brand names for use in the professional services sector,
and legal fee income that was acquired in the year.
The segmental results for the year ended 31 March 2025 are as follows:
DSW Licensing DR Solicitors
£'000 £'000
Revenue 3,429 1,426
Operating profit 845 459
Finance Income 227 5
Finance Costs (173) -
Impairment of loans due from associated undertakings (62) -
Profit before tax 837 464
Taxation (201) (116)
Profit for the year after tax 636 348
The segmental results for the year ended 31 March 2024 are as follows:
DSW Licensing DR Solicitors
£'000 £'000
Revenue 2,311 -
Operating profit 123 -
Finance Income 236 -
Finance Costs (22) -
Impairment of loans due from associated undertakings (130)
Profit before tax 207 -
Taxation (123) -
Profit for the year after tax 84 -
Revenue in the period has been derived from the reporting lines as detailed in
Note 4.
Depreciation and amortisation are included in the Consolidated Statement of
Comprehensive Income for the years ended 31 March 2025 and 2024 as follows:
DSW Licensing DR Solicitors
£'000 £'000
31 March 2025
Depreciation and Amortisation 345 9
31 March 2024
Depreciation and Amortisation 203 -
The segment assets and liabilities at 31 March 2025 are as follows:
DSW Licensing DR Solicitors
£'000 £'000
Assets 14,665 810
Liabilities (4,816) (644)
The segment assets and liabilities at 31 March 2024 are as follows:
DSW Licensing DR Solicitors
£'000 £'000
Assets 8,588 -
Liabilities (1,000) -
Geographical information
The Group has operations in one geographic location, the United Kingdom, and
therefore the Group only has one reporting geographic operating segment. This
is in line with internal reporting.
Information about major customers
Included in revenues arising from Licence fees attributable to M&A are
revenues of approximately £0.93m (2024: £0.40m) which arose from licence fee
income from the Group's largest licensee. Only one other single licensee
contributed 10 per cent or more to the Group's licence fee revenue in 2025
(one in 2024).
6. Profit for the year
Profit for the year has been arrived at after charging/(crediting):
2025 2024
£'000 £'000
Depreciation of property, plant and equipment 169 144
Amortisation 185 59
Employee pension 18 25
Expected credit loss - licence fees 91 (7)
Expected credit loss - outstanding loans 62 130
Expected credit loss - profit share 4 (3)
7. Auditor's remuneration
2025 2024
£'000 £'000
Audit of the Group financial statements 110 66
Fees payable to the Company's auditors in respect of:
Accountancy services - 2
Total auditor's remuneration 110 68
Non-audit services in the prior period relate to iXBRL conversion work
performed on the company's financial statements for corporation tax purposes.
8. Staff costs
The average number of persons employed by the Group (including Directors)
during the year, analysed by category was as follows:
2025 2024
Number Number
Central Heads 19 15
19 15
Their aggregate remuneration comprised:
2025 2024
£'000 £'000
Wages and salaries 1,312 881
Social security costs 148 118
Other pension costs (see note 27) 18 25
1,478 1,024
'Other pension costs' relate to the defined contribution plan charge as
detailed in Note 27.
Aggregate Directors' remuneration
2025 2024
£'000 £'000
Wages and salaries 636 524
Social security costs 68 66
Other pension costs (see note 27) 2 18
706 608
The highest paid Director's total emoluments in the year were £218,750 (2024:
£225,500) of which £nil (2024: £nil) related to pension costs.
Directors' transactions
Dividends totalling £406,796 were paid in the year in respect of ordinary
shares (2024: £687,362). Of the dividends, £84,532 (2024: £182,099) were
paid to Directors of the Company who were currently serving at the time of
payment. See Note 12 for details.
9. Finance income
2025 2024
£'000 £'000
Interest income:
Loan Interest 130 124
130 124
Other finance income 102 112
Total finance income 232 236
10. Finance costs
2025 2024
£'000 £'000
Interest costs on lease (22) (18)
Loan interest (147) -
Other finance costs (4) (4)
(173) (22)
11. Income Tax
2025 2024
£'000 £'000
Corporation income tax:
Current year 381 135
Adjustments in respect of prior years (25) (19)
356 116
Deferred tax (see note 22)
Origination and reversal of temporary differences (39) 7
317 123
The standard rate of corporation tax applied to reported profit is 25% (2024:
25%).
The charge for the year can be reconciled to the profit before tax as follows:
2025 2024
£'000 £'000
Profit before tax on continuing operations 1,301 207
Tax at the UK corporation tax rate of 25% (2024: 25%) 325 52
Tax effect of expenses that are not deductible in determining taxable profit 5 5
and reversal of prior year expenses not deducted previously
Depreciation and amortisation in excess of capital allowances 47 -
Other tax effects 2 12
Tax effect of adjustments in relation to prior periods (25) (19)
Tax effect of income not taxable in determining taxable profit (24) (9)
Movement in deferred tax assets/liabilities (39) 7
Tax effect of share based payment adjustment 26 75
Tax expense for the year 317 123
12. Dividends
2025 2024
Amounts recognised as distributions to equity holders in the year: £'000 £'000
Dividend for the year to 31 March 2025 consisting of:
Final dividend for the year to 31 March 2024 of £0.0075 per share (2023: 161 421
£0.02 per share)
Interim dividend for the year to 31 March 2025 of £0.01 per share (2024: 246 266
£0.0125 per share)
407 687
Final dividend for the year to 31 March 2025 of £0.02 per share (2024: 503 164
£0.0075 per share)
503 164
The proposed final dividend is subject to approval by shareholders at the
Annual General Meeting and has not been included as a liability in these
financial statements. The dividend record date is 12 September 2025 and the
dividend payment date is 3 October 2025. The ex-dividend date is 11 September
2025.
13. Earnings per share
From continuing operations
The calculation of the basic and diluted earnings per share is based on the
following data:
2025 2024
Earnings £'000 £'000
Earnings for the purposes of basic earnings per share being net profit 984 84
attributable to owners of the Company
Effect of dilutive potential ordinary shares: - -
Earnings for the purposes of diluted earnings per share 984 84
2025 2024
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings 22,696,074 21,158,039
per share
Effect of dilutive potential ordinary shares:
Share Options 402,895 768,321
Weighted average number of ordinary shares for the purposes of diluted 23,098,969 21,926,360
earnings per share
From continuing operations
2025 2024
Earnings £ £
Basic earnings per share 0.04 0.004
Diluted earnings per share 0.04 0.004
Adjusted earnings per share is included as an Alternative Performance Measure
('APM') and is not presented in accordance with IAS 33. It has been calculated
using adjusted earnings calculated as profit after tax but before:
· Share-based payments expense;
· Acquisition costs; and
· The tax effect of the above items
The calculation of adjusted basic and adjusted diluted earnings per share is
based on:
2025 2024
£'000 £'000
Profit after tax on continuing operations 984 84
Adjusted for:
Share-based payment expense 104 299
Acquisition costs 25 -
Adjusted earnings for the purposes of adjusted basic and adjusted diluted 1,113 383
earnings per share
2025 2024
Earnings £ £
Adjusted basic earnings per share 0.05 0.02
Adjusted diluted earnings per share 0.05 0.02
Tax adjustments of £nil (2024: £nil) have been made in arriving at the
adjusted earnings per share. This is based on an estimated full year
equivalent tax rate, which is largely driven by the UK corporation tax rate of
25% adjusted upwards to take into account the effect of non-deductible
expenses.
Shares held in trust are issued shares that are owned by the Group's employee
benefit trusts for future issue to employees as part of share incentive
schemes. The future exercise of the share awards and options is the dilutive
effect of share awards granted to employees that have not yet vested.
Shares held in trust are deducted from the weighted average number of shares
for basic earnings per share. For its adjusted basic measure, the group uses
the weighted average number of ordinary shares.
14. Acquisition of subsidiary company
On 1 November 2024, the Group acquired 100% of the issued share capital of DR
Solicitors Limited, in exchange for total consideration of £6,291k.
Consideration was satisfied by cash consideration of £3,776k, new shares
issued in DSW Capital plc with a value of £1,800k, and the assumption of an
overdrawn Director's Loan Account with a value of £715k.
DR Solicitors is an award winning, nationally recognised law firm, which
provides services to GPs, consultants and other primary care providers in the
UK. DR Solicitors Limited was acquired to bring a highly scalable, cash
generative, and profitable Legal Platform to the Group. The amounts recognised
in respect of assets acquired and liabilities assumed are £2,579k. This
results in goodwill arising of £3,712k.
The transaction with DR Solicitors qualified as a business combination as
defined in IFRS 3. The business combination is accounted for using the
acquisition accounting method as at the acquisition date, which is the date at
which control is transferred to the Group.
The fair value of the assets and liabilities and the associated goodwill
arising from the acquisition are as follows:
Asset/Liability £'000
Property, plant and equipment 37
Cash and cash equivalents 260
Trade and Other Receivables 1,131
Trade and Other Payables (888)
Deferred Tax Liability (8)
Intangible assets acquired 2,729
Deferred tax liabilities on intangible assets (682)
Total identifiable assets acquired, and liabilities assumed 2,579
Goodwill 3,712
Purchase consideration 6,291
Purchase consideration satisfied by:
Cash consideration 3,776
Equity consideration 1,800
Assumption of overdrawn Director's Loan Account 715
The goodwill of £3.712k is attributable to the synergies that are expected to
be achieved from incorporating the business into the Group operations, and the
expectations of generating new customer relationships and cross selling
services across the DSW Network.
Goodwill is measured at the acquisition date as the fair value of
consideration transferred, plus non-controlling interests and the fair value
of any previously held equity interests less the net recognised amount (which
is generally fair value) of the identifiable assets and liabilities assumed.
Goodwill is subject to an annual review for impairment (or more frequently if
necessary) in accordance with our accounting policies. Any impairment is
charged to the income statement as it arises.
The following intangible asset was recognised at acquisition. This has been
measured at its fair value using an income based approach.
DR Solicitors
£'000
Customer relationships 2,729
Total fair value of intangibles on acquisition 2,729
Deferred tax recognised as a result of the intangibles (682)
Total fair value of acquisition 2,047
Cash flows arising from the acquisition were as follows:
DR Solicitors
£'000
Initial cash consideration 3,776
Cash and cash equivalents acquired (260)
Acquisition of subsidiary, net of cash acquired 3,516
Transaction costs 341
Net cash outflow in the year 3,857
The table below outlines the Revenue and Profit Before Tax of DR Solicitors
since the acquisition date, which is included in the consolidated statement of
comprehensive income for the year.
DR Solicitors
£'000
Revenue contributed post-acquisition 1,426
Profit before tax contributed post-acquisition 465
Transaction costs comprised mainly advisor and legal fees. These costs relate
to issuing debt and equity instruments and have been recognised in accordance
with IFRS 9 and IAS 32.
15. Intangible assets
Customer Relationships Intellectual Property & Trademarks
Goodwill Total
Group: £'000 £'000 £'000 £'000
Cost
At 1 April 2023 - - 907 907
Additions - - 7 7
Disposals - - (49) (49)
At 31 March 2024 - 865 865
Additions - - - -
On acquisition of DR Solicitors 2,729 3,712 - 6,441
Disposals - - - -
At 31 March 2025 2,729 3,712 865 7,306
Amortisation
At 1 April 2023 - - 159 159
Charge for the year - - 59 59
Disposals - - (49) (49)
At 31 March 2024 - - 169 169
Charge for the year 142 - 43 185
Disposals - - - -
At 31 March 2025 142 - 212 354
Carrying amount
At 31 March 2024 - - 696 696
At 31 March 2025 2,587 3,712 653 6,952
Intellectual property relates to assets acquired on which licence fees are
charged. £614k of the carrying amount as at 31 March 2025 (2024: £645k)
relates to Camlee Group. Management have determined that the present value of
future cashflows to be derived from the respective licence fee income is
greater than the carrying amount and, as such, the intellectual property does
not need to be impaired.
Customer relationships are amortised over an eight-year period which is the
estimated average length of the underlying relationships. At 31 March 2025,
the remaining amortisation period for customer relationships is 7.6 years.
Goodwill acquired in a business combination is allocated, at acquisition, to
the cash generating units ("CGUs") that are expected to benefit from that
business combination. For the purposes of goodwill impairment testing, the
Group allocates the carrying amount of goodwill of £3,712k to the single CGU
present in DR Solicitors, which is the provision of legal services.
The recoverable amount of the Group's goodwill has been determined by a value
in use calculation using a discounted cash flow model. The Group has prepared
cash flow forecasts derived from the most recent financial budgets approved by
management for the next eight years after which cash flows are extrapolated
using a terminal value calculation base on an estimated growth rate of 2%.
Management have used eight-year forecasts, as this reflects the repeat
customer lifecycle based on historic retention rates.
The key assumptions for the value in use calculations are those regarding
growth rates for the Group's revenues from legal services, customer retention
rates and the discount rate. Management estimates discount rates using
post-tax rates that reflect current market assessments of the time value of
money and the risks specific to the CGU.
The discount rate used to discount the forecast cash flows is based on a
post-tax estimated weighted average cost of capital of 20.7%. The pre-tax
estimated weighted average cost of capital is 21.1%.
Revenue growth over the eight years of the forecast period reflects, for FY26,
the current run rate of revenue from the CGU, with anticipated growth and
customer retention rates in FY27 - FY33 reflective of the loyal customer base.
The long term growth rate of 2% is based on UK economic growth forecasts.
The Group has carried out a sensitivity analysis on the impairment review
which shows that due to the proximity of the acquisition to the year end, the
analysis is sensitive to the discount rate and a movement of 0.5% would
indicate an impairment of £24k.
Intangible assets - Company
Intellectual Property & Trademarks
Total
Company £'000 £'000
Cost
At 1 April 2023 907 907
Additions 7 7
Disposals (49) (49)
At 31 March 2024 865 865
Additions - -
Disposals - -
At 31 March 2025 865 865
Amortisation
At 1 April 2023 159 159
Charge for the year 59 59
Disposals (49) (49)
At 31 March 2024 169 169
Charge for the year 43 43
Disposals - -
At 31 March 2025 212 212
Carrying amount
At 31 March 2024 696 696
At 31 March 2025 653 653
Intellectual property relates to assets acquired on which licence fees are
charged. £614k of the carrying amount as at 31 March 2025 (2024: £645k)
relates to Camlee Group. Management have determined that the present value of
future cashflows to be derived from the respective licence fee income is
greater than the carrying amount and, as such, the intellectual property does
not need to be impaired.
16. Property, plant and equipment - Group
Right of Use Assets Office Fixtures, Fittings & Equipment Total
£'000 £'000 £'000
Cost
At 1 April 2023 531 264 795
Additions 24 43 67
At 31 March 2024 555 307 862
Additions 5 61 66
On acquisition of DR Solicitors - 37 37
Disposals - (2) (2)
At 31 March 2025 560 501 963
Accumulated depreciation
At 1 April 2023 157 198 355
Charge for the year 109 35 144
At 31 March 2024 266 233 499
Charge for the year 117 52 169
On acquisition of DR Solicitors - - -
Eliminated on disposal - (2) (2)
At 31 March 2025 383 381 666
Carrying amount
At 31 March 2024 289 74 363
At 31 March 2025 177 120 297
Company
Office Fixtures, Fittings & Equipment Total
Right of Use Asset
£'000 £'000 £'000
Cost
At 1 April 2023 - 156 156
Additions 16 35 51
At 31 March 2024 16 191 207
Additions - 33 33
Disposals - (2) (2)
At 31 March 2025 16 222 238
Accumulated depreciation
At 1 April 2023 - 116 116
Charge for the year 1 26 27
At 31 March 2024 1 142 143
Charge for the year 5 32 37
Eliminated on disposal - (2) (2)
At 31 March 2025 6 172 178
Carrying amount
At 31 March 2024 15 49 64
At 31 March 2025 10 50 60
17. Associates
As none of the individual associates are deemed to be material associates,
they have been grouped together in aggregate below.
Aggregate information of associates that are not individually material
2025 2024
£'000 £'000
The Group's share of profit from continuing operations 110 120
The Group's share of profit and total comprehensive income 110 120
Change in the Group's ownership interest in an associate
Where the Company is a member of a licensee's business, a profit share
arrangement is in place which entitles the Company to profits over a
contractual threshold which is stated within an LLP agreement. The Group
accounts for associates based on their economic share as stated in the legal
agreements, rather than based on the Company's voting rights. Therefore, the
accounting always mirrors the economic arrangement. When there is a change in
profit share, this is not deemed to constitute a change in the Group's
ownership interest in an associate as this relates to a change in economic
interest only, hence there is no change to the equity accounting basis. A
change in the Group's ownership interest therefore is only recognised where
there is a change in the Company's voting rights.
18. Jointly controlled entities
The jointly controlled entity is not deemed to be a material jointly
controlled entity.
Information of jointly controlled entity that is not individually material
2025 2024
£'000 £'000
The Group's share of profit from continuing operations 96 56
The Group's share of profit and total comprehensive income 96 56
19. Investments - Group
2025 2024
£'000 £'000
Investment in Associates 182 145
Investment in jointly controlled entities 73 21
Other investments 1,507 1,499
Total Investments 1,762 1,665
Where long-term loans are made to licensees, which are disclosed within "Other
investments" above, the Directors of the Company have accounted for them as
investments under IFRS 9. These loans are accounted for using the amortised
cost method.
The movement in Investment in Associates and Investment in jointly controlled
entities is included in the cashflow statement as increase in amounts due from
associates.
Investments - Company
2025 2024
£'000 £'000
Investment in Associates 182 145
Investment in jointly controlled entities 73 21
Investment in subsidiary company 6,291 -
Other investments 1,507 1,499
Total Investments 8,053 1,665
Where long-term loans are made to licensees, which are disclosed within "Other
investments" above, the Directors of the Company have accounted for them as
investments under IFRS 9. These loans are accounted for using the amortised
cost method.
The movement in Investment in Associates and Investment in jointly controlled
entities is included in the cashflow statement as increase in amounts due from
associates.
Details on the acquisition of DR Solicitors can be found in Note 14.
The principal subsidiaries of the Company, all of which have been included in
these consolidated financial statements, are as follows:
Name Country of incorporation and principal place of business Proportion of ownership
2025 2024
DSW Services LLP 7400 Daresbury Park, Daresbury, Warrington, WA4 4BS, United Kingdom 99% 99%
DSW Operations Ltd 7400 Daresbury Park, Daresbury, Warrington, WA4 4BS, United Kingdom 100% 100%
DR Solicitors Ltd Weybourne House, Hitherbury Close, Guildford GU2 4DR, United Kingdom 100% 0%
20. Trade and other receivables
Company 2025 Company 2024 Group 2025 Group 2024
£'000 £'000 £'000 £'000
Trade receivables 1,360 893 1,534 914
Loss allowance (166) (75) (180) (75)
1,194 818 1,354 839
Other receivables 1,192 1,346 1,192 1,346
Loss Allowance (429) (368) (429) (368)
763 978 763 978
Prepayments and Accrued Income 1,206 1,194 1,596 1,260
Loss Allowance (13) (8) (13) (8)
1,193 1,186 1,583 1,252
3,150 2,982 3,700 3,069
Amounts due from subsidiary undertakings 155 130 - -
3,305 3,112 3,700 3,069
Included in prepayments and accrued income for both the company and the group
are contract assets amounting to £744k (2024: £800k) due in greater than one
year. Also include in prepayments and accrued income for the Group is
accrued revenue which relates to work performed by consultants, and profit
share due from licensees.
Other receivables are made up from loans due from licensees. Amounts due from
subsidiary undertakings, in other receivables on the company statement of
financial position, are interest free and repayable on demand and have been
classified as due in greater than one year, as the Group does not expect these
to be settled within the next 12 months.
Contract Assets
Amounts relating to contract assets, which are disclosed within prepayments
and accrued income above, are balances that can be classified as incremental
costs of obtaining a revenue contract. These include the breakout incentives
which provide businesses with an initial free-cash injection, as well as the
below-market element of loans offered to licensee businesses.
Amortisation is recognised on a straight-line basis over the life of the
contract. The average remaining length of contract to which these assets
relate is 21 years. In the year ended 31 March 2025, amortisation amounting to
£49k was recognised within admin expenses (year ended 31 March 2024: £14k
was recognised in admin expenses).
2025 2024
£'000 £'000
Contract assets
Breakout Incentives 330 369
Below Market Element of Loans to Licensees 428 438
758 807
Current 25 24
Non-Current 733 783
Total Investments 758 807
As discussed in Note 2, the Group uses the discounted cashflow valuation
technique to measure the fair value of the contract assets that are not traded
in an active market. However, in accordance with IFRS 13 and IFRS 9, the fair
value of an instrument at inception is generally the transaction price. If the
transaction price differs from the amount determined at inception using the
valuation technique, that difference is capitalised in prepayments and accrued
income. The differences yet to be recognised in profit or loss are as follows:
2025 2024
£'000 £'000
Balance at the beginning of the year 807 72
New transactions - 713
Restatement - 28
Amounts recognised in P&L (49) (6)
Balance at the end of the year 758 807
Trade receivables
The Group assessed each licensee individually as to their probability of
default based on previous credit loss history which is adjusted for current
and forward-looking information. It is not appropriate to group the licensee
trade receivable balances as there are specific circumstances associated with
each business, notably, service line, sector, location and maturity of the
business. The Group also elects to calculate an additional portfolio expected
loss provision in which the historical loss rates are adjusted for current and
forward-looking information on macroeconomic factors affecting the Group's
licensees.
Average Credit Period taken is 103 Days (2024: 131 days) and no interest has
been charged on the receivables.
The ageing of trade receivables including lifetime expected credit loss
provision at the reporting date was as follows;
Past due over 120 days
Past due 61 to 90 days Past due 91 to 120 days
31 March 2025 Not past due Total
£'000 £'000 £'000 £'000 £'000
Expected credit loss rate 3.1% 5.4% 22.9% 64.7% 11.7%
Gross carrying amount 1,244 37 35 218 1,534
Loss provision (29) (2) (8) (141) (180)
Net carrying amount 1,215 35 27 77 1,354
Past due over 120 days
Past due 61 to 90 days Past due 91 to 120 days
31 March 2024 Not past due Total
£'000 £'000 £'000 £'000 £'000
Expected credit loss rate 1.3% 11.1% 9.1% 30.1% 8.2%
Gross carrying amount 607 36 88 183 914
Loss provision (8) (4) (8) (55) (75)
Net carrying amount 599 32 80 128 839
The provision for impairment of trade receivables is the difference between
the carrying value and the present value of the expected proceeds. The
Directors consider that the carrying value of trade receivables approximates
to fair value.
21. Borrowings
Analysis of changes in net debt
01 April 2023 Cash flow Other non-cash changes 31 March 2024
Cash & bank balances 4,584 (1,952) - 2,632
Lease Liability (311) 113 (173) (371)
Net Debt 4,273 (1,839) (173) 2,261
01 April 2024 Cash flow Other non-cash changes 31 March 2025
Cash & bank balances 2,632 51 - 2,683
(371) 178 (27) (220)
Lease Liability
Bank loan - (3,000) - (3,000)
Debt issue costs 262 (33) 229
Net Debt 2,261 (2,509) (60) (308)
Balances at 31 March 2025 comprise: Current assets
£'000
Cash and bank balances 2,683
DSW Capital entered into a Revolving Credit Facility ("RCF") with Oaknorth
Bank plc on 31 October 2024. The RCF is for an initial 3-year term until 31
October 2027. The facility is for £3 million, and the full amount has been
drawn down to fund the acquisition of DR Solicitors. The RCF carries an
interest rate of 4.5% above the Bank of England base rate and is subject to
standard leverage and interest cover covenants. As at 31 March 2025, the Group
has sufficient headroom in the RCF and is compliant with the covenants.
22. Deferred tax - Group
The following are the major deferred tax liabilities and assets recognised by
the Group and movements thereon during the current and prior reporting period.
2025 2024
£'000 £'000
At the beginning of the year asset 2 9
Credited / (Charged) in the year 39 (7)
Liability acquired in the year (690) -
At the end of the year (liability) / asset (649) 2
Deferred tax - Company
The following are the major deferred tax liabilities and assets recognised by
the Group and movements thereon during the current and prior reporting period.
2025 2024
£'000 £'000
At the beginning of the year asset 2 9
Credited / (Charged) in the year 4 (7)
At the end of the year asset 6 2
23. Trade and other payables
Company Company Group Group
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Trade payables 211 81 499 192
Other taxation and social security 268 166 410 179
Amounts due to subsidiary company 715 - - -
Other payables 66 83 71 84
Accruals and Deferred Income 317 85 553 94
Corporation Tax 80 - 202 -
1,657 415 1,735 549
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The Group has financial risk management policies
in place to ensure that all payables are paid within the pre-agreed credit
terms.
The Directors consider that the carrying amount of trade payables approximates
to their fair value.
Amounts falling due in greater than one year include:
Company Company 2024 Group Group
2025 2025 2024
£'000 £'000 £'000 £'000
Bank loan 2,771 - 2,771 -
Dilapidation provision 1 1 85 80
2,772 1 2,856 80
The dilapidation provision relates to the estimated cost of returning a leased
property to its original state at the end of the lease in accordance with the
lease terms. The average lease term remaining is 1.75 years.
A £3m loan facility was agreed and drawn in the year with Oaknorth Bank plc
for the acquisition of DR Solicitors. Repayment is due in full 36 months from
the date of drawdown of the facility which was 1 November 2024. Interest is
payable on the facility at 4.5% plus Bank of England base rate which has a 2%
floor cap. Amounts shown and included in creditors > 1 year are net of the
loan facility fees that were paid in the year and will unwind over the period
of the loan.
24. Share capital - Group and Company
2025 2024
Number £'000 Number £'000
Authorised, issued and fully paid:
Ordinary shares 25,131,108 63 21,926,360 55
25,131,108 63 21,926,360 55
Number £'000
As at 31 March 2024 21,926,360 55
Share issue 3,204,748 8
As at 31 March 2025 25,131,108 63
On 5 November 2024, 3,204,748 consideration shares were issued in relation to
the acquisition of DR Solicitors (see note 14), and rank equally in all
respects with the existing ordinary shares of £0.0025 each.
Merger Reserve
As DSW Capital plc issued shares as part consideration to acquire 100% of the
issued Share Capital of DR Solicitors Limited merger relief applies. As such
the excess over the par value of ordinary shares, amounting to £1,738k, has
been recognised as a Merger reserve which is a non-distributable reserve.
25. Leases
DSW Services, a subsidiary of DSW Capital PLC, entered into a formal lease
arrangement for the Daresbury office, effective from 1 October 2021. Further
detail on the lease accounting policy can be found in note 2.
DSW Capital PLC entered into a lease agreement for a London-based office
space, effective from 8 February 2024. The majority of the leased office space
has been sub-let by DSW Capital PLC, with both the lease and sub-lease due to
expire after 3 years.
The consolidated statement of financial position and consolidated statement of
comprehensive income show the following amounts relating to leases:
Right-of-use assets Company Group
£'000 £'000
Balance at 1 April 2023 - 374
Additions in the year 16 24
Depreciation (1) (109)
Balance at 31 March 2024 15 289
Additions in the year - 5
Depreciation (5) (117)
Balance at 31 March 2025 10 177
Lease liabilities Company Group
£'000 £'000
Balance at 1 April 2023 - 311
New leases recognised in the year 147 155
Interest expense 2 18
Lease amounts invoiced and paid in the year (4) (113)
Balance at 31 March 2024 145 371
New leases recognised in year - 5
Interest expense 12 22
Lease amounts invoiced and paid in the year (67) (178)
Balance at 31 March 2025 90 220
Income Statement Company Company Group Group 2024
2025 2024 2025
£'000 £'000 £'000 £'000
Interest expense (note 10) 12 2 22 18
Expense relating to leases of low-value assets - - 12 9
Expense relating to short-term leases - - 80 63
12 2 114 90
As at the 31 March 2025, the Group recognised lease liabilities in respect of
outstanding commitments for future minimum lease payments under
non-cancellable lease contracts, which fall due as follows:
Company Company Group Group
2025 2024 2025 2024
£'000 £'000 £'000 £'000
Within one year 56 54 162 153
In one to two years 34 55 58 159
In two to three years - 36 - 59
90 145 220 371
The total cash outflow in the year paid in respect of leases was £178,000
(2024: £113,000). Under the terms of the lease, £111,567 per annum is
charged until the first break date in October 2026 on the Daresbury lease and
£62,216 per annum is charged on the London office lease.
Leases as a lessor
During the year to 31 March 2024, DSW Capital PLC entered into a lease
agreement for a London-based office space, effective from 8 February 2024. The
majority of the leased office space has been sub-let by DSW Capital PLC, with
both the lease and sub-lease due to expire after 3 years. The sub-lease is
classified as a finance sub-lease.
During the year, the Group recognised interest income on lease receivables of
£11k (2024: £2k).
The total cash inflow in the year in respect of the sub lease was £61,000
(2024: £5,000).
The group's finance lease arrangements do not include variable payments.
The following table sets out a maturity analysis of lease receivables, showing
the undiscounted lease payments to be received after the reporting date.
2025 2024
Amounts receivable under finance leases: £'000 £'000
Less than one year 55 59
In one to two years 33 56
In two to three years - 35
Total undiscounted lease receivable 88 150
Unearned finance income (7) (19)
Net investment in the lease 81 131
Undiscounted lease payments analysed as:
Recoverable after 12 months 33 91
Recoverable within 12 months 55 59
88 150
Net investment in the lease analysed as:
Recoverable after 12 months 31 82
Recoverable within 12 months 50 49
81 131
26. Share-based payments
In the year ended 31 March 2025, the Group operated one equity-settled
share-based payment plan as described below.
The Group recognised total expenses of £103,959 (2024: £299,412) in respect
of equity-settled share-based payment transactions in the year ended 31 March
2025.
The charge to the income statement is set out below:
Share plans: 31/03/2025 31/03/2024
Growth share plan - 254,012
PSP Awards 103,959 45,400
Total SBP expense 103,959 299,412
Share-based payments movement for the year ended 31 March 2025:
SBP Expense (£) SBP Reserve (£) Retained Earnings (£)
PSP Awards 103,959 (103,959) -
Reserve transfer of lapsed shares - 26,667 (26,667)
Total movement 103,959 (77,292) (26,667)
Share-based payments movement for the year ended 31 March 2024:
SBP Expense (£) SBP Reserve (£) Retained Earnings (£)
Growth share plan 254,012 (254,012) -
Reserve transfer of growth shares - 1,669,583 (1,669,583)
PSP Awards 45,400 (45,400) -
Total movement 299,412 (1,370,171) (1,669,583)
Details of Directors' share awards are set out in the Directors' Remuneration
report.
PSP Awards
The Board recognises the importance of ensuring that members of the Group are
effectively and appropriately incentivised and their interests aligned with
those of DSW Capital. Similarly, the Board believes that the ongoing success
of the DSW Network depends to a high degree on retaining and incentivising the
performance of its key people.
To that end, the Group has adopted the Performance Share Plan ("PSP"), to
align the interests of Executive Directors and key employees ("Participants")
with those of the Shareholders. The PSP will be a long-term incentive plan
which will form the primary long-term incentive arrangement for the Executive
Directors. The Remuneration and Nominations Committee will consider the
granting of PSP awards to the participants on an annual basis.
A summary of the structure of the rules of the Plan is set out below:
· Annual awards will be determined by reference to a number of shares
equal in value to a maximum of 200% of base salary of participants;
· Grants shall be subject to a three-year vesting period (subject to the
satisfaction of the performance conditions);
· Following vesting, there will be a further 24 month holding period
before participants are able to sell any Shares; and
· Awards are subject to malus and clawback provisions.
Challenging performance conditions are set for each PSP award at the
discretion of the Remuneration and Nominations Committee, which include
relative total shareholder return ("TSR") targets against an applicable
comparator group.
Awards outstanding at 31 March 2025 are shown below:
2025 2024
No. of share options No. of share options
Outstanding at beginning of year 340,656 512,185
Granted during the year 735,106 293,796
Forfeited during the year - (465,325)
Lapsed during the year (53,333) -
Outstanding at the end of the year 1,022,429 340,656
Exercisable at the end of the year - -
27. Retirement benefit plans
Defined contribution plans
The Group operates defined contribution retirement benefit plans for all
qualifying employees.
The Group is required to contribute a specified percentage of payroll costs to
the retirement benefit plan to fund the benefits. The only obligation of the
Group with respect to the retirement benefit plan is to make the specified
contributions.
The total expense recognised in profit or loss of £18,465 (2024: £24,929)
represents contributions payable to these plans by the Group at rates
specified in the rules of the plans. As at 31 March 2025 there was £3,347
(2024: £2,494) which had not been paid over to the plans and is included
within creditors due in less than one year.
28. Financial Instruments
In common with other businesses, the Group is exposed to risks that arise from
its use of financial instruments. This note describes the Group's objectives,
policies and processes for managing those risks and the methods used to
measure them. Further quantitative information in respect of these risks is
presented throughout these financial statements.
The significant accounting policies regarding financial instruments are
disclosed in Note 2. The principal financial instruments used by the Group,
from which financial instrument risk arises, are as follows:
Financial assets
Held at amortised cost
Company 2025 Company 2024 Group 2025 Group 2024
£'000 £'000 £'000 £'000
Cash and cash equivalents 2,356 2,615 2,683 2,632
Trade and other receivables 2,870 2,733 2,875 2,624
5,231 5,348 5,553 5,256
Financial Liabilities
Held at amortised cost
Company 2025 Company 2024 Group 2025 Group 2024
£'000 £'000 £'000 £'000
Trade and other payables 1,309 249 1,123 370
Bank loan 2,771 - 2,771 -
Lease Liabilities 90 145 220 371
4,170 394 4,114 741
There is no significant difference between the fair value and carrying value
of the financial instruments.
(a) Financial risk management objectives
The Board has overall responsibility for the oversight of the Group's risk
management framework. A formal process for reviewing and managing risk in the
business has been developed. A register of strategic and operational risk is
maintained and reviewed by the Board, who also monitor the status of agreed
actions to mitigate key risks. The Board's objective in managing financial
risks is to ensure the long-term sustainability of the Group.
The overall objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group's competitiveness and
flexibility. Further details regarding these policies are set out below:
(b) Credit risk management
Credit risk refers to the risk that the counterparty will default on its
contractual obligations resulting in financial loss to the Group. The Group's
credit risk is primarily attributable to its startup loans provided to
licensees. The Group mitigates this risk by encouraging ongoing engagement of
senior management with network members and monthly reporting which allows
close monitoring of emerging credit risks and facilitates early support and
advice to mitigate or remediate performance.
Credit risk with cash and cash equivalents is reduced by placing funds with
banks with high credit ratings.
(b)(i) Overview of the Group's exposure to credit risk
The Group recognises a loss allowance for expected credit losses on the
Group's loans to licensees and trade receivables.
The amount of expected credit losses is updated at each reporting date to
reflect changes in credit risk since initial recognition of the respective
financial asset. The expected loss rates for these financial assets are based
on the Group's historical credit losses experienced over the three-year period
prior to the period end.
An additional portfolio expected loss provision is calculated in which the
historical loss rates are then adjusted for current and forward-looking
information on macroeconomic factors affecting the Group's customers. The
Group has identified the changing insolvency rates in the UK as the key
macroeconomic factor.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses which uses a lifetime expected loss allowance for all trade receivables
and contract assets.
(c) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which has established an appropriate liquidity risk management
framework for management of the Group's short, medium and long-term funding
and liquidity management requirements. The Group manages liquidity risk by
maintaining adequate reserves and banking facilities and by continuously
monitoring forecast and actual cash flows.
Network members in difficulty are asked to provide short-term cash flow
forecasts on a monthly basis to support risk monitoring and potential funding
requirements and Partners may be asked to reduce drawings on a temporary
basis.
(c)(i) Liquidity and interest risk
There is no interest payable on trade payable balances and the operations of
the Group are not dependent on the finance income received.
The Group is using the cash inflows from the financial assets to manage
liquidity and has also secured £3 million RCF for an initial 3-year term
until 31 October 2027. The RCF carries an interest rate of 4.5% above the Bank
of England base rate and is subject to standard leverage and interest cover
covenants.
A sensitivity analysis is performed to assess the impact of an increase or
decrease in the Bank of England base rate. The Bank of England base rate is
currently 4.25%. Based on the sensitivity analysis performed, assuming the RCF
is fully drawn down, the impact on profit or loss and net assets of a 100
basis-point shift would be £30,000. The Directors are therefore satisfied
that the current exposure to interest rate fluctuations is reasonable and no
further risk management is currently proposed.
(d) Capital risk management
The Group considers its capital to comprise its ordinary share capital and
retained profits as its equity capital. In managing its capital, the Group's
primary objective is to provide return for its equity shareholders through
capital growth and future dividend income.
The Group's policy is to seek to maintain a gearing ratio that balances risks
and returns at an acceptable level and also to maintain a sufficient funding
base to enable the Group to meet its working capital and strategic investment
needs.
In making decisions to adjust its capital structure to achieve these aims,
either through new share issues or the issue of debt, the Group considers not
only its short-term position but also its long-term operational and strategic
objectives.
Details of the Group's capital are disclosed in the statement of changes in
equity and Note 24.
29. Events after the reporting period
Since the year end the Directors have recommended the payment of a final
ordinary dividend of £0.02 per share for the year ended 31 March 2025.
30. Prior period adjustment
In the prior year's consolidated financial statements, the parent company
cashflow statement was excluded in error. This omission resulted in non -
compliance with the UK adopted IFRS and the CA 2006 requirements, which give
no exemption from the presentation of a parent company cashflow statement.
This has been rectified in the current year financial statements, with the
disclosure of the parent company cashflow statement, including comparatives.
There is no impact on net assets or profit measures.
31. Related party transactions
Balances and transactions between the Company and its wholly owned
subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note. Transactions between the Group and its
related parties are disclosed below.
Related parties are those licensees where the Company is a member of the
related LLP.
Revenue and Cost Recharges
Group entities entered into the following transactions with related parties
who are not members of the Group. All entities other than DSW Investments 2
LLP are licensee businesses. DSW Investments 2 LLP is an entity owned by
current shareholders.
2025 2024
Revenue and Cost Recharges Revenue and Cost Recharges
£'000 £'000
PHD Industrial Holdings 186 202
DSW Investments 2 LLP (110) (107)
Other investments 758 592
Totals 834 687
Other investments relate to routine and similar transactions which arose in
the ordinary course of business, with DSW CF Leeds, DSW TS Leeds and DSW
Business Recovery.
Amounts due from/to related parties
Group entities had the following balances, including loans to related parties,
outstanding at year end with related parties who are not members of the Group:
2025 2024
Amounts due from/ (to) related parties Amounts due from/(to) related parties
£'000 £'000
DSW Investments 2 LLP (34) (34)
Other investments 341 237
Totals 307 203
Salary and fees payable to James Dow and Jon Schofield are as disclosed in the
Remuneration and Nominations Committee Report. Salary totaling £65,267 (2024:
£43,340) has been paid to Susie Dow in the year.
Remuneration of key management personnel
The remuneration of the key management personnel of the Group, is set out
below in aggregate for each of the categories specified in IAS.
2025 2024
£'000 £'000
Wages and salaries 565 621
Social security costs 68 77
Other pension costs (see note 27) 2 20
635 718
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR SSWEEWEISEIWRecent news on DSW Capital
See all newsREG - DSW Capital PLC - Holding(s) in Company
AnnouncementREG - DSW Capital PLC - Final Results FY25
AnnouncementRCS - DSW Capital PLC - FY25 Results Presentation
AnnouncementREG - DSW Capital PLC - Trading Update and Notice of Results
AnnouncementREG - DSW Capital PLC - Holding(s) in Company
Announcement