Half Year Report
23/09/2025 07:00
RNS Number : 3277A
Keystone Law Group PLC
23 September 2025
23 September 2025
Keystone Law Group Plc
('Keystone', the 'Group' or the 'Company')
Interim Results for the six months ended 31 July 2025
- Expecting FY 2026 revenue and adjusted PBIT to be ahead and adjusted PBT comfortably ahead of current market expectations(1)
- Recruitment conditions remained positive, with Keystone adding 30 new Principals ongoing growth in Pods
- Interim dividend of 7.5p, reflecting balance sheet strength and confidence in the outlook
Keystone, the tech-enabled platform law firm, is pleased to announce its interim results for the six months ended 31 July 2025 ('H1 2026' or the 'Period').
Financial Highlights:
· Revenue growth of 16.5% to £54.2 million (H1 2025: £46.5 million)
· Revenue per Principal up 9.9% to £116.8k (H1 2025: £106.3k)
· Adjusted PBIT up 11.2% to £6.2million (H1 2025: £5.6million)
· Adjusted PBT up 20.4% to £7.3 million (H1 2025: £6.1 million) representing an adjusted PBT margin of 13.6% (H1 2025: 13.1%)
· Adjusted basic EPS of 17.8p (H1 2025: 14.6p)
· Cash generated from operations up 10.1% to £6.8 million (H1 2025: £6.2 million) with operating cash conversion of 104.2% (H1 2025: 106%); the Group retains a strong balance sheet with net cash of £6.5 million (H1 2025: £8.3 million) having paid out both final ordinary and special dividend for FY 2025 in the Period.
· Declared interim ordinary dividend of 7.5p per share (H1 2025: 6.2p)
Operational Highlights:
· Consistently strong operational performance continues to deliver high quality, sustainable growth
· Keystone continues to take advantage of positive recruitment market conditions:
o 164 new applicants in the Period (H1 2025: 153)
o 30 high-calibre new Principals added in the Period bringing total Principals to 472 (31 January 2025: 455), reinforcing Keystone's brand and market position
o Principals continue to drive growth of Pods with other fee earners increasing 19 in the Period to 140
· Driving forward an AI strategy focused on delivering real value and real-life solutions
· Initiated marketing brand refresh to reflect Keystone's enhanced position within the legal market
· Continued excellence of service delivery across all the Central office team
Current Trading and Outlook:
· The Group has made a positive start to H2 2026
· The Board are confident in the ongoing success of Keystone and expect revenue and adjusted PBIT for the year ending 31 January 2026 ("FY 2026") to be ahead of current market expectations, whilst the newly renegotiated interest rates mean that adjusted PBT is expected to be comfortably ahead (1).
(1) Management understands current market expectations for 2026 ahead of this announcement to be revenue £103.6million and adjusted PBIT and adjusted PBT of £12.0million and £12.9million respectively.
James Knight, Chief Executive Officer of Keystone, commented:
"I am delighted that the business continues to deliver such strong operational and financial performance, further reinforcing our ongoing investment in both people and our platform. As we maintain our reputation and leading position as the premier platform law firm, we remain confident that Keystone will continue to attract the high-quality talent needed to drive the business forward, delivering sustainable, long-term profits".
For further information please contact:
Keystone Law Group plc
James Knight, Chief Executive Officer
Ashley Miller, Finance Director
www.keystonelaw.com
+44 (0) 20 3319 3700
Panmure Liberum Limited (Nominated Adviser and Joint Broker)
Atholl Tweedie (Corporate Finance)
Rupert Dearden (Corporate Broking)
www.panmureliberum.com
+44 (0) 20 7886 2500
Investec Bank plc (Joint Broker)
Carlton Nelson /
James Rudd / Thomas Brookhouse
www.investec.co.uk
+44 (0) 20 7597 5970
Vigo Consulting (Financial Public Relations)
Jeremy Garcia / Fiona Hetherington
keystonelaw@vigoconsulting.com
+44 (0)207 390 0233
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR").
Notes to editors
Keystone (AIM: KEYS) is a highly scalable, premier tech-enabled platform law firm. Ranked within the UK Top 100 law firms, providing conventional legal services in a £12bn addressable market through its differentiated platform model which has three defining characteristics:
· Lawyers have freedom, flexibility and autonomy, and are paid up to 75% of what they bill.
· Lawyers determine how, when and where they work, in contrast to the conventional law firm model.
· Lawyers are provided full infrastructure and support via its central office team, bespoke user-friendly IT platform, and network of colleagues and events.
Keystone is a full-service law firm, with 20 service areas and more than 50 industry sectors delivered by over 450 high calibre self-employed Principal lawyers who work from their own offices.
More information about Keystone can be found at www.keystonelaw.co.uk.
Chief Executive Officer's Statement
I am delighted to report another strong set of results for the first half of our financial year ("H1 2026" or the "Period"). These results reflect the continued strong performance of the business delivering revenue of £54.2m up 16.5% (H1 2025: £46.5m) and adjusted PBIT(1) of £6.2m up 11.2% (H1 2025: £5.6m). Successful renegotiation of bank interest rates has meant that net interest income has increased to £1.1m (H1 2025: £0.5m) such that reported PBT rose to £6.9m and adjusted PBT(1) increased to £7.3m (increases of 25.0% and 20.4% on H1 2025 results of £5.5m and £6.1m respectively). As always, the cash generative nature of the model has ensured that these profits have converted to cash, with cash generated from operations increasing by 10.1% to £6.8m (H1 2025: £6.2m).
Conditions in the legal recruitment market have continued to be positive for Keystone, as demonstrated by the recruitment KPIs shown in the graphs below:
| Note | 6 months to July 2025 (Unaudited) £ | 6 months to July 2024 (Unaudited) £ | |
| Revenue | 54,151,537 | 46,468,026 | |
| Cost of sales | (40,358,020) | (34,383,352) | |
| Gross profit | 13,793,517 | 12,084,674 | |
| Trade receivables impairment | (265,266) | (255,217) | |
| Corresponding reduction in trade payables | 180,059 | 177,885 | |
| (85,207) | (77,332) | ||
| Depreciation and amortisation | (346,456) | (447,286) | |
| Share-based payments | 2 | (408,852) | (378,934) |
| Administrative expenses | 2 | (7,211,696) | (6,194,844) |
| Other operating income | 43,461 | 28,710 | |
| Operating profit | 5,784,767 | 5,014,988 | |
| Finance income | 1,578,727 | 929,379 | |
| Finance costs | (431,834) | (400,167) | |
| Profit before tax | 6,931,660 | 5,544,200 | |
| Corporation tax expense | (1,724,898) | (1,492,880) | |
| Profit and total comprehensive income for the period attributable to equity holders of the Parent | 5,206,762 | 4,051,320 | |
| Basic EPS (p) | 1 | 16.5 | 12.9 |
| Diluted EPS (p) | 1 | 16.2 | 12.6 |
| Note | 31 July 2025 (Unaudited) £ | 31 July 2024 (Unaudited) £ | 31 January 2025 (Audited) £ | |
| Assets | ||||
| Non-current assets | ||||
| Property, plant and equipment | ||||
| - Owned assets | 690,053 | 80,028 | 772,027 | |
| - Right-of-use assets | 1,741,680 | 2,206,259 | 1,973,730 | |
| Total property, plant and equipment | 2,431,733 | 2,286,287 | 2,745,757 | |
| Intangible assets | 4,807,411 | 4,880,512 | 4,807,411 | |
| Investments | 129,350 | 129,350 | 129,350 | |
| 7,368,494 | 7,296,419 | 7,682,518 | ||
| Current assets | ||||
| Trade and other receivables | 3 | 30,043,484 | 27,270,682 | 28,325,545 |
| Corporation tax | - | 29,899 | - | |
| Cash and cash equivalents | 6,505,516 | 8,311,102 | 9,687,172 | |
| 36,549,000 | 35,611,683 | 38,012,717 | ||
| Total assets | 43,917,494 | 42,907,832 | 45,695,235 | |
| Equity and liabilities | ||||
| Equity | ||||
| Share capital | 63,434 | 63,186 | 63,186 | |
| Share premium | 9,920,760 | 9,920,760 | 9,920,760 | |
| Share-based payments reserve | 968,590 | 874,353 | 1,276,080 | |
| Retained earnings | 5,827,556 | 6,562,760 | 9,102,454 | |
| Equity attributable to equity holders of the Parent | 16,780,340 | 17,421,058 | 20,362,480 | |
| Non-current liabilities | ||||
| Lease liabilities | 1,320,595 | 1,762,833 | 1,563,376 | |
| Deferred tax liabilities | - | 14,610 | - | |
| Provisions | 1,198,130 | 912,071 | 1,162,235 | |
| 2,518,725 | 2,689,514 | 2,725,611 | ||
| Current liabilities | ||||
| Trade and other payables | 23,942,119 | 22,202,412 | 21,985,238 | |
| Lease liabilities | 594,848 | 594,848 | 594,848 | |
| Corporation tax liability | 81,462 | - | 27,058 | |
| 24,618,429 | 22,797,260 | 22,607,144 | ||
| Total liabilities | 27,137,154 | 25,486,773 | 25,332,755 | |
| Total equity and liabilities | 43,917,494 | 42,907,832 | 45,695,235 |
| Attributable to equity holders of the Parent | |||||
| Share capital £ | Share premium £ | Share-based payment reserve £ | Retained earnings £ | Total £ | |
| At 31 January 2024 (audited) | 62,963 | 9,920,760 | 1,059,531 | 5,896,437 | 16,939,691 |
| Profit for the period and total comprehensive income | - | - | - | 4,051,320 | 4,051,320 |
| Transactions with owners | |||||
| Share-based payments vesting | 223 | - | (564,113) | 564,113 | 223 |
| Share-based payments awards | - | - | 378,964 | - | 348,964 |
| Dividends paid | - | - | - | (3,949,109) | (3,949,109) |
| At 31 July 2024 (unaudited) | 63,186 | 9,920,760 | 874,353 | 6,562,760 | 17,421,058 |
| Profit for the period and total comprehensive income | - | - | - | 4,498,453 | 4,498,453 |
| Transactions with owners | |||||
| Share-based payments vesting | - | - | - | - | - |
| Share-based payments awards | - | - | 401,698 | - | 401,698 |
| Dividends paid | - | - | - | (1,958,760) | (1,958,760) |
| At 31 January 2025 (audited) | 63,186 | 9,920,760 | 1,276,080 | 9,102,454 | 20,362,480 |
| Profit for the period and total comprehensive income | - | - | - | 5,206,762 | 5,206,762 |
| Transactions with owners | |||||
| Share-based payments vesting | 248 | - | (716,342) | 716,343 | 248 |
| Share-based payments awards | - | - | 408,852 | - | 408,852 |
| Dividends paid | - | - | - | (9,198,002) | (9,198,002) |
| At 31 July 2025 (unaudited) | 63,434 | 9,920,760 | 968,590 | 5,827,556 | 16,780,340 |
| Note | 6 months to July 2025 (Unaudited) £ | 6 months to July 2024 (Unaudited) £ | Year ended 31 January 2025 (Audited) £ | |
| Cash flows from operating activities | ||||
| Profit before tax | 6,931,660 | 5,544,200 | 11,684,999 | |
| Adjustments to cash flows from non-cash items | ||||
| Depreciation and amortisation | 2 | 346,056 | 447,286 | 823,681 |
| Share-based payments | 408,852 | 378,934 | 780,662 | |
| Finance income | (1,578,727) | (929,379) | (1,966,246) | |
| Finance costs | 431,834 | 400,167 | 855,043 | |
| 6,539,675 | 5,841,208 | 12,178,139 | ||
| Working capital adjustments | ||||
| (Increase) in trade and other receivables | (1,717,939) | (2,076,333) | (3,131,196) | |
| Increase in trade and other payables | 1,956,881 | 2,419,825 | 2,202,651 | |
| Increase in provisions | 35,895 | 4,126 | 254,290 | |
| Cash generated from operations | 6,814,512 | 6,188,826 | 11,503,884 | |
| Interest paid on client balances | (377,191) | (370,980) | (767,002) | |
| Interest portion of lease liability | (54,643) | (29,187) | (88,041) | |
| Corporation taxes paid | (1,670,492) | (2,800,524) | (4,404,523) | |
| Cash generated from operating activities | 4,712,186 | 2,988,135 | 6,244,318 | |
| Cash flows from/(used in) investing activities | ||||
| Interest received | 1,578,727 | 929,379 | 1,966,246 | |
| Purchases of property, plant and equipment | (32,432) | (9,609) | (772,373) | |
| Net cash generated from/(used in) investing activities | 1,546,295 | 919,770 | 1,193,873 | |
| Cash flows from financing activities | ||||
| Proceeds from issue of ordinary shares | 248 | 223 | 223 | |
| Lease repayments | (251,383) | (14,989) | (210,445) | |
| Dividends paid | (9,189,002) | (3,949,109) | (5,907,869) | |
| Net cash (used in) financing activities | (9,440,137) | (3,963,875) | (6,118,091) | |
| Net (decrease)/increase in cash and cash equivalents | (3,181,656) | (55,970) | 1,320,100 | |
| Cash at 1 February | 9,687,172 | 8,367,072 | 8,367,072 | |
| Cash at 31 July | 6,505,516 | 8,311,102 | 9,687,172 | |
| 6 months to July 2025 (Unaudited) £'000 | 6 months to July 2024 (Unaudited) £'000 | |
| Profit before tax | 6,932 | 5,544 |
| Amortisation | - | 175 |
| Share-based payments | 409 | 379 |
| Adjusted PBT | 7,341 | 6,098 |
| Expenses are comprised of: | 6 months to July 2025 (Unaudited) £ | 6 months to July 2024 (Unaudited) £ |
| Depreciation - right-of-use assets | 232,050 | 221,746 |
| Depreciation - other | 114,406 | 50,098 |
| Amortisation | - | 175,442 |
| Staff costs | 3,907,870 | 3,291,181 |
| Share-based payments | 408,852 | 378,934 |
| Other administrative expenses | 4,104,844 | 3,531,933 |
| 8,768,022 | 7,649,334 |
| 31 July 2025 (Unaudited) £ | 31 July 2024 (Unaudited) £ | 31 January 2025 (Audited) £ | |
| Trade receivables | 19,060,337 | 17,250,578 | 17,283,997 |
| Provision for impairment of trade receivables | (5,497,587) | (4,649,750) | (5,497,587) |
| Net trade receivables | 13,562,750 | 12,600,828 | 11,786,410 |
| Accrued income | 13,533,029 | 11,760,727 | 12,856,306 |
| Prepayments | 1,305,226 | 1,504,815 | 1,919,904 |
| Unbilled disbursements | 1,022,206 | 1,021,297 | 842,334 |
| Reimbursement asset | 478,311 | 280,000 | 442,541 |
| Other receivables | 141,963 | 103,015 | 478,050 |
| Total current trade and other receivables | 30,043,484 | 27,270,682 | 28,325,545 |
| Net trade receivables average age (days) (unaudited) | 33 | 33 | 34 |