REG - Keystone Law Grp PLC - Final Results
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RNS Number : 2872C Keystone Law Group PLC 29 April 2026
29 April 2026
Keystone Law Group Plc
('Keystone', the 'Group' or the 'Company')
Full Year Results for the Year Ended 31 January 2026
- Significant revenue and profit growth delivering results marginally ahead of
market expectations ((1))
- A record number of fee earners joined Keystone increasing total fee earners
by 13.5% to 654
- AI success being achieved by implementing and promoting solutions tailored
to our business
Keystone, the premier tech-enabled platform law firm, is pleased to announce
its full year results for the year ended 31 January 2026 ('FY2026' or the
'Period').
2026
Financial Highlights:
· Revenue growth of 17.9% to £115.2 million (2025: £97.7 million)
· Revenue per Principal up 10.5% to £243k (2025: £220k)
· Adjusted PBT up 20.6% to £15.3 million (2025: £12.7 million)
representing an adjusted PBT margin of 13.3% (2025: 13.0%)
· Adjusted basic EPS of 37.0p (2025: 30.4p)
· Cash generated from operations up 17% to £13.5 million (2025: £11.5
million) with operating cash conversion of 98.9% (2025: 94.5%)
· Strong balance sheet with net cash of £9.7 million (2025: £9.7
million)
· Paid interim ordinary dividend of 7.5p per share and proposed final
ordinary dividend of 17.2p per share bringing total ordinary dividend per
share to 24.7p per share (2025: 20.2p)
Operational Highlights:
· Delivered an excellent operational and financial performance with
strong client demand across the business
· Significant levels of applicant demand in the Period reflecting
Keystone's market position
o Buoyant recruitment environment delivered 294 qualified new applicants
(2025: 283) in the Period
o 22% increase in Principals recruited with 61 new Principals added (2025:
50) bringing total Principals to 491 (2025: 455)
o 31% increase in offers accepted with 68 new joiners in the Period (2025:
52)
o 35% increase in 'other' fee earners to 163 (146 pod members and 17 central
office lawyers), with total fee earners up 13.5% to 654
· Quality focused recruitment strategy continues to reinforce Keystone
as 'the premier platform law firm'
o 221 Keystone lawyers ranked in Legal 500 UK Solicitors 2025 (2025: 207
listed, up from 65 in 2019)
· Investment in Keystone's tech-enabled platform and ongoing AI
adoption
o Ongoing implementation and evaluation of IT infrastructure to drive real
impact for our lawyers and the broader business
o Rolled out several AI initiatives to enhance our offering to lawyers,
including deploying secure, locked-down versions of ChatGPT and Claude and
adopting the NetDocuments AI extension
· Designed and delivered our brand refresh which accurately reflect
Keystone today
o Launched a new website and marketing collateral in Q1 2027, enhancing
stakeholder experience and strengthening our market position to support growth
Current Trading and Outlook:
· The Group has made a positive start to 2027 with client demand and
recruitment activity remaining positive during Q1 2027
· The Board remains confident that Keystone will continue to deliver
strong, sustainable growth and expects adjusted PBT to be ahead of current
market expectations for 2027 ((2),)
(1) Management understand market expectations prior to this announcement for
2026 to be: revenue £114.3m, adjusted PBIT £12.7 and adjusted PBT £15.1m.
(2) Management understand market expectations prior to this announcement for
2027 to be: revenue £122.3m, adjusted PBIT £13.6 and adjusted PBT £15.1m.
James Knight, Chief Executive Officer of Keystone, commented:
"We delivered another excellent year for Keystone, with strong operational and
financial momentum driven by sustained client demand and continued growth in
lawyer numbers.
Our brand refresh, which more accurately reflects the evolution of Keystone,
underscores our ambition and further reinforces our position as the premier
tech-enabled platform law firm. In addition, the ongoing investment in IT
infrastructure and AI capabilities continues to differentiate our highly
scalable model, underpinning both our strong balance sheet and progressive
dividend policy.
I would like to personally thank everyone at Keystone for their ongoing
support and look forward to the new financial year which I'm confident will be
another period of sustained growth."
Analyst Briefing
A virtual meeting for sell-side analysts will be held virtually at 9.30 a.m.
on Wednesday, 29 April 2026. Sell-side analysts wishing to attend this event
can register via email at: keystonelaw@vigoconsulting.com
(mailto:keystonelaw@vigoconsulting.com)
Retail Investor Presentation
Keystone's management team will provide a separate presentation and Q&A
for retail investors at 1.00 p.m. on Friday, 1 May 2026.
The presentation will be hosted on the Investor Meet Company platform, where
questions can be submitted pre-event up until 9.00 a.m. on the day before the
meeting, or at any time during the live presentation.
Investors can register for free and subscribe to alerts on Keystone by
visiting:
www.investormeetcompany.com/keystone-law-group-plc/register-investor
(http://www.investormeetcompany.com/keystone-law-group-plc/register-investor)
Investors who already follow Keystone on the Investor Meet Company platform
will automatically be invited.
For further information please contact:
Keystone Law Group plc
James Knight, Chief Executive Officer
Ashley Miller, Finance Director
www.keystonelaw.com (http://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
www.investec.co.uk (http://www.investec.co.uk)
+44 (0) 20 7597 5970
Vigo Consulting (Financial Public Relations)
Jeremy Garcia
Fiona Hetherington
keystonelaw@vigoconsulting.com (mailto: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) the premier tech-enabled platform law firm. It is a
highly scalable business with an organic growth strategy which has a proven
record of delivering sustainable growth since its IPO in 2018. Ranked within
the UK Top 100 law firms, Keystone provides conventional legal services in a
£14bn 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 extensive experience across a wide
range of sectors and specialisms. With nearly 500 high calibre
self-employed Principal lawyers, supported by over 150 other fee earners,
Keystone delivers dynamic services to its client base which ranges from fast
growing start-ups to multinational corporations and high net worth
individuals.
More information about Keystone can be found at www.keystonelaw.co.uk
(http://www.keystonelaw.co.uk/) .
CHAIRMAN'S STATEMENT
It is my pleasure to introduce Keystone Law's results for the year ended 31
January 2026.
The business has delivered another strong performance, both operationally and
financially. A record number of fee earners have joined this year, 61 new
principals and 63 pod members, increasing total fee earners by 13.5%. Our
lawyers have taken advantage of the sustained, broad based client demand to
drive revenue up by 17.9% to £115.2m, producing adjusted PBIT((1)) of £12.9m
(2025: £11.6m) and adjusted PBT((1)) of £15.3m representing a 13.3% margin
(2025: £12.7m, 13.0% margin). PBT was £14.7m at a margin of 12.7% (2025:
£11.7m, 12.0%), whilst retained earnings were £11.1m (2025: £8.6m). The
quality of these earnings is extremely high, as demonstrated by the high level
of cash generation at £11.6m pre dividends (2025: £7.2m).
DIVIDEND
The strong level of cash generation from our business model ensures that we
are well placed to return value to our stakeholders through our progressive
dividend policy in line with which we are proposing to pay a final ordinary
dividend of 17.2p. Having paid an ordinary interim dividend of 7.5p (2025:
6.2p), this will bring the total ordinary dividend for the year to 24.7p
(2025: 20.2p).
This will bring the total value of dividends paid since IPO to approximately
£54m, or equivalent to just over 169p((2)) per share, which is 91% of the
adjusted earnings((1)) generated by the business over the same period.
OUR AI JOURNEY
AI, and the successful application of its technology, has been a significant
focus point of the management team this year. We firmly believe that the
successful adoption of this new technology will enhance the Keystone
proposition for both lawyers and clients. We are focused on identifying and
implementing tools and solutions which genuinely improve our service delivery
whilst driving user adoption through education and training. We believe that
this approach provides further support for our successful growth strategy.
THE KEYSTONE COMMUNITY AT THE HEART OF OUR SUCCESS
Our success is delivered by, and is a reflection of, the people who comprise
the Keystone community. Keystone is different by design and this difference
extends to the emphasis we place on developing, maintaining and enhancing the
Keystone community which sits at the heart of the business. Our community
focused business model is a real differentiating factor in attracting and
retaining lawyers. By building genuine relationships across the business our
approach delivers real value to our clients, as they benefit from multi-lawyer
and multi-disciplinary teams which work together with a real understanding and
appreciation of both their technical and cultural needs. All of this
underpins the long-term sustainable creation of value for all stakeholders.
THE CENTRAL OFFICE TEAM
The hard work and dedication of our central office team delivers a first-class
service to our lawyers, and their clients, and is a further differentiating
factor on which our success is built. By treating our lawyers as if they
were our clients, we ensure an exceptional standard of support. Our focus is
always on improving the lawyer and client experience and this is demonstrated
consistently through the ongoing investment we make in our people, our systems
and our community.
BOARD AND GOVERNANCE
This is the first year that the updated Quoted Companies Alliance ("QCA")
code, which was issued in 2023, became effective in its entirety. We had
already adopted a number of the updated guidance included within this ahead of
the code timeline and I confirm that this year we have operated within the
structures and governance requirements of this updated code throughout the
year with the final element needed to satisfy all requirements being the
placing of the remuneration report within this annual report before
shareholders for a non-binding advisory vote; this will take place at our
coming AGM.
OUTLOOK
I am pleased to report that the momentum which we had experienced through 2026
has continued into the early part of 2027 which provides us with confidence
for the year ahead.
Robin Williams
Non-executive Chairman
28 April 2026
(1) Adjusted PBT, adjusted PBIT and adjusted earnings are calculated by
adding share-based payment costs, gains on assets held at fair value and
amortisation of intangible assets to PBT, PBIT or earnings respectively.
Details of these calculations are shown in the Financial Review.
(2) Sum of the Ordinary DPS and special dividends DPS paid and proposed for
the years ended 31 January 2019 to 31 January 2026.
CHIEF EXECUTIVE'S REVIEW
INTRODUCTION AND HIGHLIGHTS
I am delighted to report that 2026 has been another excellent year for
Keystone. We have continued to drive the business forwards, building on the
success and momentum of earlier years to deliver another strong set of
results, both operationally and financially. We remain focused on the
delivery of our high-calibre organic growth strategy, taking advantage of the
significant opportunity that the UK legal mid-market represents. We have now
firmly established Keystone as the premier platform law firm, with nearly 500
partner level lawyers offering our clients a range and depth of experience and
knowledge which clearly distinguishes us from the competition. The calibre of
our lawyers is excellent, as demonstrated by their professional backgrounds
and in a great many cases their recognition in the leading legal directories.
These factors, together with the extensive range of other benefits Keystone
lawyers enjoy, continue to underpin the growth and success of the business.
This year, the business has benefitted from sustained, broad-based, client
demand which, together with the continued growth in lawyer numbers, has driven
revenue up by 17.9% to £115.2m. The revenue growth has been created
predominantly by our Principals((1)) and their pods with gross profit growing
15.2% on a gross margin of 25.5% (2025: 26.1%) and adjusted PBIT increased by
11.4% to £12.9m at a margin of 11.2% (2025: 11.9%). Successful
renegotiation of bank interest rates and the slow pace of the reduction of
Bank of England base rates has also contributed to strong adjusted PBT and PBT
growth, up 20.6% and 25.6% to £15.3m and £14.7m respectively.
The strength of our proposition to lawyers and their clients underpins our
strong recruitment performance and we have seen a record number of fee earners
join the business, with total fee earners increasing 13.5% to 654.
record RECRUITMENTnumber of fee earners joining keystone
The recruitment market conditions have continued to be favourable for Keystone
and, as the premier platform law firm, we have been well positioned to take
advantage of this. Accordingly, we have recruited a record number of new fee
earners, with 61 new principals (2025: 50) and 63 pod members joining this
year.
During the year, we received 294 qualified applicants (2025: 283), made offers
to 96 candidates (2025: 95) with 68 candidates accepting offers (2025: 52).
Principal numbers increased by 7.7% to 491 whilst the number of other fee
earners increased by 35.8% to 163 (146 pod members and 17 central office
employed lawyers). This increase in other fee earners is an extremely
positive development, with 14 of the net increase (36 in total) being
attributable to Principals who themselves joined in the year (the equivalent
statistic for 2025 was 1 or a net increase of 5). This demonstrates the
confidence that those Principals have in the sustainable size of their
practices.
The strength and depth of experience that Keystone offers our clients is a
significant differentiating factor when recruiting, as like attracts like.
By only recruiting lawyers of the highest quality, we have created a virtuous
circle, establishing the business firmly at the top end of the legal
profession. This strength in depth is reflected in the number of Keystone
lawyers ranked in the leading legal directories, with 221 being recognised in
the Legal 500 UK Solicitors 2025 rankings((2)) (2025: 207 listed up from 65 in
2019).
IT INNOVATION AND THE AI JOURNEY
For us, the innovative application of technology to deliver real solutions and
make a genuine difference to our lawyers' working lives is a central tenet of
the Keystone model. As such, our approach to the AI journey is simply a
logical extension of this and absolutely consistent with our solutions focused
IT strategy.
We believe that the term "AI journey" accurately reflects our approach to
AI. There is no single solution to be bought and deployed which will end
this journey. It is our belief that by adopting, implementing and using the
underlying technology we will continue to drive the Keystone proposition
forwards enhancing value for all stakeholders.
This year, our IT team and user groups have continued assessing new tools and
products as they have come to market, considering how, and to what extent,
these may be deployed to genuinely impact the lives of our lawyers and drive
the business forwards. This is a continuous and ongoing process, and the
insights of this work continue to inform our development and solutions
implementation. We believe that for our journey to deliver real value, it is
necessary to innovate across our IT estate implementing a range of products
and solutions, tailoring these to our business. This year, we have rolled out
several AI initiatives to further enhance our offering to lawyers; on the
generative AI front we have deployed a secure locked down version of ChatGPT
and Claude as well as adopting the NetDocuments AI extension. We recognise
that for these solutions to make a difference they need to be widely adopted
across the business and so we have invested significant time and energy in
promoting the benefits of AI and training our lawyers to use it, thereby
empowering them to make the most of these new tools. This approach has
ensured the successful adoption of these tools with over half our lawyers
already using them regularly.
Furthermore, working with expert external consultants we have identified
several possible applications for agentic AI agents within the business. We
have applied a combination of generative and agentic AI to enable our lawyers
to interrogate our substantial operating manual in seconds saving them time
and improving their experience. With regards to agentic AI we have harnessed
this technology in new tools which we have rolled out to support our lawyers
in complying with AML legislation regarding identification of source of funds
as well as providing an enhanced approach to conflict checking.
BRAND REFRESH
It has been an extremely busy year for our marketing team. Alongside
delivering the day to day support our lawyers need, they have also worked
closely with external advisers to design and deliver our brand refresh,
ensuring that the external presentation of Keystone accurately reflects the
business we are today. The new website and extensive marketing collateral
used to support the business has gone live post year end and I am delighted
with the results. I believe that the new look and feel significantly
enhances the Keystone offering, aligning with the broader brand position of
Keystone in the marketplace. These changes will enhance the experience of all
stakeholders interacting with the business, further supporting our growth
strategy.
HIGH CALIBRE SUPPORT FOR HIGH CALIBRE LAWYERS
The central office team has had another busy and successful year. The
support provided is of the highest standard and we work extremely hard to
ensure that it continues to meet and exceed the expectations of the high
calibre lawyers we support. Each element of the support we provide is
fundamental to the overall success of the business and whether that be through
the role of the community and engagement team bringing the lawyers together,
enhancing the culture and lawyer experience or the compliance team which
supports the business in navigating the continually evolving regulatory
environment within which we must operate or any one of the other teams. Each
team works to the highest of standards, complementing each other to ensure the
overall success of the business and I am enormously proud of all they have
achieved this year.
LOOKING AHEAD
We have made a positive start to the current financial year, with trading
conditions remaining largely unchanged to those of last year. In light of
this, we are confident that the business will continue to drive forwards,
delivering sustainable growth and, due to the change in the interest rate
environment, we now expect adjusted PBT for the coming year to be ahead of
market expectations.
James Knight
Chief Executive
28 April 2026
((1) ) Principal lawyers are the senior lawyers who own the service
company ("Pod") which contracts with Keystone. The relationship between
Keystone and its lawyers is governed by two agreements: a service agreement
(which governs the commercial terms and is between the Pod and Keystone) and a
compliance agreement (which governs the behaviour of lawyers and is between
each lawyer and Keystone). Pods can employ more than one fee earner. A junior
lawyer who is employed by a Pod ("Pod Member") is, to all intents and
purposes, a Keystone lawyer and is presented to the outside world in much the
same way as a conventional law firm would present a conventionally employed
junior lawyer. Junior lawyers are interviewed and fully vetted by our
recruitment team, ensuring they are of the requisite quality and calibre.
These juniors also sign a compliance agreement and have to comply with all
rules and regulations governing the professional conduct of Keystone's
lawyers.
((2) ) The Legal 500 UK Solicitors 2025 rankings is the leading guide
to law firms and solicitors in the UK (Source: Legal500.com).
Financial Review and Strategic Report
KEY PERFORMANCE INDICATORS (KPIs)
The following KPIs are used by the management to monitor the financial and
operational performance of the Group:
• Revenue growth: 17.9% increase (2025: 11.1%)
• Adjusted PBT((3)) growth: 20.6% increase (2025: 12.8%)
• Adjusted PBT margin((3)): 13.3% (2025: 13.0%)
• PBT growth: 25.6% increase (2025: 13.4%)
• PBT margin: 12.7% (2025: 12.0%)
• Adjusted basic EPS((3)): 37.0p (2025: 30.4p)
• Operating cash conversion: 98.9%((1)) (2025: 94.5%)
• Trade receivables days: 35 (2025: 34)
• Qualified new applicants((2)): 294 (2025: 283)
• Offers made((2)): 96 (2025: 95)
• Offers accepted((2)): 68 (2025: 52)
((1) ) Operating cash conversion is calculated utilising cash
generated from operations and dividing it by the PBT before non-cash movements
and net interest (2026: £13,621,568 per cash flow statement).
((2) ) Non-financial KPIs are commented on with the Chief Executive's
review. Recruitment data refers to numbers of potential Principals.
((3) ) The calculation of adjusted PBT, adjusted PBT margin and
adjusted EPS is shown on the next page.
REVENUE
I am delighted to report that revenue increased this year by 17.9% to
£115.2m. This strong revenue growth has been driven by broad based client
demand and continued strength in recruitment, both of Principals and pod
members. In terms of Principal numbers, we ended the period with 491
Principals and averaged 473 (2025: ended with 455 and averaged 443.5), whilst
a net increase of 36 pod members means that total fee earners has increased by
13.5% to 654 (2025: 576). These factors have facilitated the continued growth
in revenue per Principal, which has increased this year by 10.5% to £243k
(2025: £220k).
GROSS PROFIT
The increased revenue this year generated growth in gross profit of 15.2% to
£29.3m (2025: £25.5m). The strong revenue growth was driven predominantly
by the Principals and their Pods, such that the share of gross profit
generated by those lawyers on whom we enjoy enhanced gross margins((4)) has
fallen. Accordingly, the gross margin of 25.5% was lower than last year
(2025: 26.1%), this reduction in margin flows through to PBT.
((4)) Enhanced GM% delivered by central office employed lawyers and those
lawyers based on the Isle of Man.
DEPRECIATION, AMORTISATION, SHARE-BASED PAYMENTS AND GAINS ON INVESTMENTS
Depreciation has increased this year by £0.1m as the 2024 fit out costs of
our Chancery Lane offices only started being depreciated in November 2025.
There was no amortisation charge for intangibles this year as the underlying
asset on which this had been charged became fully amortised during the prior
year (2025: £0.25m). The charge in respect of share-based payments increased
from £0.8m to £0.85m, whilst the carrying value of the investment held by
the business in Keypoint Law PTY Limited was revalued resulting in an
unrealised gain of £0.2m.
OTHER ADMINISTRATIVE EXPENSES
Other administrative expenses have increased by 18.3% to £15.3m (2025:
£12.9m). Staff costs increased by 17.0% to £6.3m (2025: £5.4m), driven by
the investment in the additional personnel needed (2026: 81, 2025: 69) to
ensure that the services provided to our lawyers remain a differentiating
factor, together with pay rises and promotions reflective of the competitive
market environment.
Other administrative costs (per note 4) increased by 19.3% to £9.0m (2025:
£7.5m), most significantly driven by an increased cost in lawyer recruitment
fees (up £0.5m year on year) as a number of lawyers with large practices
joined this year via recruitment agencies. The other main contributory
factors to this increase were the increased investment in IT, costs associated
with the brand refresh and the 13.5% increase in the average number of fee
earners supported by the business.
FINANCE INCOME AND COSTS
During the first half of this year, we successfully renegotiated with our bank
to receive enhanced interest rates on funds held. This, in conjunction with
the continued slow pace in the reduction of base rates has meant that we have
seen a substantial increase in the net finance income received (2026: £2.4m,
2025: £1.1m).
PBT, ADJUSTED PBT AND PBT MARGINS
Adjusted PBT is calculated as follows:
2026 2025
£ £
Profit before tax 14,671,612 11,684,999
Gain in respect of investment held at fair value (184,388) -
Amortisation of intangible assets - 248,543
Share-based payments 851,320 780,662
Adjusted PBT 15,338,544 12,714,204
Net finance income 2,408,050 1,111,203
Adjusted PBIT 12,930,474 11,603,001
PBT margin 12.7% 12.0%
Adjusted PBIT margin 11.2% 11.9%
Adjusted PBT margin 13.3% 13.0%
The Board consider adjusted PBT and adjusted PBIT to be better measures of
performance than PBT or PBIT, as the adjustments made exclude items which are
either not a result of the underlying performance of the business (as is the
case for the unrealised gain on the investment held at fair value or the
amortisation, in the prior years, which arose from the structuring of the 2014
private equity investment in the business) or where the cost represents
neither a cash impact to the business, nor is it a reflection of the value
received by the recipient (as is the case with share-based payment costs).
The decline in the adjusted PBIT margin is predominantly the result of the
lower gross margin, with the full year impact of depreciation of the office
fit out causing much of the remainder.
TAXATION
The Group's effective rate of corporation tax this year was 24.6% (2025:
26.8%). The reason that this is below the standard rate of corporation tax,
and indeed the normal rate for the Group, is that at 31 January 2025 we
prudently did not assume that the costs of the fit out of our offices in
Chancery Lane would qualify for the annual investment allowance and as such
enjoy 100% deduction in the year. During the subsequent tax work it was
concluded that they did qualify, thereby reducing the charge to tax in the
year. Excluding the benefit of this one-off transaction, the underlying
corporation tax would have been 26%; higher than the standard rate and
reflective of the level of investment which the Group makes in providing
networking opportunities for our lawyers in social environments which are
disallowable for corporation tax purposes.
EARNINGS PER SHARE
Basic earnings per share increased from 27.1p to 34.9p, with fully diluted EPS
being 34.3p (2025: 26.6p). Adjusted basic earnings per share (calculated by
making the same adjustments to earnings as have been made in calculating
adjusted PBT and divided by the average shares in issue this year) increased
to 37.0p (2025: 30.4p).
STATEMENT OF FINANCIAL POSITION
CASH
One of the key features of the Group's business model is its strong cash
generation. Keystone is a capital light model where the largest element of
its costs, the payment of its lawyers, is on a pay when paid basis. These
characteristics are clearly demonstrated in the Group's cashflow statement.
Operating cash conversion of 98.9% (2025: 94.5%) generating cash from
operations of £13.5m (2025: £11.5m), and capital expenditure returned to its
usual levels of £0.1m following the one-off increase in 2025 to reflect the
fit out of the offices in Chancery Lane.
Corporation tax paid this year (£3.7m) also reflects a return to "normal"
insofar as it includes four quarterly payments. This follows the distortion
to cashflow caused in 2025 as the business transitioned to meet the
requirements of being classified as "super large" by HMRC. This
classification means that the business has to pay 100% of the corporation tax
due within the financial year and so 2025 was a transitional year in which 6
quarterly payments were made.
The newly renegotiated interest rates on cash held have ensured a step up in
interest received this year (£3.2m, 2025: £2.0m) whilst interest paid
remained largely in line with the prior year.
Overall, these movements have meant that the Group generated £11.6m (2025:
£7.2m) pre dividend payments. This strong cash generation, together with
the broader strength of the balance sheet underpinned the Group's ability to
pay dividends in the year of £11.6m, comprising £4.7m in respect of a
special dividend and £6.8m in respect of ordinary dividends (2025: £5.9m
ordinary dividends). This left closing cash of £9.7m (2025: £9.7m).
NET ASSETS
The strength of performance of the Group continues to ensure that we have an
extremely strong balance sheet. Even after a year where we have paid out
£11.6m in dividends, net assets have increased from £20.4m to £20.7m.
This has been driven by strong profitability (£11.1m) and the £0.7m movement
in reserves to account for the vesting of LTIP awards.
SECTION 172 COMPANIES ACT STATEMENT
The statements below address the reporting requirements of the Board under
Section 172 of the Companies Act and the Companies (Miscellaneous Reporting)
Regulations 2018.
The Directors of the Company have a duty to promote the success of the
Company. A Director of the Company must act in the way they consider, in good
faith, to promote the success of the Company for the benefit of its members,
and in doing so have regard (amongst other matters) to:
• the likely consequences of any decision in the long term;
• the interests of the Company's employees;
• the need to foster the Company's operations on the community and the
environment;
• the desirability of the Company to maintain a reputation for high
standards of business conduct; and
• the need to act fairly between members and the Company.
The Directors are committed to developing and maintaining a governance
framework that is appropriate to the business and supports effective decision
making coupled with robust oversight of risks and internal controls.
Keystone has a very clear organic growth strategy aimed to ensure delivery of
long-term sustainable growth and increasing stakeholder value and all
significant business decisions consider both their short and long-term impact
on this strategy. Fundamental to the success of this strategy is the continued
recruitment and retention of high-calibre lawyers, who join Keystone to take
advantage of the many benefits that we offer and build their practice to
deliver work of the highest professional standards to our clients. A key tenet
of our success is the ongoing investment we make in nurturing the community
and culture of the business. This open, engaging and collegiate culture both
attracts and retains lawyers whilst ensuring that all who work at Keystone
feel a part of something special.
Keystone's primary asset is its people, be it the central office staff, the
lawyers, the clients or third-party suppliers with whom we work (such as
counsel, experts and other professionals). As a business, we dedicate
substantial time, effort and resources in working to develop and maintain
strong relationships from which all parties benefit. As a people business, the
impact of business decisions on our principal stakeholders is always central
to the decision-making process.
Law firms generally have a low environmental impact and Keystone's model
further reduces this by having an extremely small office footprint and using
technology across the business to facilitate our lawyers working remotely and
so having no need to commute to work.
The Directors treat all members of the Group fairly and consistently, as
required by both professional standards and in compliance with various pieces
of legislation. We provide information to all shareholders and other third
parties on an equal basis.
Below are some examples of how the Directors have had regard to the matters
set out in section 172 in decisions made when discharging their duties:
Approval of annual budget
The Board has reviewed its plans for the coming year, considering the
financial and operational implications these have. These plans continue to
focus on driving the continued growth of the lawyer base whilst ensuring that,
through the delivery of market leading support services, we facilitate the
growth and development of those lawyers who are already with the Group. This
approach is intended to deliver long-term sustainable growth which is
beneficial to all stakeholders.
DIVIDEND
Reflective of the strong cash generation of the business model, recognising
the strength of our balance sheet and our confidence in the future, the Board
is proposing to pay a final ordinary dividend for the year ended 31 January
2026 of 17.2p per share (2025: 14.0p). This brings the total ordinary dividend
for the year to 24.7p per share (2025: 20.2p per share). Subject to approval
at the Annual General Meeting, the final dividend will be paid on 23 June 2026
to shareholders on the register at the close of business on 5 June 2026.
The cash value of dividends paid this year was £11.6m, comprising £4.7m in
respect of a special dividend and £6.8m in respect of ordinary dividends
(2025: £5.9m ordinary dividends).
Ashley Miller
Finance Director
28 April 2026
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 31 JANUARY 2026
Note 2026 2025
£ £
Revenue 115,168,827 97,703,149
Cost of sales (85,819,172) (72,229,270)
Gross profit 29,349,655 25,473,879
Trade receivables impairment 8 (1,774,951) (1,470,788)
Corresponding reduction in trade payables 8 1,266,897 1,065,268
(508,054) (405,520)
Depreciation and amortisation 4 (691,074) (823,681)
Share-based payments 4 (851,320) (780,662)
Other administrative expenses 4 (15,307,968) (12,940,290)
Gain in respect of investments held at fair value 184,388 -
Other operating income 87,935 50,070
Operating profit 12,263,562 10,573,796
Finance income 5 3,196,726 1,966,246
Financing costs 5 (788,676) (855,043)
Profit before tax 14,671,612 11,684,999
Taxation (3,611,636) (3,135,226)
Profit and total comprehensive income for the year attributable to equity 11,059,976 8,549,773
holders of the Parent
Basic EPS (p) 7 34.9 27.1
Diluted EPS (p) 7 34.3 26.6
The above results were derived from continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JANUARY 2026
Note 2026 2025
£ £
Assets
Non-current assets
Property, plant and equipment
Owned assets 629,880 772,027
Right-of-use assets 1,509,869 1,973,730
Total property, plant and equipment 2,139,749 2,745,757
Intangible assets 4,807,411 4,807,411
Investments 313,738 129,350
7,260,898 7,682,518
Current assets
Trade and other receivables 8 32,787,578 28,325,545
Corporation tax 37,179 -
Cash and cash equivalents 9,744,084 9,687,172
42,568,841 38,012,717
Total assets 49,829,739 45,695,235
Equity and liabilities
Equity
Share capital 9 63,435 63,186
Share premium 9,920,760 9,920,760
Share-based payments reserve 1,411,055 1,276,080
Retained earnings 9,301,975 9,102,454
Equity attributable to equity holders of the Parent 20,697,225 20,362,480
Non-current liabilities
Lease liabilities 1,072,496 1,563,376
Provisions 9 1,340,830 1,162,235
2,413,326 2,725,611
Current liabilities
Trade and other payables 10 26,124,340 21,985,238
Lease liabilities 594,848 594,848
Corporation tax liability - 27,058
26,719,188 22,607,144
Total liabilities 29,132,514 25,332,755
Total equity and liabilities 49,829,739 45,695,235
Ashley Miller
Director
28 April 2026
Keystone Law Group Plc
Registered No. 09038082
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 JANUARY 2026
Attributable to equity holders of the Parent
Note Share capital Share premium Share-based payments reserve Retained earnings Total
£ £ £ £ £
At 31 January 2024 18 62,963 9,920,760 1,059,531 5,896,437 16,939,691
Profit for the year and total comprehensive income - - - 8,549,773 8,549,773
Transactions with owners
Dividends paid in the year - - - (5,907,869) (5,907,869)
Share-based payments vesting 223 - (564,113) 564,113 223
Share-based payment awards - - 780,662 - 780,662
At 31 January 2025 18 63,186 9,920,760 1,276,080 9,102,454 20,362,480
Profit for the year and total comprehensive income - - - 11,059,976 11,059,976
Transactions with owners
Dividends paid in the year - - - (11,576,800) (11,576,800)
Share-based payments vesting 249 - (716,345) 716,345 249
Share-based payment awards - - 851,320 - 851,320
At 31 January 2026 18 63,435 9,920,760 1,411,055 9,301,975 20,697,225
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED 31 JANUARY 2026
Note 2026 2025
£ £
Cash flows from operating activities
Profit before tax 14,671,612 11,684,999
Adjustments
Depreciation and amortisation 5 691,074 823,681
Share-based payments 5 851,320 780,662
Revaluation of investment 16 (184,388) -
Finance income 7 (3,196,726) (1,966,246)
Financing costs 7 788,676 855,043
13,621,568 12,178,139
Working capital adjustments
Increase in trade and other receivables (4,462,033) (3,131,196)
Increase in trade and other payables 4,139,102 2,202,651
Increase in provisions 178,595 254,290
Cash generated from operations 13,477,232 11,503,884
Interest paid (684,708) (767,002)
Interest portion of lease repayments (103,968) (88,041)
Corporation taxes paid (3,675,873) (4,404,523)
Cash generated from operating activities 9,012,683 6,244,318
Cash flows from/(used in) investing activities
Interest received 3,196,726 1,966,246
Purchases of property, plant and equipment (85,068) (772,373)
Net cash generated by investing activities 3,111,658 1,193,873
Cash flows from financing activities
Proceeds from issue of ordinary shares 249 223
Lease repayments (490,878) (210,445)
Dividends paid in year 24 (11,576,800) (5,907,869)
Net cash used in financing activities (12,067,429) (6,118,091)
Net increase in cash and cash equivalents 23 56,912 1,320,100
23 9,687,172 8,367,072
Cash at 1 February
Cash at 31 January 23 9,744,084 9,687,172
Notes to the PRELIMINARY ANNOUNCEMENT
1. GENERAL INFORMATION
The Company was incorporated as Keystone Law Group Limited on 13 May 2014
under the Companies Act 2006 (registration no. 09038082) and, subsequently,
used as the vehicle to acquire Keystone Law Limited (the main trading company
in the Group) and its subsidiaries on 17 October 2014. The Company was
re-registered as a Public Limited Company limited by shares on 10 November
2017. The Company was incorporated and is domiciled in England and Wales. The
principal activity of the Group is the provision of legal services.
The address of its registered office is:
48 Chancery Lane London WC2A 1JF
The preliminary announcement is presented in Pounds Sterling, being the
functional currency of the companies within the Group.
2. ACCOUNTING POLICIES
BASIS OF PREPARATION
The preparation of preliminary announcement, in conformity with UK-adopted
International Accounting Standards requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in
the process of applying the Group's accounting policies.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial statements of
the parent company and entities controlled by the parent company (its
subsidiaries) made up to 31 January each year. Control is achieved when the
parent 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 affect its returns.
The parent 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 parent 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 parent company considers all
relevant facts and circumstances in assessing whether or not the parent
company's voting rights in an investee are sufficient to give it power,
including:
• the size of the parent 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 parent company, other vote
holders or other parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the parent
company has, or does not have, the current ability to direct the relevant
activities at the time that decisions need to be made, including voting
patterns at previous shareholders' meetings.
Consolidation of a subsidiary begins when the parent company obtains control
over the subsidiary and ceases when the parent company loses control of the
subsidiary. Specifically, the results of subsidiaries acquired or disposed of
during the year are included in profit or loss from the date the parent
company gains control until the date when the parent company ceases to control
the subsidiary. Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used into line
with the Group's accounting policies.
All intra-Group assets and liabilities, equity, income, expenses and cash
flows relating to transactions between the members of the Group are eliminated
on consolidation.
Non-controlling interests in subsidiaries are identified separately from the
Group's equity therein. Those interests of non-controlling shareholders that
are present ownership interests entitling their holders to a proportionate
share of net assets upon liquidation may initially be measured at fair value
or at the non-controlling interests' proportionate share of the fair value of
the acquiree's identifiable net assets. The choice of measurement is made on
an acquisition-by-acquisition basis. Other non-controlling interests are
initially measured at fair value.
Subsequent to acquisition, the carrying amount of non-controlling interests is
the amount of those interests at initial recognition plus the non-controlling
interests' share of subsequent changes in equity.
Profit or loss and each component of other comprehensive income are attributed
to the owners of the parent company and to the non-controlling interests.
Total comprehensive income of the subsidiaries is attributed to the owners of
the parent company and to the non-controlling interests, even if this results
in the non-controlling interests having a deficit balance.
Changes in the Group's interests in subsidiaries that do not result in a loss
of control are accounted for as equity transactions. The carrying amount of
the Group's interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiaries. Any
difference between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to the owners of the parent
company.
When the Group loses control of a subsidiary, the gain or loss on disposal
recognised in profit or loss is calculated as the difference between (i) the
aggregate of the fair value of the consideration received and the fair value
of any retained interest and (ii) the previous carrying amount of the assets
(including goodwill), less liabilities of the subsidiary and any
non-controlling interests. All amounts previously recognised in other
comprehensive income in relation to that subsidiary are accounted for as if
the Group had directly disposed of the related assets or liabilities of the
subsidiary (i.e. reclassified to profit or loss or transferred to another
category of equity as required/permitted by applicable IFRS Accounting
Standards). The fair value of any investment retained in the former subsidiary
at the date when control is lost is regarded as the fair value on initial
recognition for subsequent accounting under IFRS 9 Financial Instruments when
applicable, or the cost on initial recognition of an investment in an
associate or a joint venture.
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 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 is measured as the excess of the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree, and
the fair value of the acquirer's previously held equity interest in the
acquiree (if any) over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition-date amounts of the identifiable
assets acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree and
the fair value of the acquirer's previously held interest in the acquiree (if
any), the excess is recognised immediately in profit or loss as a bargain
purchase gain.
GOING CONCERN
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. The
Group is cash positive, has no debt, has a model which is strongly cash
generative and has, to date, a strong trading performance. The Group's
forecasts and projections show that the Group has sufficient resources for
both current and anticipated cash requirements for a period of at least one
year from the approval of these financial statements.
ADJUSTED PROFIT BEFORE TAX ("PBT")
Adjusted PBT is utilised as a key performance indication for the Group and is
calculated as follows:
2026 2025
£ £
Profit before tax 14,671,612 11,684,999
Gain in respect of investment held at fair value (184,388) -
Amortisation - 248,536
Share-based payments 851,320 780,662
Adjusted PBT 15,338,544 12,714,197
The Board consider adjusted PBT and adjusted PBIT to be better measures of
performance than PBT or PBIT, as the adjustments made exclude items which are
either not a result of the underlying performance of the business (as is the
case for the unrealised gain on the investment held at fair value or the
amortisation, in the prior years, which arose from the structuring of the 2014
private equity investment in the business) or where the cost represents
neither a cash impact to the business, nor is it a reflection of the value
received by the recipient (as is the case with share-based payment costs).
3. OTHER AREAS OF JUDGEMENT AND ACCOUNTING ESTIMATES
In the application of the Group's accounting policies, management is required
to make judgements and accounting estimates.
These estimates and underlying 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.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of revision and future periods if the revision affects both current and future
periods.
Whilst these do not meet the definition under IAS 1 of significant accounting
estimates or critical accounting judgement, the recognition of certain
material assets and liabilities is based on assumptions and/or is subject to
longer-term uncertainties. The other areas of judgement and accounting
estimates are set out below.
RECOVERABILITY OF TRADE RECEIVABLES (note 8)
Due to the nature of the business, there are high levels of trade receivables
at the year end and, therefore, a risk that some of these balances may be
irrecoverable. Because amounts due to lawyers are only payable when the Group
has been paid, there is a built-in hedge to this exposure to the extent of
approximately 75%. A variance of 1% in the loss ratio reflected in the
impairment provision would equate to a movement in trade receivables
impairment of £211,021 (2025: £172,840) which, in turn, would result in a
change in the corresponding reduction in trade payables of £158,265 (2025:
£129,630) and an impact to profit of £52,755 (2025: £43,210).
WORK IN PROGRESS (ACCRUED INCOME) (note 8) AND ASSOCIATED ACCRUED LIABILITY
(Note 10)
During each financial year, the business carries out a review of billing
activity to identify what share of each month's billing relates to a period
prior to the start of that financial year. The results of these reviews are
then added to the data derived from similar reviews in previous financial
years and demonstrate a materially consistent performance insofar as to the
share of each given month's billing which relates to a prior financial year. A
fundamental judgement made when performing these reviews is that the contracts
entered into each year have performance obligations with similar
characteristics to those entered into in previous years; for example that the
value of the services provided to the client is transferred evenly over the
period of time that the services are provided. We use this data to generate a
profile of the share of post year-end billing which relates to a previous
financial year. This profile is then applied to the current year's budgeted
billing to calculate the gross value of accrued income at the year end, a
further adjustment is made to this value to reflect the expected credit loss,
this adjustment is not material and as such is not separately disclosed. The
accrued income valuation is then validated by reviewing the actual billing
between the year end and the time the accounts are prepared (representing
approximately 60% of the value of accrued income) to ensure that actual
performance is in line with the expected profile.
Keystone's lawyers' fees are 100% variable and directly associated with the
value of fee income produced. Accordingly, when the Group recognises a value
of accrued income, it also recognises a directly associated accrued liability
in respect of the fees payable to its lawyers for that work which equates to
approximately 75% of the value of accrued income.
Were the actual billing to differ to the budget but all other things remained
equal, then a 1% variance in billing would equate to a movement in revenue of
£146,088 (2025: £79,464). This, in turn, would result in a change in the
associated cost of sale of £109,566 (2025: £59,362) and an impact to profit
of £36,996 (2025: £20,102).
4. EXPENSES BY NATURE
Expenses are comprised of:
2026 2025
£ £
Depreciation 227,213 120,863
Amortisation - intangible assets - 248,543
Amortisation - right-of-use assets 463,861 454,275
Share-based payments 851,320 780,662
Staff costs 8,012,477 6,657,878
Other administrative expenses 8,959,243 7,512,604
18,514,114 15,774,825
Included within staff costs above are the costs of employed fee earners who
are included within cost of sales (2026: £1,663,752; 2025: £1,230,192).
5. FINANCE INCOME AND COSTS
2026 2025
£ £
Finance income
Interest income on bank deposits 3,196,726 1,966,246
Financing costs
Interest on client monies held (684,708) (767,002)
Interest on leases for own use (103,968) (88,041)
Total finance costs (788,676) (855,043)
Net finance income 2,408,050 1,111,203
6. STAFF COSTS
The aggregate payroll costs (including Directors' remuneration but excluding
share-based payment charges) were as follows:
2026 2025
£ £
Wages and salaries 6,715,796 5,674,063
Social security costs 1,010,487 741,316
Pension costs, defined contribution scheme 286,194 242,499
8,012,477 6,657,878
Included within the social security costs above is an amount of £142,654
(2025: £98,652) in respect of employer's national insurance contributions,
which will be payable in respect of shares granted under the Group's LTIP
scheme.
The average number of persons employed by the Group (including Directors)
during the year, analysed by category, was as follows:
2026 2025
£ £
Fee earners 17 13
Administration and support 81 69
Total 98 82
7. EARNINGS PER SHARE
The calculations of earnings per share are based on the following profits and
number of shares:
2026 2025
£ £
Profit attributable to owners of the Parent 11,059,976 8,549,773
Gain in respect of investment held at fair value((1) (184,388) -
Amortisation((1)) - 248,543
Share-based payments((1)) 851,320 780,662
Adjusted earnings 11,726,908 9,578,978
2026 2025
No. of shares No. of shares
Weighted average number of shares
For basic earnings per share 31,671,936 31,554,166
Dilutive effect of grants under LTIP 613,271 547,383
For diluted earnings per share 32,285,207 32,101,549
Basic earnings per share (p) 34.9 27.1
Diluted earnings per share (p) 34.3 26.6
Adjusted basic earnings per share (p) 37.0 30.4
Adjusted diluted earnings per share (p) 36.3 29.8
((1) ) Amounts shown are before tax.
Adjusted basic earnings per share is calculated by taking adjusted basic
earnings and dividing it by undiluted average shares for the year.
8. TRADE AND OTHER RECEIVABLES
Group
2026 2025
£ £
Trade receivables 21,102,102 17,283,997
Provision for impairment of trade receivables (6,675,704) (5,497,587)
Net trade receivables 14,426,398 11,786,410
Receivables from related parties - -
Accrued income 14,656,053 12,856,306
Prepayments 1,959,022 1,919,904
Unbilled disbursements 951,433 842,334
Reimbursement asset 538,148 442,541
Other receivables 256,524 478,050
Total current trade and other receivables 32,787,578 28,325,545
Trade receivables stated above include amounts due at the end of the reporting
period for which an allowance for expected credit loss has not been recognised
as the amounts are still considered recoverable and there has been no
significant change in credit quality.
The provision for impairment of trade receivables (analysed below) is the
expected credit loss based on the ageing of the receivable together with other
specific information of which the Group is aware. For all other categories of
current receivables, there is no difference between the carrying value and the
expected proceeds.
2026 2026 2026 2025 2025 2025
Gross Provision Expected Loss Rate Gross Provision Expected Loss Rate
£ £ % £ £ %
0 to 30 days 7,680,689 382,595 5.0 6,458,897 323,383 5.0
31 to 60 days 2,965,360 296,536 10.0 2,295,345 229,535 10.0
61 to 90 days 1,693,775 169,377 10.0 1,043,915 104,391 10.0
91 to 120 days 810,472 202,618 25.0 958,313 239,578 25.0
4 to 6 months 1,916,457 1,507,267 78.6 1,256,700 801,660 63.8
6 months to 1 year 2,366,264 1,081,319 45.7 2,102,230 1,071,717 51.0
Over 1 year 3,669,085 3,035,992 82.7 3,168,597 2,727,323 86.1
21,102,102 6,675,704 31.6 17,283,997 5,497,587 31.8
The Directors consider that the carrying value of trade and other receivables
approximates to fair value.
The movement in the provision for impairment of trade receivables was as
follows:
2026 2025
£ £
Balance at 1 February 5,497,587 4,812,995
Charge for the year 1,774,951 1,470,788
Amounts written off (596,834) (786,196)
Balance at 31 January 6,675,704 5,497,587
Because the payment terms of the Group's lawyers is "pay when paid", the
impairment of a trade receivable balance automatically generates a directly
related adjustment to trade payables (being approximately 75% of the net value
impaired).
Accrued income, which is stated net of an expected loss provision, has
increased year on year largely in line with revenue, with accrued income days
of 46 as at 31 January 2026 (2025: 48 days).
9. PROVISIONS
Dilapidation Professional Indemnity Total
£ £ Provision
£
At 31 January 2024 227,945 680,000 907,945
Additional provision in the year 15,730 300,316 316,046
Utilisation of provision - (61,756) (61,756)
At 31 January 2025 243,675 918,560 1,162,235
Additional provision in the year 12,125 218,870 230,995
Utilisation of provision - (52,400) (52,400)
At 31 January 2026 255,800 1,085,030 1,340,830
The dilapidation provision in respect of leased premises in Chancery Lane.
The professional indemnity provision represents the current best estimates of
the amounts likely to be needed to settle claims in respect of alleged
professional negligence. These are the gross value before any amount is
reclaimed from insurers under the Group's professional indemnity insurance
policy. These estimates are subject to a high level of uncertainty as they
depend on the outcome of a range of future events and, accordingly, may need
to be updated as circumstances evolve. No separate disclosure is made in
relation to the detail of any such claims, as to do so would be seriously
prejudicial to the position of the Group
Separately, the Group recognises expected reimbursements from professional
indemnity insurance associated with this provision within trade and other
receivables (note 8). The table below shows the gross and net position.
Professional Indemnity provision Reimbursement asset Net
£ £ £
At 31 January 2025 918,560 442,541 476,019
At 31 January 2026 1,085,030 538,148 546,882
10. TRADE AND OTHER PAYABLES
Company Group
2026 2025 2026 2025
£ £ £ £
Trade payables - - 12,118,282 10,222,352
Accrued expenses 31,247 37,221 13,702,473 11,529,447
Social security and other taxes - - 303,585 233,439
Total trade and other payables 31,247 37,221 26,124,340 21,985,238
Included within the above accrued expenses is the liability for lawyer fees
associated with the accrued income (2026: £10,956,578; 2025: £9,595,543).
The Group's exposure to market and liquidity risks related to trade and other
payables is disclosed in the financial risk management and impairment of
financial assets note. The Group pays its trade payables on terms and as such
trade payables are not yet due at the reporting dates.
The fair values of the financial assets are not materially different to their
carrying values due to the short-term nature of the current assets. Impairment
losses on trade receivables and accrued income disclosed in note 9 represent
the only impairment gains or losses on financial instruments during the year.
FINANCIAL LIABILITIES
0 to 6 months 7 to 12 months 1 to 5 years Pay when paid Total
£ £ £ £ £
Trade payables 88,836 - - 12,029,446 12,118,282
Accrued expenses 2,364,973 211,721 169,201 10,956,578 13,702,473
Lease Liabilities 297,424 297,424 1,228,799 - 1,823,647
At 31 January 2026 2,751,233 509,145 1,398,000 22,986,024 27,644,402
0 to 6 months 7 to 12 months 1 to 5 years Pay when paid Total
£ £ £ £ £
Trade payables 175,700 - - 10,046,652 10,222,352
Accrued expenses 1,544,202 210,000 179,702 9,595,543 11,529,447
Lease Liabilities 297,424 297,424 1,823,647 - 2,418,495
At 31 January 2025 2,017,326 507,424 2,003,349 19,642,195 24,170,294
Financial liabilities are held at amortised cost. There is no significant
difference between the fair value and carrying value of financial instruments.
Amounts shown as pay when paid in the tables above, principally, reflect
amounts payable in respect of lawyers' fees, as well as amounts payable to
third-party counsel and experts whose fees have been incurred on behalf of the
Group's clients as disbursements. Lease liabilities are shown at their
undiscounted value.
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