REG - Keystone Law Grp PLC - Half Year Report
Tue 07:00
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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 (http://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
(http://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:
H1 2026 saw 30 new Principals join us, bringing the total number of Principals
to 472 (31 January 2025: 455), with the total number of fee earners increasing
to 612 (31 January 2025: 576). Our continued drive for excellence across all
aspects of our business remains at the heart of our recruitment strategy and
the calibre of those lawyers who have joined us in the Period is further
testament to this.
The central office team has continued to deliver the first-class
infrastructure and support our lawyers need to excel. The efforts of our
community and engagement team continue to be rewarded, whether that be through
the successful onboarding and integration of new lawyers or through the
positive feedback we receive from across the lawyer base regarding the
thriving community and excellent events we run to bring our people together.
We have recently started a brand refresh project, working with external brand
advisers to update our brand imagery so that it aligns more accurately with
the law firm we are today and our position within the legal market. This
project will continue to run through the second half of this year with
implementation anticipated to span the end of this financial year.
For our IT team, the evolution of AI has created an exciting and rapidly
evolving area of focus and opportunity. As reported in our last annual report
and accounts, the development of this technology within the sector remains in
its infancy, however, it is evolving extremely rapidly. Most legal IT tools
now claim to include some elements of AI and there are also a substantial
number of new entrants to the market, all promising an AI revolution. As in
everything we do, our AI strategy is focused on delivering real value,
providing real-life solutions to challenges experienced by our lawyers and /
or central office team and bringing efficiencies and enhanced user experience
across the business.
During the Period, we have rolled out a number of generative AI tools, which
are available as extensions to the market leading products we already provide
to our lawyers. These include the ability for our lawyers to produce file
notes of Teams meetings in seconds and for our lawyers to use generative AI
solutions across any documents held within NetDocuments (our secure
cloud-based document management system). We have developed an internal tool
using generative AI as well as an element of agentic AI. This enables our
lawyers to interrogate our voluminous Operating Manual using basic English
language queries providing them with logical answers as well as links to the
relevant sections of the manual; taking only seconds. We have also worked with
expert external consultants to identify areas where the deployment of bespoke
agentic AI agents could deliver efficiency and enhance user experience across
the business. We are now reviewing the output from this work in order to
prioritise development and implementation which we anticipate will commence
later this year. We continue to explore the market, testing other market
leading products and considering what value these may bring to our lawyers.
I would like to take this opportunity to thank my colleagues across all teams
of the central office for their dedication and passion, which continues to
drive the business forwards and has made these results possible.
Dividend
I am pleased to announce that the Board has declared an interim ordinary
dividend of 7.5p per share. This dividend will be payable on 24 October 2025
to shareholders on the register on 3 October 2025, and the shares will go
ex-dividend on 2 October 2025.
Summary and outlook
We are delighted with the overall success of H1 2026 results. Keystone has
produced another strong performance delivering high quality, sustainable
growth, driving the business forwards and reasserting our position as market
leader.
Although there remains global economic uncertainty, from which the UK is not
exempt, we remain positive in the ongoing success of Keystone. In light of the
success of our H1 2026 performance, together with the positive start we have
had to H2 2026, the Board now expects that Keystone will deliver both revenue
and adjusted PBIT, for FY 2026, ahead of current market
expectations((2)),whilst the ongoing benefit of the renegotiated bank interest
rates means that adjusted PBT will be comfortably ahead of current market
expectations.
James Knight
Chief Executive Officer
22 September 2025
(1) Adjusted PBIT and adjusted PBT are calculated using profit before tax and
adding back amortisation in the prior period and share-based payments for all
periods.
(2) Management understands current market expectations for FY 2026 to be
revenue of £103.6m and adjusted PBIT and adjusted PBT of £12.0m and £12.9m
respectively.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 31 July 2025
Note 6 months to July 2025 6 months to July
(Unaudited) 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 5,206,762 4,051,320
holders of the Parent
Basic EPS (p) 1 16.5 12.9
Diluted EPS (p) 1 16.2 12.6
The above results were derived from continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 July 2025
Note 31 July 2025 31 July 2024 31 January 2025
(Unaudited) (Unaudited) (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
The interim statements were approved and authorised for issue by the Board of
Directors on 22 September 2025 and were signed on its behalf by:
A Miller
Director
consolidated statement OF CHANGES IN EQUITY
For the period ended 31 July 2025
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
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 July 2025
Note 6 months to July 2025 6 months to July Year ended 31 January 2025
(Unaudited) 2024 (Audited)
£ (Unaudited) £
£
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
NOTES TO THE interim report
1. General Information
The Company was incorporated as Keystone Law Group Limited on 13 May 2014
under the Companies Act 2006 (registration no. 09039092) 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 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 Interim Report is presented in Pounds Sterling, being the functional
currency of the companies within the Group.
ACCOUNTING POLICIES
STATEMENT OF COMPLIANCE
The Interim Report has been prepared in accordance with the recognition and
measurement principles of UK-adopted International Accounting Standards.
BASIS OF PREPARATION
The Interim Report does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006. The Group's statutory financial
statements for the year ended 31 January 2025 have been filed with the
Registrar of Companies. The auditor's report on those financial statements was
unqualified and did not contain a statement under Section 498 (2) or (3) of
the Companies House 2006. The Interim Report information has been prepared in
accordance with the recognition and measurement principles of UK adopted
International Accounting Standards, and on the same basis, and using the same
accounting policies, as used in the financial statements for the year ended 31
January 2025.
The Interim Report has not been audited or reviewed, in accordance with the
International Standard on Review Engagement 2410 (UK) issued by the Financial
Reporting Council ("FRC").
GOING CONCERN
The Interim Report has been prepared on a going concern basis as the Directors
have reasonable expectation that the Group has adequate resources to continue
in operational existence for the foreseeable future. The Group has no debt, is
strongly cash generative and has a strong trading performance. The Group's
forecasts and projections show that the Group has sufficient resources for
both current and anticipated cash requirements.
ACCOUNTING DEVELOPMENTS
There have been no new standards or interpretations relevant to the Group's
operations applied in the Interim Report for the first time.
ADJUSTED PBT
Adjusted PBT is utilised as a key performance indication for the Group and is
calculated as follows:
6 months to July 2025 6 months to July
(Unaudited) 2024
£'000 (Unaudited)
£'000
Profit before tax 6,932 5,544
Amortisation - 175
Share-based payments 409 379
Adjusted PBT 7,341 6,098
Earnings per Share
Basic earnings per share is calculated by dividing the profit for the period
by the weighted average number of ordinary shares outstanding during the
period. The weighted average number of shares in the period was 31,625,863 (H1
2025: 31,515,028) and the basic earnings per share was 16.5p (H1 2025: 12.9p).
Diluted earnings per share is calculated by dividing the same profit by the
weighted average number of ordinary shares, taking into account the dilution
effect from grants made under the Long Term Incentive Plan (32,210,899; H1
2025: 32,041,554). Diluted earnings per share was 16.2p (H1 2025: 12.6p).
The adjusted earnings per share was 17.8p (H1 2025: 14.6p), whilst the diluted
adjusted earnings per share was 17.4p (H1 2025: 14.4p). Adjusted earnings are
stated by making the same adjustments to earnings as those made in calculating
adjusted PBT.
2. Expenses by Nature
Expenses are comprised of: 6 months to July 2025 6 months to July
(Unaudited) 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
Included within staff costs above are the costs of employed fee earners who
are included within cost of sale (H1 2026: £801,018; H1 2025: £628,270).
3. Trade and Other Receivables
31 July 2025 31 July 2024 31 January 2025
(Unaudited) (Unaudited) (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
4. DIVIDENDS
The Directors have declared an interim ordinary dividend of 7.5p per share (H1
2025: ordinary dividend of 6.2p per share). The dividend will be paid on 24
October 2025 to shareholders on the register on 3 October 2025, with the
shares going ex-dividend on 2 October 2025. In accordance with IAS10 "events
after the balance sheet date", these dividends have not been reflected in the
Interim Report.
Keystone Law
48 Chancery Lane London WC2A 1JF
www.keystonelaw.co.uk
(file:///C%3A/Users/Ashley.Miller/Downloads/www.keystonelaw.co.uk)
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