Full year results for the year ended 31 January 2024

- Strong revenue and profit growth supports the Group’s progressive dividend policy
- Recruitment conditions continued to improve during FY 2024, with Keystone adding 51 new Principals

Keystone, the network and tech-enabled challenger law firm, is pleased to announce its full year results for the year ended 31 January 2024 ("2024").

Financial Highlights:

  • Revenue growth of 15.1% to £87.9 million (2023: £76.4 million*)
  • Revenue per Principal up 10% to £212k (2023: £193k)
  • Adjusted PBT of £11.3 million (2023: £9.2 million) representing an adjusted PBT margin of 12.8% (2023: 12.1%)
  • Adjusted basic EPS of 27.4p (2023: 24.2p)
  • Cash generated from operations up 11.8% to £10.4 million (2023: £9.3 million) with operating cash conversion of 96.1% (2023: 96.5%); the Group remains debt-free
  • Paid interim ordinary dividend of 5.8p per share and special dividend of 12.5p per share
  • Proposed final ordinary dividend of 12.5p per share (2023: 11.2p), bringing the total ordinary dividend per share for the year to 18.3p (2023: 16.1p)


Operational Highlights:

  • The Group experienced sustained client demand across practice areas in 2024
  • 2024 has seen a positive shift in the recruitment market, with the “war for talent” that had characterised the previous couple of years having subsided:
    • Received 270 high-calibre new applicants in the period (2023: 232)
    • 51 new Principals joined in the year, increasing the number of Principals to 432 (2023: 398), with the vast majority of new recruits coming from top 100 law firms
    • Recruitment of Pod Members continues to grow with the Group ending the period with 102 (2023: 95)
  • Total fee earners increased to 549 (2023: 507)
  • The Group continued to deliver opportunities for professional networking and community building across the year, underpinning Keystone’s differentiated corporate culture

Current Trading and Outlook:

  • The Group has made a positive start to the new year with ongoing client demand across practice areas
  • We continue to attract a good flow of high-quality candidates
  • The Board remains confident that this will be another successful year, delivering results in line with current market expectations

James Knight, Chief Executive Officer of Keystone, commented:

“It has been another extremely successful year for Keystone and it has been very gratifying to see a return to recruitment levels last experienced pre-pandemic.

The strength of our operational and financial performance across 2024 has enabled the Group to maintain its longstanding progressive dividend policy, returning over £30m to shareholders since listing on AIM in 2017. 

We enter the new financial year confident in the ability of the business to continue to deliver high quality earnings and sustainable growth in the year ahead.”

Analyst Briefing

A meeting for analysts will be held virtually at 9.30am this morning. Analysts wishing to attend this event can register via email at [email protected].

Retail Investor Presentation

Keystone's management team will provide a separate presentation and Q&A for investors at 1.00pm on Monday 22 April 2024.

The presentation will be hosted on the Investor Meet Company digital platform, where questions can be submitted pre-event up until 9.00am on the day before the meeting, or at any time during the live presentation.

To sign up to IMC, please visit: www.investormeetcompany.com/keystone-law-group-plc/register-investor


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I am pleased to introduce Keystone Law’s results for the year ended 31 January 2024.

It has been another good year for the business, with sustained client demand and a return to recruitment levels last seen pre pandemic. The Group has delivered a strong set of financial results with revenue growing 15.1% to £87.9m (2023 (restated): £76.4m), and adjusted PBT(1) increasing to £11.3m representing an adjusted PBT margin of 12.8% (2023 (restated): £9.2m, 12.1%) (PBT of £10.3m (2023: £8.4m) and PBT margin of 11.7% (2023: 11.0%)). These impressive results reflect the high levels of activity among our lawyers and the continued growth of the firm, as well as the strength of our balance sheet in this period of higher interest rates. The cash generative nature of the business model has meant that cash generated from operations has increased to £10.4m (2023: £9.3m) representing an operating cash conversion of 96.1% (2023: 96.5%).


At the half year, in light of the strength of the balance sheet and our confidence in the future, we paid a special dividend of 12.5p per share. This brought the total dividends paid since IPO to just under 92p(2) per share, or 100% of the EPS earned over the same period.

Having paid an ordinary interim dividend of 5.8p (2023: 5.2p) the Board is proposing to pay a final ordinary dividend for the year ended 31 January 2024 of 12.5p per share (2023: 10.9p), bringing the total ordinary dividend for the year to 18.3p (2023: 16.1p).

OUR PEOPLE and culture

Fundamental to the ongoing success of Keystone are its people and its culture. As we continue to grow, as a Board we are mindful to ensure that the factors which have made us successful are sustained and enhanced as we continue to evolve the business.  We dedicate significant energy in ensuring that our culture is successful, enjoyable, inclusive and supportive and we work hard to ensure that that this is firmly embedded in every aspect of life at Keystone.


The Board has continued to operate within the structures and governance requirements of the Quoted Companies Alliance (“QCA”) Code 2018 as set out in the corporate governance section. In November 2023, the QCA issued a revised code which is to apply to financial years starting on or after 1 April 2024. The Board has decided to adopt the new requirements regarding re-election of Directors early and accordingly, all directors will stand for election / re-election on an annual basis with effect for the first time at our AGM in June 2024. We will look to implement all remaining new requirements on a timely basis to ensure that we remain compliant with the new code as it takes effect.

Salar Farzad joined the Board in March 2023 as Non-executive Director and, following Simon Philips’ resignation in April 2023, assumed the role of Chair of the Audit Committee.


I am pleased to say that 2025 has started well. Our lawyers remain busy and early recruitment activity provides us with confidence in the year ahead.


Robin Williams
Non-executive Chairman
17 April 2024


(1)     Adjusted PBT is calculated by adding share-based payment costs and amortisation of intangible assets to PBT. Details of these calculations are shown in the Financial Review.

(2)     Sum of the Ordinary DPS paid for the years ended 31 January 2019 to 31 January 2023, together with the special dividends DPS paid to date.


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I am delighted to report that Keystone has delivered a strong trading performance this year, with growth across all key performance indicators.

We have experienced sustained client demand across practice areas and this, together with the impact of those Principals(1) who have joined us has continued to drive growth, increasing revenue by 15.1% to £87.9m (2023: £76.4m (restated)), whilst adjusted PBT increased to £11.3m (2023: £9.2m) (PBT of £10.3m (2023: £8.4m) and PBT margin of 11.7%(2023: 11.0%)). As always, the strongly cash generative nature of our model has ensured that these profits have converted to cash, with cash generated from operations of £10.4m (2023: £9.3m). 

In light of the strength of the balance sheet and our confidence in the future, we paid a special dividend of 12.5p (£3.9m) together with the interim ordinary dividend and this meant that total dividends paid in the year amounted to £9.2m leaving closing cash of £8.4m.

The legal industry “war for talent” has also subsided somewhat this year, and, following a challenging couple of years on the recruitment front, it has been very gratifying to see a return to the level of recruitment we last experienced pre pandemic and very pleasing to welcome a further 51 high calibre Principals this year.


We have always held the view that the key to driving long term stakeholder value in Keystone is the quality of the lawyers we recruit. Focusing on quality, and not just quantity, creates a virtuous circle, attracting lawyers who are, or who aspire to be, at the top of the profession.  To date this approach has served us well, driving growth, reducing risk and continually enhancing our reputation within the legal profession; ensuring that as we have grown, we have moved up the value chain in terms of the lawyers attracted to join us.  The recognition of our model by the mainstream legal establishment has undoubtedly been accelerated by the changes in attitude towards flexible working practices brought about by the pandemic’s lockdown. Our ability to offer an increasingly attractive proposition to those at the top of the profession is clearly evidenced by the fact that over a quarter of the Principals who joined us this year (up from less than 15% in each of the two years pre pandemic) came directly from the UK office of large US law firms or top 25 UK law firms(2).

Furthermore, the vast majority of Keystone lawyers continue to be recruited from top 100 law firms which demonstrates that quality is the determining trait when considering whether to make an offer to a candidate or not.  This continued focus on quality has been essential in building Keystone’s brand and it is extremely gratifying to see both the number of our lawyers who have been recognised in the Legal 500 UK Solicitors 2024 ranking(3) (172 listed) as well as the evolution of this recognition in recent years (65 Keystone lawyers listed in Legal 500 2019).


This year we have seen a positive shift in the recruitment market as the extremely high levels of demand, which had characterised the “war for talent” during the previous couple of years, has subsided.  That said, recently increased salaries across the industry, together with the high interest rates and general uncertainty in the economic outlook has continued to weigh on candidate appetite for change.  Against this backdrop, the activity levels and results achieved in the year have been highly satisfactory. 

During the period we received 270 qualified applicants (2023: 232), made offers to 103 candidates (2023: 79) with 68 candidates accepting offers(4) (2023: 42).  Whilst welcoming 51 new joiners (2023: 32) meant that we have ended the year with 432 Principals (2023: 398).  Our Principals have also continued to drive growth through the recruitment of Pod Members, ending the period with 102 (2023: 95), this aspect of the business model is now completely standard with between 15% and 20% of each year’s cohort of lawyers choosing to build and run their practice in this way.

(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 the recruitment team in central office to ensure that they are of the requisite quality and calibre. As is the case for the Principal lawyers, these juniors sign a compliance agreement with Keystone and are required to comply with all rules and regulations governing the professional conduct of Keystone’s lawyers.

(2)     The Lawyer Survey 2023 ranking by revenue

(3)     The Legal 500 UK Solicitors 2024 rankings is the leading guide to law firms and solicitors in the UK (Source: Legal500.com)

(4)     Historically, approximately 15% of candidates who accept offers subsequently don’t join.



As ever, the Central Office team has had a busy year, providing the full range of support that our lawyers need.  It has been another active year for our community and engagement team as it has organised the regular networking and social activities which are such a fundamental element of the ongoing success of the business.  These well-attended events deliver technical and commercial updates as well as professional networking and community building opportunities which ensure that our lawyers feel a real sense of belonging and cohesion within the firm. As we continue to grow, our focus is always to ensure that this important cultural aspect of the business scales with us.

The constantly evolving world of IT ensures that the team is always busy.  As always, IT security is a key focus for the team and ongoing investment of time and resources is essential to ensure that our IT platform remains safe and secure at all times.  We also continue to monitor the evolution of AI, with particular interest in how this technology will affect how we do business.  Many of the tools which we use already have some element of AI built into them, however, this is such a fast-moving area that it is likely we will see significant steps forward in wider adoption of AI in the years ahead.


We have experienced a positive start to the new financial year with Keystone continuing to take advantage of ongoing client demand across practice areas.  So far this year, conditions in the recruitment market remain as they were during 2024 and we continue to attract a good flow of high-quality candidates.  All this provides us with confidence that 2025 will be another good year during which Keystone will deliver continued sustainable growth and strong results, in line with current market expectations.


James Knight
Chief Executive
17 April 2024


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The following KPIs are used by the management to monitor the financial and operational performance of the Group:

  • Revenue growth: 15.1% increase (2023: 7.4% (restated))
  • Adjusted PBT growth: 22.0% increase (2023: 1.1%)
  • Adjusted PBT margin(3): 12.8% (2023: 12.1%(restated))
  • PBT growth: 22.9% increase (2023: 0.3%)
  • PBT margin: 11.7% (2023: 11.0%(restated))
  • Adjusted basic EPS: 27.4p (2023: 24.2p)
  • Operating cash conversion 96.1%(1) (2023: 96.5%)
  • Trade receivables days: 34 (2023: 36)
  • Qualified new applicants(2): 270 (2023: 232)
  • Offers made(2): 103 (2023: 79)
  • Offers accepted(2): 68 (2023: 42)


1 Operating cash conversion is calculated utilising cash generated from operations and dividing it by the PBT before non-cash movements and net interest (£10,854,775 per cashflow statement 2024).

2Non-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.



I am pleased to report revenue for the year of £87.9m, an increase of 15.1% on the prior year.  As a business, we have seen sustained client demand across practice areas this year which has been further supplemented by the growth in Principal numbers achieved (ending the period with 432 Principals and averaging 415 (2023: ended with 398 and averaged 396).  This has enabled revenue per Principal to grow by 10% to £212k (2023: £193k (restated) £190k (reported))


The gross profit of the business has risen this year by 15.4% to £22.8m (2023: £19.9m (restated)), with gross profit margins remaining stable at 26%.


Amortisation, both of right of use assets and intangible assets, remained unchanged year on year with no changes to the underlying assets, whilst there has been a marginal increase in depreciation. The charge in respect of share-based payments increased from £0.5m to £0.6m.


Other administrative expenses have increased by 16.6% to £11.6m (2023: £9.9m). Staff costs, increased by 11% to £4.7m (2023: £4.2m), against the backdrop of ongoing wage inflation across the economy, whilst average headcount has increased from 59 to 63 as we have continued to invest in the Central office team to support the ongoing development of the business. Other administrative costs (per note 3) increased by 20.8% to £6.9m (2023: £5.7m), with the largest contributory factors to this being recruitment fees and professional indemnity insurance.  Recruitment fees are up £0.4m, as both the number and size of practice of those Principals joining through agencies increasing this year, whilst professional indemnity insurance costs have increased by £0.3m driven predominantly by revenue growth and to a lesser extent by the ongoing hardening of the insurance market. 


The last two years has seen a significant step change in the interest rate environment, with rates having risen consistently from virtually nil at the start of the prior year to the current level where it has remained since August 2023.  Accordingly, as a cash positive business, our net finance income has risen significantly over the period, contributing £0.9m to profit this year (2023: £0.1m).


Adjusted PBT is calculated as follows:

Profit before tax 10,306,3318,384,677
Amortisation of intangible assets 350,884350,884
Share based payments 610,644502,708
Adjusted PBT 11,267,8599,238,269
Net Finance Income 889,20474,721
Adjusted PBIT 10,378,6559,163,548
PBT margin(1)11.7%11.0%
Adjusted PBIT margin(1)11.8%12.0%
Adjusted PBT margin(1)12.8%12.1%


(1)     2023 margins have been restated to reflect the prior year restatement of revenue (see note 1)

The growth in revenue and gross profits have driven a 13% increase in adjusted PBIT. This represents an 11.8% margin, which is slightly down on the prior year (2023: 12.0%) as we experienced a sizeable increase in recruitment costs, caused by more Principals with larger practices joining via recruitment agencies. Profit before tax and adjusted profit before tax have increased by 22.9% and 22.0% respectively, with margins also stepping up as the contribution of finance income more than compensated for the change in adjusted PBIT margin.


In April 2023, the standard rate of corporation tax increased from 19% to 25% and accordingly, the average standard rate for this financial year has been 24%. The increase in the standard rate has caused a step up in the Group’s effective tax rate to 25.8% (2023: 19.7%).  The effective rate of the Group is always higher than the standard rate due to the level of investment we make in in providing networking opportunities in social environments for our lawyers which are disallowable for corporation tax purposes.


Basic earnings per share increased from 21.5p to 24.4p, with fully diluted EPS being 23.9p (2023: 21.2p). 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 27.4p (2023: 24.2p).



The Group’s business model is strongly cash generative because its most significant cost, the fees paid to lawyers, is only paid once Keystone has been paid for the work it has delivered. Operating cash conversion, which had been particularly strong in 2023, has remained strong this year at 96.1% (2023: 96.5%), generating cash from operations of £10.4m (2023: £9.3m). Capital expenditure was £0.07m (2023: £0.06m). Corporation tax payments increased to £2.2m (2023: £2.0m), reflecting the increase in profits (corporation tax is paid in quarterly instalments with half being due after the financial year end). The change in the interest rate environment has manifested itself in the step up in net interest received of £0.9m (2023: £0.1m) and lease repayments of £0.6m (2023: £0.5m). As such, cash generated by the business in the year, being net cash flow pre dividend payments, was £8.4m (2023: £6.9m). The Group paid dividends of £9.2m, £5.3m in respect of ordinary dividends (2023: £5.2m ordinary dividend) and £3.9m as a special dividend, paid with the ordinary interim dividend (2023: £3.1m paid together with the final ordinary dividend from year ended 31 January 2022). This left closing cash of £8.4m (2023: £9.2m) and no debt.


The Group’s balance sheet is extremely strong with net assets having decreased from £17.9m to £16.9m by virtue of profit for the year of £7.6m, dividends paid of £9.1m and £0.6m movement in reserves to account for the vesting of LTIP awards.


In light of the strength of our balance sheet and our confidence in the future, at the half year the Board took the decision to pay both a special dividend of 12.5p per share (£3.9m) and an interim ordinary dividend of 5.8p per share (2023: 5.2p). The Board is now proposing to pay a final ordinary dividend for the year ended 31 January 2024 of 12.5p per share (2023: 10.9p). This brings the total ordinary dividend for the year to 18.3p per share (2023: 16.1p per share). Subject to approval at the Annual General Meeting, the final dividend will be paid on 21 June 2024 to shareholders on the register at the close of business on 14 June 2024.

The cash value of dividends paid this year of £9.2m includes £3.9m of special dividend.

On behalf of the Board

Ashley Miller
Finance Director
17 April 2024


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Revenue  87,930,626 76,405,908
Cost of sales  (65,101,369) (56,545,943)
Gross profit  22,829,257 19,859,965
Trade receivables impairment  (1,471,291) (1,145,978)
Corresponding reduction in trade payables  1,088,755 859,483
  (382,536) (286,495)
Depreciation and amortisation 3 (897,814) (885,699)
Share-based payments 3 (610,644) (502,708)
Other administrative expenses 3 (11,573,319) (9,927,058)
Other operating income  52,183 51,951
Operating profit  9,417,127 8,309,956
Finance income 4 1,575,930221,810
Financing costs 4 (686,726) (147,089)
Profit before tax  10,306,331 8,384,677
Corporation tax  (2,656,641) (1,650,968)
Profit and total comprehensive income for the year attributable to equity holders of the Parent  7,649,690 6,733,709
Basic EPS (p) 6 24.4 21.5
Diluted EPS (p) 6 23.9 21.2

*See note 2

The above results were derived from continuing operations.


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 Note 2024
Non-current assets    
Property, plant and equipment    
Owned assets  120,517 187,677
Right-of-use assets  2,428,005 513,577
Total property, plant and equipment  2,548,522 701,254
Intangible assets  5,055,954 5,406,838
Investments  129,350 13,628
  7,733,826 6,121,720
Current assets    
Trade and other receivables 7 25,194,349 22,605,908
Cash and cash equivalents  8,367,072 9,151,875
  33,561,421 31,757,783
Total assets  41,295,247 37,879,503
Equity and liabilities    
Share capital  62,963 62,732
Share premium  9,920,760 9,920,760
Share-based payments reserve  1,059,531 1,028,247
Retained earnings  5,896,437 6,847,378
Equity attributable to equity holders of the Parent  16,939,691 17,859,117
Non-current liabilities    
Lease liabilities  2,027,866 109,484
Deferred tax liabilities  49,699 132,432
Provisions 8 907,945 183,501
  2,985,510 425,417
Current liabilities    
Trade and other payables 9 19,782,587 18,347,358
Lease liabilities  344,804 538,544
Corporation tax liability  1,242,655 709,067
  21,370,046 19,594,969
Total liabilities  24,355,556 20,020,386
Total equity and liabilities  41,295,247 37,879,503


Ashley Miller
17 April 2024

Keystone Law Group Plc

Registered No. 09038082



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  Attributable to equity holders of the Parent


Share based
payments reserve

Retained earnings

At 31 January 2022  62,548 9,920,760 749,958 8,150,365 18,883,631
Profit for the year and total comprehensive income  6,733,709 6,733,709
Transactions with owners       
Dividends paid in the year  (8,261,115) (8,261,115)
Share-based payments vesting  184 (224,419) 224,419 184
Share-based payment awards  502,708 502,708
At 31 January 2023  62,732 9,920,760 1,028,247 6,847,378 17,859,117
Profit for the year and total comprehensive income   7,649,690 7,649,690
Transactions with owners  
Dividends paid in the year   (9,179,991) (9,179,991)
Share-based payments vesting  231 (579,360) 579,360 231
Share-based payment awards   610,644 610,644
At 31 January 2024  62,963 9,920,760 1,059,531 5,896,437 16,939,691


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 Note 2024
Cash flows from operating activities    
Profit before tax  10,306,331 8,384,677
Depreciation and amortisation 3 897,814 885,699
Share-based payments 3 610,644 502,708
Revaluation of other assets  (70,810)
Finance income 4 (1,575,930) (221,810)
Financing costs 4 686,726 147,089
  10,854,775 9,698,363
Working capital adjustments    
Increase in trade and other receivables  (2,588,441) (2,632,094)
Increase in trade and other payables  1,435,229 2,204,192
Increase in provisions  724,444 75,556
Cash generated from operations  10,426,007 9,346,017
Interest paid  (615,726) (70,791)
Interest portion of lease liability  (71,468) (76,298)
Corporation taxes paid  (2,205,784) (1,964,281)
Cash generated from operating activities  7,533,029 7,234,647
Cash flows from/(used in) investing activities    
Interest received  1,575,930 221,810
Purchases of property, plant and equipment  (68,910) (64,080)
Investment in other assets  (44,812)
Net cash generated by investing activities  1,462,208 157,730
Cash flows from financing activities    
Proceeds from issue of ordinary shares  231 184
Lease repayments  (600,280) (462,247)
Dividends paid in year  (9,179,991) (8,261,115)
Net cash used in financing activities  (9,780,040) (8,723,178)
Net decrease in cash and cash equivalents  (784,803) (1,330,801)
Cash at 1 February  9,151,875 10,482,676
Cash at 31 January  8,367,072 9,151,875



Notes to the Financial Statements are available in the printable PDF version