Half year results for the six months
ending 31 July 2021


Strong financial performance; well positioned to capitalise on opportunities in the recruitment market

Keystone Law Group plc (AIM: KEYS), the fast growing, UK Top 100, challenger law firm, today announces its half year results for the six months ended 31 July 2021 ('H1-2022').


Financial Highlights

  • Revenue of £33.7 million (up 37.6% on H1-2021; up 10.2% on H2-2021)
  • PBT of £4.3 million (up 118% on H1-2021; up 23.1% on H2-2021)
  • Adjusted PBT of £4.6 million (up 109% on H1-2021; up 22.4% on H2-2021)
  • Basic EPS of 10.8 pence, up 116% from 5.0 pence in H1-2021
  • Adjusted EPS of 11.9 pence, up 105% from 5.8 pence in H1-2021
  • Cash generated from operations of £4.2 million, up 27.2% from £3.3 million in H1-2021
  • Maintained robust cash position of £7.2 million, remain debt free
  • Declared interim dividend of 4.5p

Strategic Highlights

  • Activity levels across all practice areas have been very high throughout the period.
  • Conditions in the recruitment market have been similar to those of H2-2021, with 136 qualified new applicants (H2-2021: 108) and 28 accepted offers (H2-2021: 29).
  • Our unique and operationally efficient model continues to drive strong organic growth with 21 new joiners growing the number of Principals to 386 (H1-2021: 347).
  • Lawyers have grown their practices to support increased activity, with 83 (31 January 2021: 74) Pod members operating across 48 Pods.
  • The business now has a total of 479 fee earners (H1-2021: 426).
  • Our collaborative and supportive culture is at the heart of Keystone, being a fundamental element of what attracts and retains our lawyers. As such, throughout the first half we have used technology to continue delivering a broad range of social and networking opportunities to our lawyers.

Current trading and outlook

  • Activity remains buoyant and we are well positioned to take advantage of the opportunities that will result from the further impetus generated in the legal recruitment market as the Covid-19 restrictions are fully relaxed and potential candidates are required to return to the office during the second half of this year. As such, We are confident that we will deliver another good performance during the rest of this year which will be materially ahead of current market expectations.

James Knight, Chief Executive Officer of Keystone Law, commented:

We have delivered another impressive set of results, continuing to grow our lawyer base and demonstrating strong increases in both revenue and profit, all of which once again validates the attractive nature of the Keystone model.

The legal market remains very busy and we are well positioned to take advantage of the further opportunities which we believe the “return to work” will present.

I am looking forward to carrying on delivering strong results in second half of the year.

Chief Executive Officer’s Statement

I am delighted to report that Keystone has delivered a very strong financial performance in the first half of this financial year (‘H1-2022’ or the ‘period’), with revenue rising to £33.7m (37.6% up on H1-2021: £24.5m, 10.2% up on H2-2021: £30.6m), reported PBT of £4.3m (up 118% on H1-2021: £1.9m, up 23.1% on H2-2021 £3.5m), adjusted PBT(1) of £4.6m (up 109% on H1-2021: £2.2m, up 22.4% on H2-2021 £3.8m) and cash generated from operations of £4.2m up 27.2% (H1-2021: £3.3m, H2-2021: £3.3m).

Throughout the period, the business has continued to perform extremely well.  The ongoing Covid-19 restrictions have had no detrimental effect on the operational efficiency of the model; a model which was described at the Lawyer Awards 2020 as being “vindicated in spades” and “light years ahead” and this has been demonstrated in the financial results.

Activity levels across all practice areas have been very high throughout the period as the economy has opened up and, to some small degree, changes to stamp duty and the rumoured changes to the capital gains tax regime have driven demand across the legal industry. Furthermore, the Covid-19 restrictions on movement have reduced the normal seasonal downturns often experienced around Easter and the early summer months. The total number of Principals(2) has grown to 386, with 21 joining in the period (H1- 2021: 27).  The increased activity has also driven continued growth in the demand for junior support, delivered both through the Pods(2) and the Central office lawyers. As a result, we have had 16 new Pod members join taking the total number of Pod members to 83 (31 January 2021: 74) across 48 Pods (31 January 2021: 44), whilst the number of central office lawyers has increased by 1 to 10.  All of which means that we now have a total of 479 fee earners (31 January 2021: 452).

The conditions in the recruitment market during the period have been more akin to those experienced in H2-2021 than during H1-2021 as the ongoing disruption and uncertainty caused by Covid-19 restrictions, now combined with the generally robust levels of activity across the legal industry, encouraged high quality candidates to remain where they are rather than seek new opportunities.  Accordingly, qualified new candidate applications in the period were 136 compared to 145 during the same period last year and 108 during H2-2021. We extended offers to 36 candidates (H1-2021 53, H2-2021 28) and 28 candidates accepted offers in the period (H1-2021 41, H2-2021 29). 

The central office team have continued to rise to the challenge of delivering the broad and varied array of social and networking opportunities, albeit that these have had to be online rather than in person, which form such an important part of maintaining the cohesive Keystone culture. These events are an essential means by which both new and existing lawyers develop and maintain the internal networks and relationships which underpin the collegiate spirit of Keystone.  It is this networked collegiate approach which so successfully delivers multi lawyer and cross disciplinary solutions to our clients.


I am pleased to announce that the Board has declared an interim dividend of 4.5p per share in line with our stated dividend policy. The dividend will be payable on 15 October 2021 to shareholders on the register on 24 September 2021 and the shares will go ex-dividend on 23 September 2021.

Summary and Outlook

In summary, I am extremely pleased with the financial performance of the period.  The activity levels across the business have driven strong revenue and slightly enhanced gross profit margins as the utilisation of the central office lawyers has recovered following a slowdown last year. This, together with some cost savings resulting from Covid-19 restrictions, has generated a highly profitable set of results.

The prolonged period of uncertainty which the Covid-19 restrictions have caused, combined with the expectation that these restrictions would soon be ending has undoubtedly dampened the appetite of some high quality candidates to seek new opportunities for the moment and in light of these conditions I am satisfied with the growth in the lawyer base that we have achieved.

Looking ahead, activity remains buoyant and I am confident that the relaxation of the Covid-19 restrictions and more significantly, the return to office which will generally affect potential candidates during the second half of this year will serve to provide further impetus to the legal recruitment market and we are well positioned to take advantage of the opportunities that this will present.  As such, I am confident that we will deliver another good performance during the rest of this year which will be materially ahead of current market expectations.


James Knight

Chief Executive Officer

15 September 2021



(1)         Adjusted PBT is calculated utilising profit before tax and adding back amortisation and share based payments for all periods.
(2)         The terms Principal and Pod were defined on page 7 of the annual report and accounts for year ended 31 January 2021

For the period ended 31 July 2021

 Note 6 Months to
July 2021
6 Months to
July 2020
Revenue  33,672,472 24,468,027
Cost of sales  (24,751,915) (18,159,798)
Gross profit  8,920,557 6,308,229
Depreciation and amortisation 2 (438,436) (435,879)
Share-based payments  (169,175) (80,831)
Administrative expenses 2 (4,014,381) (3,831,021)
Other operating income  - 11,285
Operating profit  4,298,565 1,971,783
Finance income  3,196 36,051
Finance costs  (47,729) (59,357)
Profit before tax  4,254,032 1,948,477
Corporation tax expense  (864,970) (388,156)
Profit and total comprehensive income for the year attributable to equity holders of the Parent  3,389,062 1,560,321
Basic EPS (p) 1 10.8 5.0


The above results were derived from continuing operations.

As at 31 July 2021

 Note 31 July 2021
31 July 2020
31 January
Non-current assets     
Property, plant and equipment     
– Owned assets  273,337 356,589 323,940
– Right of use assets  1,129,867 1,493,082 1,335,297
Total property, plant and equipment  1,403,204 1,849,671 1,659,237
Intangible assets  5,933,164 6,284,047 6,108,606
Other assets  13,628 13,628 13,628
  7,349,996 8,147,346 7,781,471
Current assets     
Trade and other receivables 3 19,024,724 15,285,987 18,108,298
Cash and cash equivalents  7,243,438 6,878,613 7,371,300
  26,268,162 22,164,600 25,479,598
Total assets  33,618,158 30,311,946 33,261,069
Equity and liabilities     
Share capital  62,548 62,548 62,548
Share premium  9,920,760 9,920,760 9,920,760
Share-based payments reserve  549,337 252,322 380,162
Retained earnings  6,297,120 5,518,455 6,223,096
Equity attributable to equity holders of the Parent  16,829,765 15,754,085 16,586,566
Non-current liabilities     
Lease liabilities  794,298 1,189,875 1,015,924
Deferred tax liabilities  231,732 301,910 266,821
  1,026,030 1,491,785 1,282,745
Current liabilities     
Trade and other payables  14,228,636 12,022,773 14,032,341
Lease liabilities  538,544 538,544 538,544
Corporation tax liability  874,485 422,918 719,445
Provisions  120,698 81,841 101,428
  15,762,363 13,066,076 15,391,758
Total liabilities  16,788,393 14,557,861 16,674,503
Total equity and liabilities  33,618,158 30,311,946 33,261,069


The interim statements were approved and authorised for issue by the Board of Directors on 15 September 2021 and were signed on its behalf by:

A Miller

For the period ended 31 July 2021

 Attributable to equity holders of the Parent
Share-based payment reserve
Retained earnings
At 1 February 2020 (audited) 62,548 9,920,760 171,491 3,958,134 14,112,933
Profit for the period and total comprehensive income 1,560,321 1,560,321
Share-based payments 80,831 80,831
Dividend paid
At 31 July 2020 (unaudited) 62,548 9,920,760 252,322 5,518,455 15,754,085
Profit for the period and total comprehensive income 2,768,720 2,768,720
Share-based payments 127,840 127,840
Dividend paid (2,064,079) (2,064,079)
At 31 January 2021 (audited) 62,548 9,920,760 380,162 6,223,096 16,586,566
Profit for the period and total comprehensive income 3,389,062 3,389,062
Share-based payments 169,175 169,175
Dividend paid (3,315,038) (3,315,038)
At 31 July 2021 (unaudited) 62,548 9,920,750 549,337 6,297,120 16,829,765

For the period ended 31 July 2021

 Note 6 Months to July 2021 (Unaudited)
6 Months to July 2020 (Unaudited)
Cash flows from operating activities   
Profit before tax  4,254,032 1,948,477
Adjustments to cash flows from non-cash items   
Depreciation and amortisation 2438,436 435,879
Share-based payments  169,175 80,831
Finance income  (3,196) (36,051)
Finance costs  47,729 59,357
  4,906,176 2,488,493
Working capital adjustments    
(Increase)/Decrease in trade and other receivables (916,426) 1,275,452
Increase/(Decrease) in trade and other payables 196,295 (477,545)
Increase/(Decrease) in provisions  19,270 19,374
Cash generated from operations  4,205,315 3,305,774
Interest paid  (83) (11,710)
Interest portion of lease liability  (47,646) (47,647)
Corporation taxes paid  (745,019) (542,219)
Cash generated from operating activities 3,412,567 2,704,198
Cash flows from/(used in) investing activities   
Interest received  3,196 36,051
Purchases of property plant and equipment (6,963) (26,597)
Net cash (used in)/generated from investing activities (3,767) 9,454
Cash flows from financing activities    
Repayment of lease liabilities  (221,624) (221,624)
Dividend paid  (3,315,038)
Net cash (used in) financing activities (3,536,662) (221,624)
Net increase/(decrease) in cash and cash equivalents  (127,862) 2,492,028
Cash at 1 February  7,371,300 4,386,586
Cash at 31 July  7,243,438 6,878,613


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