The market has reacted well to a half-year update from professional services business DSW Capital (AIM: DSW), with trading said to be in line with management expectations for the period.
About DSW Capital
DSW Capital is the owner of the Dow Schofield Watts and DR Solicitors brands, and calls itself a “profitable, mid-market, challenger professional services network with a cash generative business model and scalable platform for growth”. Founded in 2002, by three KPMG alumni, Dow Schofield Watts aims to disrupt the traditional model of accounting professional services firms.
Listing on AIM in December 2021, the firm operates licensing arrangements with its businesses and has, as at 5th October 2026, over 130 fee earners across 14 offices in the UK. These businesses trade primarily under the Dow Schofield Watts and DR Solicitors brands. Growth has been notable over the past two financial years, with revenues up from £2.3 million to £6.2 million between FY2024 and FY2026, with adjusted pre-tax profits up from £0.5 million to £1.3 million over the same period.
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Trading update
Total income for the six months to 30th September 2026 increased by 21% to £3.4 million, driven by strong M&A activity and 20% organic growth in the DR Solicitors business. That helped adjusted EBITDA increase by £0.1 million to £0.8 million. Network Revenue (total income earned by licensees and DR Solicitors), increased by 24% to c.£12.8 million, driven by organic growth in DR Solicitors and strong M&A activity during the first half of the year. The number of fee earners remained flat on 31st March 2026 at 135, with revenue per fee earner increasing to £181,000 from £162,000.
Operating cash conversion was strong at 107%, with cash balances of £2.4 million at the period end, up from £2 million at the end of March. The net cash position at the half year end improved to £0.5 million from £0.4 million 12 months earlier.
In terms of expansion, the acquisition of consultancy Integer Advisory Limited was made by an existing licensee during the period, financially supported by DSW Capital, to strengthen the group’s public sector advisory capabilities. A new Transaction Services team launched in Southampton, expanding the geographic reach, and following the period end DSW Legal expanded into employment law by onboarding an established business as a licensee.
DSW added that the business is currently trading well, but management are mindful of the well documented geopolitical and economic uncertainties. The interims will be released on 23rd November.
DSW Capital share price since AIM IPO
Comment
Shares in DSW have risen by 4.4% to 47.5p on the news, capitalising the company at £11.9 million. Investors seem to be regaining some confidence after a March trading update from the group revealed that the outbreak of war with Iran had severely impacted M&A activity in the UK, with many deals expected to complete in March being aborted or postponed. This update inspires some confidence that activity levels have increased, with a notable metric being the revenue per earner rising by 12%. While EBITDA didn’t grow at the same rate as revenue, we note the further investment in expanding the business both geographically and by service area. Investors will be looking out for news of the dividend in the upcoming results, with the shares currently yielding 6.7% on last year’s total payment of 3.2p per share.
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Disclosures
Wickes Group is not a corporate client of Optimo Research Ltd.
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