Company Announcements

3 November 2022

DSW CAPITAL PLC

("DSW Capital", "DSW" or the "Group")

(AIM: DSW)

Trading Update and Notice of Half Year Results

Strong H1 performance; on track to achieve full year expectations

DSW Capital, a profitable, fast growing, mid-market, challenger professional services licence network and owner of Dow Schofield Watts brand, announces the following trading update ahead of the Group's Half Year Results for the period ended 30 September 2022 ("H1 23" or the "Period"), which are expected to be released on 1 December 2022.

The Group continued to trade strongly in H1 23, with network revenue rising to £9.8m, up 34.2% compared to the same period in the prior year (H1 22: £7.3m). This resulted in total income from licensees¹ in the Period of £1.6m, up 40.0% compared to the same period in the prior year (H1 22: £1.2m), which has more than covered the ongoing cost of being on AIM, resulting in Adjusted Pre-Tax Profit² of £0.9m (H1 22: £0.8m).

Fee Earners increased to 93 by 30 September 2022, up 5.7% since the full year end, as the Group continued to benefit from its heightened profile following IPO and its investment in central resource.

Demand for the DSW Network's services, which are primarily SME focused, remained strong throughout the Period, against a backdrop of reducing deal volumes across the wider market³. As a result, Dow Schofield Watts moved up Experian's rankings to 10^th Most Active Corporate Finance Advisor in the UK in the first half of 2022³, compared to 13^th in the first half of 2021.

Outlook

The Board is pleased with the first half performance and believes current trading, against a backdrop of wider economic uncertainties and the potential effect of this on SME activity, is on track to achieve market expectations for the year ending 31 March 2023. Since the Period end, the Group has welcomed a new Wealth Planning partner and activity levels have been consistent with the Board's expectations.

¹ Total income from licensees represents statutory revenue plus share of results in associates

² Adjusted Pre-Tax Profit excludes IPO costs and share based payment charge

³ Experian Market IQ: H1 2022 Report

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Notes to Editors  

About DSW Capital

DSW Capital, owner of the Dow Schofield Watts brand, is a profitable, fast growing, mid-market, challenger professional services network with a cash generative business model and scalable platform for growth. Originally established in 2002, by three KPMG alumni, DSW is one of the first platform models disrupting the traditional model of accounting professional services firms. At the Period end DSW operated licensing arrangements with 20 licensee businesses with 93 fee earners ("FEs"), across seven offices in England and three in Scotland. These trade primarily under the Dow Schofield Watts brand.

DSW's vision is for the DSW Network to become the most sought-after destination for ambitious, entrepreneurial professionals to start and develop their own businesses. Through a licensing model, DSW gives professionals the autonomy and flexibility to fulfil their potential. Being part of the DSW Network brings support benefits in recruitment, funding and infrastructure. DSW's challenger model attracts experienced, senior professionals, predominantly with a "Big 4" accounting firm background, who want to launch their own businesses and recognise the value of the Dow Schofield Watts brand and the synergies which come from being part of the DSW Network.

DSW aims to scale its agile model through organic growth, geographical expansion, additional service lines and investing in "Break Outs" (existing teams in larger firms). The Directors are targeting high margin, complementary, niche service lines with a strong synergistic fit with the existing DSW Network.