DWF Group Capital Markets Day

DWF Group (LON:DWF) hosted a Capital Markets Day yesterday, focused on two of its growth engines; its Managed Services proposition and its International growth strategy. We believe Managed Services is a clear differentiator of DWF’s proposition that has been largely overlooked since IPO. The acquisition of Mindcrest acts to meaningfully accelerate its Managed Services offer, with yesterday’s presentation highlighting the significant revenue opportunity that exists within this space. In turn, the Group continues to execute its international strategy with deals in both Poland and Spain complete, and new markets of interest identified. 

  • Significant Managed Services opportunity: The Managed Services platform aims to deliver day-to-day, process driven law in an efficient way though harnessing both technology and lower cost delivery models including the Group’s newly acquired offshore capabilities in Pune, India. DWF’s ability to offer its managed services in conjunction with complex law advice is a genuine market differentiator and was central to its success in winning the BT contract, that none of the other 25 companies that tendered were able to match. The long term contracted nature of managed services relationships produces sticky, recurring revenue and helps to cement relationships with large corporate clients, exemplified by BT’s five-year contract. Significant cross selling opportunities exist alongside internal cost synergies. We believe Managed Services has the potential to represent up to half of Group revenue over the long term, as increasing amounts of volume, process- driven work is identified, standardised and automated. A foothold in India also gives the Group insight into the regions quickly evolving legal tech market, a key focus for the Group in driving innovation and disruption in the legal services market.
  • International growth: Since listing DWF has established a presence in Poland and more recently Spain, through the acquisition of RCD; both markets identified as targets at IPO. The Group’s tried and tested model for international expansion is client led, with new target markets identified for the next phase of its global growth, including Portugal and Canada. Its association model allows it to establish close working relationships with international partners, best exemplified in its US association with WSHB, a highly innovative legal business which we believe would be a highly complementary acquisition for the Group in the future.
  • Valuation: Trading on FY20 P/E of 12.5x falling to 8.7x in FY21, with a prospective yield of 5.6% DWF offers multiple drivers of growth through international diversification and market disruption. In addition DWF Group has significant latent capacity which we believe it can translate into meaningful fee income growth which should drive medium term margin expansion.
Click to view all articles for the EPIC: ,
Or click to view the full company profile:
    Facebook
    Twitter
    LinkedIn
    Zeus Capital

    More articles like this

    Fintel plc

    Fintel core revenue growth is higher than Zeus forecast

    Fintel plc (LON:FNTL), the leading provider of Fintech and support services to the UK retail financial services sector, has released a trading update for the six months to 30 June 2022, which reveals: Core revenue grew

    OnTheMarket Plc

    OnTheMarket analyst Zeus confident in forecasts

    Foxtons, one of London’s leading estate agencies with more than 50 interconnected branches across London, has signed an agreement to advertise its UK residential sales and letting properties at OnTheMarket plc (LON:OTMP). Zeus view: Foxtons, the

    SpaceandPeople analyst Zeus restores estimates and valuation

    SpaceandPeople plc (LON:SAL) secures, sells, and manages flexible space for brand experiences, short term promotions and retailing in high footfall venues for its customers, including in shopping centres and travel hubs. The Group has issued a

    Lookers Plc

    Lookers shares are still undervalued says Zeus

    Lookers plc (LON:LOOK) has released an H1 trading update reporting a continuation of strong performance year to date. H1 2022 underlying PBT is expected to be c. £45m and Management anticipate full year PBT will also

    Inchcape

    Inchcape performance exceeding expectations says Zeus

    Inchcape plc (LON:INCH) has released another positive trading update, with performance exceeding expectations so far this year. This follows on from a positive Q1 update on 28 April. Through quarterly improvement in Distribution volumes and operating

    boohoo Plc

    Boohoo Group analyst Zeus sees a strong performance in Q1

    ¨ Q1 financial highlights: Boohoo Group plc (LON:BOO) revenue of £445.7m is -8.3% YOY vs. a strong comp (Q1 FY22 revenue +32.1%), in line with Zeus’s forecast and management’s previously stated guidance. Gross sales growth remained