Dsw Capital Plc · LSE:DSW
Dsw Capital — H1 FY23 Earnings Presentation
24 slides from Dsw Capital's earnings presentation, December 2022
Slide 1: DSW Capital plc Half Year Results FY23
DSW Capital plc Half Year Results FY23 December 2022
Slide 2: Disclaimer
Disclaimer The following presentation, including a hard copy of these slides/the talks given by the presenters, the information communicated during any delivery of the presentation and any question and answer session and any document or material distributed at or in connection with the presentation
Slide 3: Today's Presenters
Today’s Presenters Executive Directors James Dow Nicole Burstow Chief Executive Officer Chief Financial Officer James established Dow Schofield Watts LLP in Nicole joined Dow Schofield Watts LLP as Group 2002. Finance Director in April 2019. James is qualified as both a Chartered Nicole previously s
Slide 4: Overview of DSW
Overview of DSW • Challenger “Big 4” mid market professional services network. Joined AIM Dec 21 • 97 licenced fee earners (“FE”) predominantly trading under the DSW brand with 10 locations across England and Scotland. • Licence fee is charged typically on a percentage of revenue. • Provide the infr
Slide 5: Investment Case
Investment Case Scalable and innovative Cash generative, capital light platform model Large market ripe for disruption Recurring revenue base Continued strong growth The AIM listing has: o increased our profile to partner candidates; o provided capital for the acquisition of licence fee income from
Slide 6: Current Service Lines
Current Service Lines Corporate Business Business Financial Due Equity Finance Finance Recovery Planning Diligence FE=4 Advisory FE=10 FE=7 FE=19 FE=37 Forensic Angels Network Debt Advisory Tax Services Asset Based Wealth Services FE=4 FE=5 FE=3 Lending Risk Planning FE=5 Management FE = 1 FE = 2 Do
Slide 7: The DSW Licence Model
The DSW Licence Model Empowering ambitious professionals to build their own business We recruit highly skilled professionals (typically “Big 4”) in focussed niches of expertise to run their own business and provide services to small to mid market corporates and their owner managers. Licence fee of 2
Slide 8: The DSW Licence Model
The DSW Licence Model Strengths to DSW Capital Strengths to the Licensee Recurring income. Strong perceptions of credentials and capability. Minimal exposure to property and employee Cross referrals and access to multidisciplinary costs. services. Easier recruitment, central marketing and PR License
Slide 9: H1 FY23 Performance Highlights
H1 FY23 Performance Highlights • H1 FY23 performance on track Network Revenue (£m) 18.3 • Network Revenue increased 34.5% to £9.8m (H1 FY22: 15.3 £7.3m) 12.4 11.0 9.8 • We expect a 40:60 split between H1 & H2 5.4 10.4 - • Income from licensees* increased 40.4% to £1.6m 9.8 7.0 7.3 • Underlying EBITD
Slide 10: H1 FY23 Income Statement
H1 FY23 Income Statement £000s Sept-22 Sept-21 Key Highlights Portfolio Income 9,786 7,276 • Demand for DSW services remains strong. Licence Income 1,491 1,094 • SME M&A marketplace resilience. Profit Share Income* 102 69 • Profit share income increased 48% reflecting improved Sale of interest in LL
Slide 11: H1 FY23 Balance Sheet
H1 FY23 Balance Sheet £000s Sept-22 Mar-22 £000s Sept-22 Mar-22 Non-current assets Net current assets 5,606 5,626 Intangible assets 770 794 Non-current liabilities Property, plant and equipment 470 525 Lease liability 259 302 Investments 922 922 Dilapidation provision 73 72 Investments in associates
Slide 12: Cash Flow Statement
Cash Flow Statement £000s Sept-22 Sept-21 £000s Sept-22 Mar-22 Cash flows from operating activities Operating cash 85% 105% Profit for the half-year 418 516 conversion* (%) *Calculated as cash generated by operations divided by Operating Adjustments for tax, interest, non cash items 547 279 cash flo
Slide 13: Network KPIs
Network KPIs Fee Earners LTM Portfolio Revenue vs. Fee Earners (H1) 93 25 120 14.8% YOY growth 100 20 Number of Fee Earners LTM Portfolio Revenue 80 15 Network Revenue (H1) £9.8M 60 10 40 34.5% YOY growth 5 20 - 0 16.7% 1:1.3 H1 FY21 H2 FY21 H1 FY22 H2 FY22 H1 FY23 Partner to Employee Average Licenc
Slide 14: Profile Boost Post IPO
Profile Boost Post IPO PROFESSIONAL SERVICES FIRM DSW HEADS CHALLENGER HALFORDS STRIKES DEAL FOR NEW AIM ACCOUNTING MOTORING SERVICES GROUP ADMISSION: DSW FOR £21M FLOAT VALUE – The Times, December FIRM TO LIST – Insider National, December 2021 CAPITAL LICENSING 2021 ON LONDON SUCCESS – UK Investor
Slide 15: Our ESG journey
Our ESG journey Aligned DSW behaviours framework with revised Purpose & Values Highly-active social and wellbeing calendar Identifying and rolling out initiatives Collating Scope 1, 2 & 3 emissions data Launch of Future Leaders programme with BecomingX Dow Schofield Watts 15
Slide 16: Opportunities for growth
Opportunities for growth Acquisition of “Break-outs” licence fees Organic Service line growth extension Geographical expansion Dow Schofield Watts 16
Slide 17: The accountancy profession is ready for something new
The accountancy profession is ready for something new….. The “Big 4” are under significant pressure to restructure DSW Differentiators: Partners also continue to benefit from: International Being part of network - A direct link 100% Central Pandea Greater a multi- between fees operational infrastruc
Slide 18: Target Acquisition Service Lines
Target Acquisition Service Lines High margin, high growth, niche professional services where there is a strong synergistic fit. Existing service lines in new locations. Tax related services and family office. Employer solution services. Niche legal services. Other Big 4 (non-audit) service lines. Do
Slide 19: Summary and Outlook
Summary and Outlook Summary • Strong growth in Network Revenue (34.5%) in H1 FY23. • High activity levels. • 15 new FEs post-IPO – heightened profile and licence model driving recruitment. • Named by Experian as the 10th most active corporate finance adviser in the UK in the first half of 2022, comp
Slide 20: Questions
Questions DSW Capital
Slide 21: Appendices
Appendices DSW Capital
Slide 22: Summary Investment Thesis
Summary Investment Thesis Why invest? Robust, recurring income stream. Predictable cost base with low operational gearing. Capital light. Scalable platform model. Significant opportunity for organic and acquisition driven growth. Cash backed profits which can support a 70% dividend pay-out ratio bas
Slide 23: Timeline of the Business
Timeline of the Business December 2012 – Dec 2020 – May 2022 – launched VAT Services Launch of Tax Aug 2021 – DSW Scotland DSW CF Advisory Advisory North Launch of Debt welcomes two based in North West Nov 2018 – Launch of was founded as a West Advisory London new Partners boutique DSW Ventures (Ang
Slide 24: Contact Us
Contact Us Daresbury London Leeds Manchester Stockport 7400 Daresbury Park 60 St Martin’s Lane 4100 Park Approach XYZ Building The Mailbox, Daresbury Covent Garden Thorpe Park 2 Hardman Blvd Exchange Street Warrington London Leeds Manchester Stockport WA4 4BS WC2N 4JS LS15 8GB M3 3AQ SK3 0GA Reading