Knights Group Holdings Plc (KGH) AI Stock Analysis

• Market Cap: £127.43M
• Dividend Yield: 2.84%
• Average Volume (3M): 195.52K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.84
• Revenue Growth: 5.40%
• EPS Growth: 19.01%
• Country: UK
• Employees: 1,335
• Sector: Industrials
• Sector Strength: 92
• Industry: Specialty Business Services
• EPS (TTM): 0.13
• Shares Outstanding: 85,813,470
• 10 Day Avg. Volume: 164,084
• 30 Day Avg. Volume: 195,519
• PEG Ratio: N/A
• Price to Book (P/B): 1.24
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.03
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £170.00
• Price Target Upside: 14.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 77 Outperform
• Price Target: 192.00p ▲( 29.29% Upside)

Knights Group Holdings Plc is well-positioned for continued success, underpinned by strong financial performance, strategic acquisitions, and attractive valuation. The stock benefits from solid revenue growth, improving profitability, and strategic expansions in key markets. However, investors should be mindful of potential volatility indicated by technical indicators. Overall, the company presents a compelling investment opportunity with a balanced risk-reward profile.

Positive Factors

Acquisitions

Acquisitions of Thursfields and IBB Law are integrating well and performing as expected.

Financial Performance

Knights delivered good profit growth driven by a 3% increase in gross margin to 50.5%, due to growth in higher margin areas.

Recruitment

The group hired 52 senior fee earners, reflecting strong momentum in recruitment.

Negative Factors

Investment Case

The interim results do not significantly alter the investment case debate, as organic growth challenges and leverage concerns persist.

Leverage

Leverage at 1.4x is elevated compared to professional services peers, posing a challenge for a re-rating.

Organic Growth

Organic growth remains challenging for Knights Group, as indicated by past performance metrics ranging from -0.1% to 1.9%.

Knights Group Holdings Plc Business Overview & Revenue Model

Company Description

Knights Group Holdings plc provides legal and professional services in the United Kingdom. The company offers business services, in the areas of banking, commercial, corporate, data protection, debt recovery, dispute resolution, and housing and regeneration. It also offers services in the areas of immigration, licensing and gambling, and employment. In addition, the company provides personal services, including agriculture, charities, conveyancing, family, landed estates, planning, professional discipline, tax and trusts, and wills and estates. Further, it offers real estate; restructuring and insolvency; regulatory; and tax services. The company serves aviation, consumer and retail, energy, waste and natural resources, financial and professional services, healthcare, industrials, transport and support services, property management and development, agricultural and the food supply chain, technology, and media and telecommunications sectors. Knights Group Holdings plc was founded in 1759 and is based in Newcastle-under-Lyme, the United Kingdom.

How the Company Makes Money

Knights Group Holdings Plc generates revenue primarily through providing legal services to its clients. The company's revenue model is based on charging fees for the legal expertise and services it offers, which can be billed hourly, through fixed fees, or on a retainer basis, depending on the nature and complexity of the service and client agreement. Knights Group enhances its revenue streams by expanding its client base through strategic acquisitions of other law firms, thereby increasing its market presence and service offerings. Additionally, the firm's integrated approach to combining legal expertise with business acumen allows it to attract partnerships and long-term contracts with a variety of corporate clients, further contributing to its financial performance.

Knights Group Holdings Plc Financial Statement Overview

Summary

Knights Group Holdings Plc exhibits a promising financial trajectory with consistent revenue growth and improving profitability. The balance sheet is stable with a reasonable debt level and healthy return on equity. While cash flow generation is strong, further improvements in free cash flow growth could enhance financial flexibility.

Income Statement

Knights Group Holdings Plc has demonstrated solid revenue growth with a consistent increase over the past years, highlighted by a recent 5.5% increase from 2023 to 2024. The gross profit margin is stable at around 38.0%, and the net profit margin improved to 6.6% in 2024 from 5.6% in 2023. However, the gross profit dropped substantially from 2023 due to high operating costs. Overall, profitability metrics are improving, but the company needs better control over costs to enhance margins further.

Balance Sheet

The balance sheet shows a moderate level of leverage, with a debt-to-equity ratio of approximately 0.81 in 2024, indicating a manageable level of debt. The return on equity (ROE) has improved to 9.8% in 2024, showing efficient use of equity. However, the equity ratio stands at 45.8%, suggesting a balanced but slightly risk-averse capital structure. Increased equity and asset growth over the years have stabilized the financial position.

Cash Flow

The cash flow statements reveal a healthy operating cash flow increase to 22.8 million in 2024, supporting a steady free cash flow. The free cash flow growth rate is marginal, reflecting consistent capital expenditure. The operating cash flow to net income ratio is strong at 2.32 in 2024, indicating good cash generation relative to reported profits. However, more robust free cash flow growth is needed for long-term sustainability.

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
149.96M	142.08M	125.60M	103.20M	74.25M
	Gross Profit
56.95M	130.47M	48.74M	40.49M	28.68M
	EBIT
19.96M	16.06M	15.98M	17.11M	12.77M
	EBITDA
31.72M	26.80M	14.18M	24.81M	9.81M
	Net Income Common Stockholders
9.85M	7.94M	-2.53M	3.40M	1.82M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.45M	4.04M	4.10M	4.78M	12.74M
	Total Assets
219.10M	212.17M	206.28M	194.30M	159.74M
	Total Debt
81.19M	78.18M	79.68M	68.56M	52.49M
	Net Debt
75.73M	74.14M	75.58M	63.77M	39.75M
	Total Liabilities
118.84M	119.36M	120.62M	111.61M	83.79M
	Stockholders Equity
100.26M	92.81M	85.66M	82.69M	75.95M
Cash Flow		Free Cash Flow
14.63M	14.41M	7.52M	2.52M	3.88M
	Operating Cash Flow
22.83M	16.33M	10.11M	7.08M	6.40M
	Investing Cash Flow
-14.33M	-7.85M	-10.33M	-6.65M	-18.38M
	Financing Cash Flow
-7.09M	-8.67M	1.52M	-10.24M	19.81M

Knights Group Holdings Plc Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 148.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:KGH, the sentiment is Neutral. The current price of 148.5 is below the 20-day moving average (MA) of 154.00, above the 50-day MA of 141.03, and above the 200-day MA of 125.26, indicating a neutral trend. The MACD of 6.79 indicates Positive momentum. The RSI at 47.58 is Neutral, neither overbought nor oversold. The STOCH value of 32.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:KGH.

Knights Group Holdings Plc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KGH	77 Outperform	£127.43M	11.19	11.37%	2.84%	5.40%	19.01%
KEYS	73 Outperform	£192.72M	22.51	45.84%	3.06%	12.22%	7.48%
RST	68 Neutral	£360.11M	28.77	5.32%	2.02%	-0.65%	―
Sector *	64 Neutral	$4.39B	11.81	5.20%	249.38%	3.96%	-12.36%
BEG	64 Neutral	£156.54M	64.05	3.11%	4.25%	13.88%	512.00%
CPI	62 Neutral	£202.28M	3.18	49.03%	―	-10.33%	―
PPHC	50 Neutral	£166.30M	―	-28.97%	5.19%	7.76%	-60.70%

Knights Group Holdings Plc Corporate Events

Knights Group Holdings Reports Strong Growth and Strategic Acquisitions

Knights Group Holdings Plc reported a strong financial performance for the year ending April 2025, with an 8% increase in revenue to approximately £162 million and an 11% rise in underlying profits to around £28 million. The company has shown significant recruitment momentum, adding 52 senior fee earners, and has continued its acquisition strategy by integrating Thursfields and completing its largest acquisition to date, IBB Law, which strengthens its presence in the South East. These strategic moves, along with a new acquisition post-period end, have bolstered Knights’ position as a leading national legal services firm with a strong regional focus, enhancing its service offerings and market reach.

The most recent analyst rating on (GB:KGH) stock is a Buy with a £170.00 price target. To see the full list of analyst forecasts on Knights Group Holdings Plc stock, see the GB:KGH Stock Forecast page.

Knights Group Expands with Acquisition of Birkett Long

Knights Group Holdings Plc has announced the acquisition of Birkett Long LLP and Birkett Long IFA LLP, a regional law firm and independent financial advisory business based in Essex. This strategic move aligns with Knights’ growth strategy, expanding its presence in the South East and entering the wealth advisory sector. The acquisition is expected to be immediately earnings enhancing and will increase Knights’ annual revenue to over £200 million. The integration of Birkett Long is anticipated to be smooth due to cultural and operational synergies, offering Knights an opportunity to provide a broader range of services to clients and further organic growth in the region.

Knights Group Holdings: Change in Major Shareholding

Knights Group Holdings Plc has announced a change in its major holdings, with Octopus Investments Limited increasing its voting rights from 14.41% to 15.18%. This adjustment in voting rights signifies a strengthened position for Octopus Investments in the company, potentially impacting future strategic decisions and stakeholder interests.

Knights Group Holdings Plc Sees Change in Major Shareholder Voting Rights

Knights Group Holdings Plc has announced a change in its major holdings as Octopus Investments Limited has increased its voting rights in the company to 14.41% from a previous 13.98%. This acquisition of voting rights signifies a strengthened position for Octopus Investments within Knights Group Holdings, potentially impacting the company’s strategic decisions and stakeholder interests.

Knights Group Holdings Completes Acquisition of IBB Law LLP

Knights Group Holdings PLC has completed the acquisition of IBB Law LLP, a full-service regional law firm with offices in Ascot, Beaconsfield, Reading, and Uxbridge. This acquisition aligns with Knights’ strategy to enhance its organic growth through selective acquisitions, adding 140 professionals and a national client base. The integration of IBB Law LLP will expand Knights’ expertise in franchising, education, and residential development, strengthening its presence in the South East and providing new clients access to Knights’ broader range of services.

Knights Group Holdings PLC Announces Change in Major Holdings

Knights Group Holdings PLC, a UK-based company, announced a change in its major holdings as Octopus Investments Limited adjusted its voting rights. The notification indicates that Octopus Investments now holds 13.98% of the voting rights in Knights Group Holdings, a slight decrease from its previous position of 14.16%. This adjustment in holdings could impact the company’s governance and decision-making processes, reflecting a shift in stakeholder influence.

Knights Group Holdings Reinforces Employee Investment with SIP Share Purchase

Knights Group Holdings Plc announced that its SIP trustee has reinvested dividends by purchasing 7,971 ordinary shares at £1.38 per share on behalf of participating employees. This move, following a recent dividend payment, reflects the company’s ongoing commitment to employee investment and aligns with its strategic initiatives to enhance stakeholder value.

Knights Group Holdings Sees Increase in Major Holdings by Octopus Investments

Knights Group Holdings Plc has announced a change in its major holdings, with Octopus Investments Limited increasing its voting rights from 13.99% to 14.16%. This acquisition of voting rights signifies a strengthened position for Octopus Investments within Knights Group Holdings, potentially influencing future strategic decisions and impacting stakeholders by consolidating control and influence over company operations.

Octopus Investments Increases Stake in Knights Group Holdings

Knights Group Holdings Plc has announced that Octopus Investments Limited has increased its voting rights in the company to 13.99% as of March 7, 2025. This acquisition of voting rights signifies a strengthened influence of Octopus Investments in Knights Group Holdings, potentially impacting the company’s strategic decisions and stakeholder interests.

Knights Group Expands South East Presence with IBB Law Acquisition

Knights Group Holdings Plc has announced the acquisition of IBB Law LLP, a law firm based in the South East, to enhance its presence in this lucrative market. The acquisition, valued at £30m, is expected to be immediately earnings enhancing and aligns with Knights’ strategy of growth through selective acquisitions. IBB’s strengths in corporate, real estate, and private wealth complement Knights’ existing services, and the integration is anticipated to provide a strong platform for further organic growth in the region.