Knights Group Holdings Plc (KGH) AI Stock Analysis

• Market Cap: £165.19M
• Dividend Yield: 1.83%
• Average Volume (3M): 124.74K
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.73
• Revenue Growth: 5.40%
• EPS Growth: 19.01%
• Country: UK
• Employees: 1,335
• Sector: Industrials
• Sector Strength: 86
• Industry: Specialty Business Services
• EPS (TTM): 0.13
• Shares Outstanding: 85,813,470
• 10 Day Avg. Volume: 95,087
• 30 Day Avg. Volume: 124,741
• PEG Ratio: -0.02
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.03
• 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: -11.69% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 77 Outperform
• Price Target: 192.00p ▼(-0.26%Downside)

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

Leverage Concerns

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%.

Organic Growth Challenges

Organic growth remains subdued, continuing a trend from previous years, which impacts overall growth potential.

Knights Group Holdings Plc Business Overview & Revenue Model

Company Description

Knights Group Holdings Plc (KGH) is a leading legal and professional services business operating in the United Kingdom. The company is known for its innovative approach to legal services, combining traditional expertise with modern business practices to deliver a comprehensive suite of legal solutions. Serving a diverse client base across various sectors, Knights Group offers services ranging from corporate and commercial law to real estate, dispute resolution, and private client services.

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. Overall, the company stands on a solid financial footing with potential for future growth, pending improved cost management and free cash flow expansion.

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	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	153.46M	149.96M	142.08M	125.60M	103.20M	74.25M
Gross Profit	60.58M	56.95M	130.47M	48.74M	40.49M	28.68M
EBITDA	35.19M	31.72M	26.80M	14.18M	24.81M	9.81M
Net Income	11.40M	9.85M	7.94M	-2.53M	3.40M	1.82M
Balance Sheet
Total Assets	239.49M	219.10M	212.17M	206.28M	194.30M	159.74M
Cash, Cash Equivalents and Short-Term Investments	4.08M	5.45M	4.04M	4.10M	4.78M	12.74M
Total Debt	98.09M	81.19M	78.18M	79.68M	68.56M	52.49M
Total Liabilities	135.04M	118.84M	119.36M	120.62M	111.61M	83.79M
Stockholders Equity	104.45M	100.26M	92.81M	85.66M	82.69M	75.95M
Cash Flow
Free Cash Flow	12.72M	14.63M	14.41M	7.52M	2.52M	3.88M
Operating Cash Flow	24.16M	22.83M	16.33M	10.11M	7.08M	6.40M
Investing Cash Flow	-22.47M	-14.33M	-7.85M	-10.33M	-6.65M	-18.38M
Financing Cash Flow	-3.96M	-7.09M	-8.67M	1.52M	-10.24M	19.81M

Knights Group Holdings Plc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 192.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:KGH, the sentiment is Positive. The current price of 192.5 is above the 20-day moving average (MA) of 179.88, above the 50-day MA of 163.95, and above the 200-day MA of 131.95, indicating a bullish trend. The MACD of 9.15 indicates Negative momentum. The RSI at 68.95 is Neutral, neither overbought nor oversold. The STOCH value of 87.68 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	£165.19M	14.51	11.37%	1.83%	5.40%	19.01%
KEYS	73 Outperform	£193.48M	22.51	45.84%	4.07%	12.22%	7.48%
CPI	69 Neutral	£391.57M	5.00	49.03%	―	-10.33%	―
RST	68 Neutral	£358.06M	28.61	5.32%	2.91%	-0.65%	―
Sector *	66 Neutral	€4.07B	9.20	18.29%	3.43%	3.84%	-103.41%
BEG	64 Neutral	£174.90M	71.57	3.11%	2.56%	13.88%	512.00%
PPHC	63 Neutral	£197.38M	―	-28.97%	3.32%	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.