Interim report
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RNS Number : 5040UKeystone Law Group PLC14 September 2026 14 September 2026 Keystone Law Group Plc ('Keystone', the 'Group' or the 'Company') Interim Results for the Six Months Ended 31 July 2026 - Expect FY 2027 revenue to be comfortably ahead and profits to be materially ahead of current market expectations (1) - Continued rollout and adoption of AI tools enhances Keystone's technology platform - Interim ordinary dividend of 9.6p and special dividend of 15p reflecting ongoing balance sheet strength and confidence Keystone, the premier tech-enabled platform law firm, is pleased to announce its interim results for the six months ended 31 July 2026 ('H12027' or the 'Period'). Financial Highlights: · Revenue growth of 22.5% to £66.3 million (H1 2026: £54.2 million) · Revenue per Principal up 14.5% to £133.8k (H1 2026: £116.8k) · Adjusted PBT up 31.3% to £9.6 million (H1 2026: £7.3 million) representing an adjusted PBT margin of 14.5% (H1 2026: 13.6%) · Adjusted basic EPS of 23.1p (H1 2026: 17.8p) · Cash generated from operations up 19.2% to £8.1 million (H1 2026: £6.8 million) with operating cash conversion of 95.6% (H1 2026: 104.2%) · Strong balance sheet with net cash of £10.5 million (H1 2026: £6.5 million) · Declared interim ordinary dividend of 9.6p per share and special dividend of 15p (H1 2026: interim ordinary dividend 7.5p) Operational Highlights: · Ongoing operational strength underpins high-quality sustainable growth · Maintained solid recruitment activities despite ongoing geo-political uncertainty o 148 new applicants in the Period (H1 2026: 164) o 23 high-calibre new Principals added bringing total Principals to 501 (31 January 2026: 491), reinforcing Keystone's brand and market position · Principals continue to grow their Pods with net growth of 18 other fee earners in the Period bringing total fee earners to 682 (31 January 2026: 654) · Extended AI capabilities with rollout of CoCounsel Legal, a professional-grade generative AI tool specifically designed for the legal industry, complementing additional AI tools deployed in FY2026 · Completed brand refresh, launching new website alongside the production of extensive marketing collateral · Central office team continues to provide service delivery excellence Current Trading and Outlook: · The Group has made a positive start to H2 2027 · The Board now expects that Keystone will deliver FY 2027 revenue comfortably ahead and profits materially ahead of current market expectations(1), (1) Management understand market expectations prior to this announcement for FY2027 to be: revenue £123m, adjusted PBIT £13.8 and adjusted PBT £15.8m. James Knight, Chief Executive Officer of Keystone, commented:
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"I am extremely pleased with Keystone's performance in the Period. Strong demand across the business,continued recruitment of high-calibre lawyers and disciplined investment in our platform have delivered excellentfinancial performance and further strengthened our market-leading position. We continue to invest in our technology, brand and community, including the rollout of further market-leading AI tools, to ensure our lawyers have the infrastructure and support they need to grow and sustain successful practices. With a strong first half and an encouraging start to H2, we remain confident in Keystone's ability to deliver sustainable long-term growth." Analyst Briefing A virtual meeting for sell-side analysts will be held virtually at 9.30 a.m. on Monday, 14 September 2026. Sell-sideanalysts wishing to attend this event can register via email at: keystonelaw@vigoconsulting.com Retail Investor Presentation Keystone's management team will provide a separate presentation and Q&A for retail investors at 1.00 p.m. onTuesday, 15 September 2026. The presentation will be hosted on the Investor Meet Company platform, where questions can be submitted pre-event up until 9.00 a.m. on the day before the meeting, or at any time during the live presentation. Investors can register for free and subscribe to alerts on Keystone by visiting: www.investormeetcompany.com/keystone-law-group-plc/register-investor Investors who already follow Keystone on the Investor Meet Company platform will automatically be invited. For further information please contact: Keystone Law Group plc James Knight, Chief Executive Officer Ashley Miller, Finance Director www.keystonelaw.com +44 (0) 20 3319 3700 Panmure Liberum Limited (Nominated Adviser and Joint Broker) Atholl Tweedie (Corporate Finance) Rupert Dearden (Corporate Broking) www.panmureliberum.com +44 (0) 20 7886 2500 Investec Bank plc (Joint Broker) Carlton Nelson James Rudd www.investec.co.uk +44 (0) 20 7597 5970 Vigo Consulting (Financial Public Relations) Jeremy Garcia Fiona Hetherington keystonelaw@vigoconsulting.com +44 (0)207 390 0233 The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Notes to editors Keystone (AIM: KEYS) the premier tech-enabled platform law firm. It is a highly scalable business with an organicgrowth strategy which has a proven record of delivering sustainable growth since its IPO in 2017. Ranked within
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the UK Top 100 law firms, Keystone provides conventional legal services in a £14bn addressable market throughits differentiated platform model which has three defining characteristics: · Lawyers have freedom, flexibility and autonomy, and are paid up to 75% of what they bill. · Lawyers determine how, when and where they work, in contrast to the conventional law firm model. · Lawyers are provided full infrastructure and support via its central office team, bespoke user-friendly IT platform, and network of colleagues and events. Keystone is a full-service law firm, with extensive experience across a wide range of sectors and specialisms. With over 500 high calibre self-employed Principal lawyers, supported by over 180 other fee earners, Keystonedelivers dynamic services to its client base which ranges from fast growing start-ups to multinational corporationsand high net worth individuals. More information about Keystone can be found at www.keystonelaw.co.uk. CHIEF EXECUTIVE OFFICER'S STATEMENT I am delighted to report that the business has continued to trade strongly across the Period, delivering revenue growth of 22.5% and adjusted PBIT(1) growth of 31.6% year on year. We saw strong demand across the business,with activity in corporate and corporate restructuring over-indexing, which has driven revenue per Principal up to£133.8k, an increase of 14.5% on H1 2026. The strength of revenue growth has resulted in an increased adjustedPBIT margin of 12.3% (H1 2026: 11.4%), whilst the effect of interest rates being held has been that we have benefitted from net finance income of £1.5m, producing adjusted PBT(1) of £9.6m at a margin of 14.5% (H1 2026:£6.2m, 13.6%). The highly cash generative nature of our business model continues to underpin the high qualityof earnings, with cash generated from operations increasing 19.2% to £8.1m. The global geo-political uncertainty which has been persistent during the Period has resulted in a softerrecruitment market, with candidate movement across the market reduced from the levels experienced duringFY2026. Against this backdrop we delivered a robust performance in attracting talent, adding 23 high calibre newPrincipals during the Period taking the total number of Principals to 501 (31 January 2026: 491). Furthermore,the strong demand within the business has underpinned the confidence of our lawyers to continue to recruitstrongly into their Pods, with 23 new Pod members joining taking the total number of fee earners to 682 (31January 2026: 654). As reported in our FY 2026 annual report and accounts, our ongoing implementation and adoption of AI tools andsolutions is a natural extension of our established IT strategy, and we continue to embrace the opportunitieswhich this presents for our business. Applying innovative technology solutions which genuinely enhance the userexperience of both our lawyers and clients is a part of the Keystone DNA. Having successfully deployed a secureenterprise grade version of ChatGPT and Claude as well as the Netdocuments generative AI tool during FY 2026,we have continued to extend the suite of AI tools available to our lawyers, successfully rolling out CoCounselLegal ("CoCounsel") during the Period. As a leading generative AI tool specifically designed to work for the legalindustry, CoCounsel's major differentiating factor is its ability to access not only open-source data but, moreimportantly, it accesses the extensive, market leading, legal knowledge databases owned by Thomson Reuters.This roll out builds on the successes of last year and we have seen an increasing level of uptake and utilisation ofthese AI solutions. We firmly believe that it is only through the active promotion and ongoing training that the business will reap thefull benefits of these tailored applications. Accordingly, we continue to invest in supporting both new and existingusers to help them leverage the advantages these new solutions provide. H1 2027 saw the culmination of our brand refresh project with the successful launch of our new websitealongside the production of the extensive marketing collateral. This has significantly enhanced the visualperception of our brand, aligning it more accurately with the position which Keystone now occupies in the legalmarketplace and amongst our peers. Outside of these projects, the central office team has continued to drive the business forwards, deliveringexceptional support to all aspects of our lawyers' working lives. We continue to invest in all elements of thebusiness to ensure that we remain the standout choice of those high calibre lawyers we wish to attract andretain. As the market leading Premier platform law firm, "business as usual" for Keystone's central office team is
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a process of constant investment and improvement across all aspects of the business, underpinning the deliveryof sustainable ongoing long-term success. I would like to take this opportunity to thank my colleagues, both the lawyers and across the central office team,for their passion and dedication, which continues to drive the business forwards and has made these resultspossible. Dividend and Capital Allocation I am pleased to announce that the Board has declared an interim ordinary dividend of 9.6p per share as well as aspecial dividend of 15p per share. These dividends will be payable on 16 October 2026 to shareholders on theregister on 25 September 2026, and the shares will go ex-dividend on 24 September 2026. In May, we carried out a £1.5m on-market share buy-back programme. The objective of this programme was tobuy sufficient shares to meet the Group's commitment under the Long Term Incentive Plan this year, thusavoiding any dilution that would otherwise arise through the issue of new shares. Having met these obligations,the small surplus of shares acquired (43,993 shares) were cancelled. Summary and outlook We are delighted with these strong results, underpinned by very strong financials, high quality, sustainablegrowth which continues to drive the business forwards and reinforces our market leading position. We remain positive about our ongoing success, despite the global geo-political uncertainty which continues topersist. In light of the successful performance of H1 2027, together with the encouraging start we have had to H2 2027,the Board now expects that Keystone will deliver revenue comfortably ahead and adjusted profits materially ahead of current market expectations(2) for FY 2027. James Knight Chief Executive Officer 11 September 2026 (1) Adjusted PBIT and adjusted PBT are calculated using profit before tax and adding back amortisation in the prior period and share-based payments for all periods. (2) Management understands current market expectations for FY 2027 to be revenue of £123m and adjusted PBIT and adjusted PBT of £13.8m and £15.8m respectively. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the period ended 31 July 2026 Note 6 months to July2026(Unaudited)£ 6 months to July2025(Unaudited)£ Revenue 66,348,606 54,151,537 Cost of sales (49,435,074) (40,358,020) Gross profit 16,913,532 13,793,517 Trade receivables impairment (1,108,171) (265,266) Corresponding reduction in trade payables 809,814 180,059 (298,357) (85,207) Administrative expenses 2 (8,265,070) (7,211,696) Depreciation 2 (346,214) (346,456)Share-based payments 2 (392,136) (408,852)Other operating income 145,562 43,461 Operating profit 7,757,317 5,784,767 Finance income 1,766,223 1,578,727 Finance costs (280,213) (431,834) Profit before tax 9,243,327 6,931,660 Corporation tax expense (2,326,443) (1,724,898)Profit and total comprehensive income for the period attributableto equity holders of the Parent 6,916,884 5,206,762 Basic EPS (p) 1 21.8 16.5Diluted EPS (p) 1 21.4 16.2 The above results were derived from continuing operations. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
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As at 31 July 2026 Note 31 July 2026(Unaudited)£ 31 July 2025(Unaudited)£ 31 January 2026(Audited)£ Assets Non-current assets Property, plant and equipment - Owned assets 553,645 690,053 629,880 - Right-of-use assets 1,278,058 1,741,680 1,509,869 Total property, plant and equipment 1,831,703 2,431,733 2,139,749 Intangible assets 4,807,411 4,807,411 4,807,411 Investments 313,738 129,350 313,738 6,952,852 7,368,494 7,260,898 Current assets Trade and other receivables 3 37,905,294 30,043,484 32,787,578 Corporation tax - - 37,179 Cash and cash equivalents 10,462,544 6,505,516 9,744,084 48,367,838 36,549,000 42,568,841 Total assets 55,320,690 43,917,494 49,829,739 Equity and liabilities Equity Share capital 63,346 63,435 63,435 Share premium 9,920,760 9,920,760 9,920,760 Share-based payments reserve 607,086 968,590 1,411,055 Retained earnings 10,485,676 5,827,556 9,301,975Equity attributable to equity holders of theParent 21,076,868 16,780,340 20,697,225 Non-current liabilities Lease liabilities 819,194 1,320,595 1,072,496 Provisions 1,227,354 1,198,130 1,340,830 2,046,548 2,518,725 2,413,326 Current liabilities Trade and other payables 30,983,653 23,942,119 26,124,340 Lease liabilities 594,848 594,848 594,848 Corporation tax liability 618,773 81,462 - 32,197,274 24,618,429 26,719,188 Total liabilities 34,243,821 27,137,154 29,132,514 Total equity and liabilities 55,320,690 43,917,494 49,829,739 The interim statements were approved and authorised for issue by the Board of Directors on 11 September 2026and were signed on its behalf by: A Miller Director CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the period ended 31 July 2026 Attributable to equity holders of the Parent Share capital£ Share premium£ Share-basedpaymentreserve£ Retainedearnings£ Total£At 31 January 2025 (audited) 63,186 9,920,760 1,276,080 9,102,454 20,362,480Profit for the period and totalcomprehensive income - - - 5,206,762 5,206,762 Transactions with ownersShare-based payments vesting 249 - (716,345) 716,345 249Share-based payments awards - - 408,852 - 408,852Dividends paid - - - (9,198,002) (9,198,002)At 31 July 2025 (unaudited) 63,435 9,920,760 968,590 5,827,556 16,780,340Profit for the period and totalcomprehensive income - - - 5,853,214 5,853,214 Transactions with ownersShare-based payments vesting - - - - -Share-based payments awards - - 442,468 - 442,468
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Dividends paid - - - (2,378,798) (2,378,798)At 31 January 2026 (audited) 63,435 9,920,760 1,411,055 9,301,975 20,697,225Profit for the period and totalcomprehensive income - - - 6,916,884 6,916,884 Transactions with owners Share-based payments vesting - - (1,196,105) 1,196,105 -Share-based payments awards - - 392,136 - 392,136Purchase of own shares into treasury - - - (1,510,556) (1,510,556)Cancellation of shares (89) - - - (89)Dividends paid - - - (5,418,732) (5,418,732)At 31 July 2026 (unaudited) 63,346 9,920,760 607,086 10,485,676 21,076,868 CONSOLIDATED STATEMENT OF CASH FLOWS For the period ended 31 July 2026 Note 6 months to July2026 (Unaudited)£ 6 months to July2025(Unaudited)£ Year ended 31January 2026(Audited)£ Cash flows from operating activities Profit before tax 9,243,327 6,931,660 14,671,612 Adjustments to cash flows from non-cash items Depreciation 2 346,214 346,056 691,074 Share-based payments 392,136 408,852 851,320 Revaluation of investment - - (184,388) Finance income (1,766,223) (1,578,727) (3,196,726) Finance costs 280,213 431,834 788,676 8,495,667 6,539,675 13,621,568 Working capital adjustments (Increase) in trade and other receivables (5,117,716) (2,076,333) (4,462,033)Increase in trade and other payables 4,859,838 2,419,825 4,139,102 (Decrease) / Increase in provisions (113,475) 35,895 178,595 Cash generated from operations 8,123,789 6,814,512 13,477,232 Interest paid on client balances (236,092) (377,191) (684,708) Interest portion of lease liability (44,121) (54,643) (103,968) Corporation taxes paid (1,670,492) (1,670,492) (3,675,873)Cash generated from operating activities 6,173,084 2,988,135 9,012,683 Cash flows from/(used in) investing activities Interest received 1,766,223 1,578,727 3,196,726Purchases of property, plant and equipment (38,170) (9,609) (85,068)Net cash generated from/(used in) investing activities 1,728,053 919,770 3,111,658 Cash flows from financing activities Proceeds from issue of ordinary shares - 248 249 Proceeds from LTIP vesting shares issued from treasury 448 - - Purchase of own shares into treasury (1,510,566) - - Lease repayments (253,827) (251,383) (490,878) Dividends paid (5,418,732) (9,189,002) (11,576,800)Net cash (used in) financing activities (7,182,677) (3,963,875) (12,067,429) Net (decrease)/increase in cash and cash equivalents 718,460 (3,181,656) 56,912 Cash at 1 February 9,744,084 9,687,172 9,687,172 Cash at 31 July 10,462,544 6,505,516 9,744,084 NOTES TO THE INTERIM REPORT 1. GENERAL INFORMATION The Company was incorporated as Keystone Law Group Limited on 13 May 2014 under the Companies Act 2006(registration no. 09039092) and subsequently used as the vehicle to acquire Keystone Law Limited (the maintrading company in the Group) and its subsidiaries on 17 October 2014. The Company was re-registered as aPublic Limited Company on 10 November 2017. The Company was incorporated and is domiciled in England andWales. The principal activity of the Group is the provision of legal services. The address of its registered office is:48 Chancery Lane London WC2A 1JF.
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The Interim Report is presented in Pounds Sterling, being the functional currency of the companies within theGroup. ACCOUNTING POLICIES STATEMENT OF COMPLIANCE The Interim Report has been prepared in accordance with the recognition and measurement principles of UK-adopted International Accounting Standards. BASIS OF PREPARATION The Interim Report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.The Group's statutory financial statements for the year ended 31 January 2026 have been filed with the Registrarof Companies. The auditor's report on those financial statements was unqualified and did not contain astatement under Section 498 (2) or (3) of the Companies Act 2006. The Interim Report information has beenprepared in accordance with the recognition and measurement principles of UK adopted International AccountingStandards, and on the same basis, and using the same accounting policies, as used in the financial statements forthe year ended 31 January 2026. The Interim Report has not been audited or reviewed, in accordance with the International Standard on ReviewEngagement 2410 (UK) issued by the Financial Reporting Council ("FRC"). GOING CONCERN The Interim Report has been prepared on a going concern basis as the Directors have reasonable expectation thatthe Group has adequate resources to continue in operational existence for the foreseeable future. The Group hasno debt, is strongly cash generative and has a strong trading performance. The Group's forecasts and projectionsshow that the Group has sufficient resources for both current and anticipated cash requirements. ACCOUNTING DEVELOPMENTS There have been no new standards or interpretations relevant to the Group's operations applied in the InterimReport for the first time. ADJUSTED PBT Adjusted PBT is utilised as a key performance indication for the Group and is calculated as follows: 6 months to July2026(Unaudited)£'000 6 months to July2025(Unaudited)£'000Profit before tax 9,243 6,932Share-based payments 392 409Adjusted PBT 9,635 7,341EARNINGS PER SHARE Basic earnings per share is calculated by dividing the profit for the period by the weighted average number ofordinary shares outstanding during the period. The weighted average number of shares in the period was31,669,151 (H1 2026: 31,625,863) and the basic earnings per share was 21.8p (H1 2026: 16.5p). Diluted earningsper share is calculated by dividing the same profit by the weighted average number of ordinary shares, taking intoaccount the dilution effect from grants made under the Long-Term Incentive Plan (32,255,277 ; H1 2026:32,210,899). Diluted earnings per share was 21.4p (H1 2026: 16.2p). The adjusted earnings per share was 23.1p (H1 2026: 17.8p), whilst the diluted adjusted earnings per share was22.7p (H1 2026: 17.4p). Adjusted earnings are stated by making the same adjustments to earnings as those madein calculating adjusted PBT. 2. EXPENSES BY NATURE Expenses are comprised of: 6 months to July2026(Unaudited)£ 6 months to July2025 (Unaudited)£Depreciation - right-of-use assets 231,810 232,050Depreciation - other 114,404 114,406Staff costs 4,427,645 3,907,870Share-based payments 392,136 408,852Other administrative expenses 4,690,379 4,104,844 9,856,374 8,768,022Included within staff costs above are the costs of employed fee earners who are included within cost of sale (H12027: £852,954; H1 2026: £801,018). 3. TRADE AND OTHER RECEIVABLES 31 July 2026(Unaudited)£ 31 July 2025(Unaudited)£ 31 January 2026(Audited)£Trade receivables 24,550,726 19,060,337 21,102,102Provision for impairment of trade receivables (6,675,704) (5,497,587) (6,675,704)
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Net trade receivables 17,875,022 13,562,750 14,426,398Accrued income 15,988,731 13,533,029 14,656,053Prepayments 2,040,590 1,305,226 1,959,022Unbilled disbursements 1,429,652 1,022,206 951,433Reimbursement asset 330,975 478,311 538,148Other receivables 240,323 141,963 256,524Total current trade and other receivables 37,905,293 30,043,484 32,787,578Net trade receivables average age (days) (unaudited) 33 33 35 4. DIVIDENDS The Directors have declared an interim ordinary dividend of 9.6p per share and a special dividend of 15p pershare (H1 2026: interim ordinary dividend of 7.5p per share). The dividends will be paid on 16 October 2026 toshareholders on the register on 25 September 2026, with the shares going ex-dividend on 24 September 2026. Inaccordance with IAS10 "events after the balance sheet date", these dividends have not been reflected in theInterim Report. Keystone Law 48 Chancery Lane London WC2A 1JF www.keystonelaw.co.uk This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authorityto act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this informationmay apply. For further information, please contact rns@lseg.com or visit www.rns.com. RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the informationcontained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. Forfurther information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy. END