LSE:DWF

Stock Analysis Report

Executive Summary

DWF Group plc provides various legal services and complementary connected services in the United Kingdom and internationally.

Rewards

Trading at 77.6% below its fair value

Earnings are forecast to grow 45.6% per year

Earnings grew by 47.9% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Highly volatile share price over past 3 months

Large one-off items impacting financial results



Snowflake Analysis

Reasonable growth potential and fair value.

Share Price & News

How has DWF Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DWF's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-11.3%

DWF

10.7%

GB Professional Services

6.0%

GB Market


1 Year Return

-25.9%

DWF

1.0%

GB Professional Services

-22.7%

GB Market

Return vs Industry: DWF underperformed the UK Professional Services industry which returned 1% over the past year.

Return vs Market: DWF underperformed the UK Market which returned -22.7% over the past year.


Shareholder returns

DWFIndustryMarket
7 Day-11.3%10.7%6.0%
30 Day-32.7%-14.4%-20.3%
90 Day-26.8%-15.9%-28.1%
1 Year-23.8%-25.9%3.4%1.0%-18.6%-22.7%
3 Yearn/a23.1%14.8%-13.4%-24.6%
5 Yearn/a73.1%52.6%1.3%-22.0%

Price Volatility Vs. Market

How volatile is DWF Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is DWF Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DWF (£0.9) is trading below our estimate of fair value (£4.02)

Significantly Below Fair Value: DWF is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: DWF is poor value based on its PE Ratio (23.7x) compared to the Professional Services industry average (15.1x).

PE vs Market: DWF is poor value based on its PE Ratio (23.7x) compared to the UK market (12.5x).


Price to Earnings Growth Ratio

PEG Ratio: DWF is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: DWF is overvalued based on its PB Ratio (6x) compared to the GB Professional Services industry average (2.1x).


Next Steps

Future Growth

How is DWF Group forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

45.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DWF's forecast earnings growth (45.6% per year) is above the savings rate (0.5%).

Earnings vs Market: DWF's earnings (45.6% per year) are forecast to grow faster than the UK market (15.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: DWF's revenue (11.1% per year) is forecast to grow faster than the UK market (2.6% per year).

High Growth Revenue: DWF's revenue (11.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if DWF's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has DWF Group performed over the past 5 years?

-49.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DWF has a large one-off loss of £5.4M impacting its October 31 2019 financial results.

Growing Profit Margin: DWF's current net profit margins (3%) are higher than last year (2.5%).


Past Earnings Growth Analysis

Earnings Trend: DWF's earnings have declined by -49.6% per year over the past 5 years.

Accelerating Growth: DWF's earnings growth over the past year (47.9%) exceeds its 5-year average (-49.6% per year).

Earnings vs Industry: DWF earnings growth over the past year (47.9%) exceeded the Professional Services industry 12%.


Return on Equity

High ROE: Whilst DWF's Return on Equity (25.3%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is DWF Group's financial position?


Financial Position Analysis

Short Term Liabilities: DWF's short term assets (£190.8M) exceed its short term liabilities (£96.9M).

Long Term Liabilities: DWF's short term assets (£190.8M) exceed its long term liabilities (£140.2M).


Debt to Equity History and Analysis

Debt Level: DWF's debt to equity ratio (171.8%) is considered high.

Reducing Debt: DWF's debt to equity ratio has increased from 69% to 171.8% over the past 5 years.

Debt Coverage: DWF's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: DWF's interest payments on its debt are well covered by EBIT (8.6x coverage).


Balance Sheet

Inventory Level: DWF has a high level of physical assets or inventory.

Debt Coverage by Assets: DWF's debt is covered by short term assets (assets are 2.8x debt).


Next Steps

Dividend

What is DWF Group's current dividend yield, its reliability and sustainability?

2.78%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DWF's dividend (2.78%) is higher than the bottom 25% of dividend payers in the UK market (2.7%).

High Dividend: DWF's dividend (2.78%) is low compared to the top 25% of dividend payers in the UK market (7.3%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether DWF's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if DWF's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (59.3%), DWF's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DWF's dividends in 3 years are forecast to be covered by earnings (67.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure


CEO

Andrew Leaitherland

13.83s

Tenure

UK£506,668

Compensation

Mr. Andrew R. Leaitherland has been Chief Executive Officer of DWF Group Plc since May 2006 and serves as its Director since September 10, 2018 and Member of Executive Board. Mr. Leaitherland was Managing  ...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD628.90K) is below average for companies of similar size in the UK market ($USD1.02M).

Compensation vs Earnings: Insufficient data to compare Andrew's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Andrew Leaitherland
CEO, Member of Executive Board & Director13.83yrsUK£506.67k2.41% £6.4m
Christopher Stefani
CFO, Member of Executive Board & Director1.5yrsUK£2.11m0.38% £1.0m
Stefan Paciorek
CEO of International Division & Member of Executive Board2.42yrsno data1.11% £2.9m
Mollie Stoker
General Counselno datano datano data
Helen Hill
Director of Human Resources & Member of Executive Boardno datano datano data
Daniel Pollick
Chief Information Officer & Member of Executive Boardno datano datano data
Stephen Miles
CEO of Commercial Services Division5.58yrsno data1.27% £3.4m
Jason Ford
Head of Connected Services & Member of Executive Board2.67yrsno data0.051% £135.1k
Zelinda Bennett
Marketing & Client Development Director and Member of Executive Boardno datano datano data
Glyn Jones
Partner1.83yrsno data1.27% £3.4m

3.3yrs

Average Tenure

Experienced Management: DWF's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Andrew Leaitherland
CEO, Member of Executive Board & Director13.83yrsUK£506.67k2.41% £6.4m
Christopher Stefani
CFO, Member of Executive Board & Director1.5yrsUK£2.11m0.38% £1.0m
Vinodka Murria
Independent Non-Executive Director1.33yrsUK£7.92k0.14% £368.9k
Nigel Knowles
Chairmanno dataUK£24.36k0.90% £2.4m
Luke Savage
Independent Non-Executive Director1.33yrsUK£8.83k0.0056% £14.8k
Matthew Doughty
Partner Director1.33yrsno data0.90% £2.4m
Christopher Sullivan
Senior Independent Director1.33yrsUK£9.14k0.14% £368.9k
Samantha Tymms
Independent Non-Executive Director1.25yrsUK£8.83kno data
Teresa Colaianni
Independent Non-Executive Director1.33yrsUK£8.83k0.017% £44.3k

1.3yrs

Average Tenure

57yo

Average Age

Experienced Board: DWF's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: DWF insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

DWF Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: DWF Group plc
  • Ticker: DWF
  • Exchange: LSE
  • Founded: 2018
  • Industry: Research and Consulting Services
  • Sector: Commercial Services
  • Market Cap: UK£264.398m
  • Shares outstanding: 293.78m
  • Website: https://www.dwf.law

Number of Employees


Location

  • DWF Group plc
  • 20 Fenchurch Street
  • London
  • Greater London
  • EC3M 3AG
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DWFLSE (London Stock Exchange)YesShare CapitalGBGBPMar 2019

Biography

DWF Group plc provides various legal services and complementary connected services in the United Kingdom and internationally. The company operates through four divisions: Commercial Services, Insurance Services, International, and Connected Services. It offers a range of complex legal services and managed services covering areas, such as business restructuring, commercial and competition, tax and private capital, employment, finance, pensions, real estate, debt recovery, asset management, and housing and planning. The company also provides legal services and managed services predominantly to insurers and their insureds covering catastrophic personal injury, occupational health and casualty, motor, fraud, and resolution law, as well as professional indemnity and commercial insurance practice groups. In addition, it offers a digital claims platform and software solutions, as well as services in the areas of specialist lawyers and barristers, forensic accountants, and investigators. The company was incorporated in 2018 and is based in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 01:23
End of Day Share Price2020/03/27 00:00
Earnings2019/10/31
Annual Earnings2019/04/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.