DSW Capital Expects Flat or Lower Pretax Profit for Fiscal 2024

Overview

DSW Capital, a U.K.-based professional-services business, has announced that it anticipates reporting a flat or lower adjusted pretax profit for fiscal 2024. Despite improvements in activity levels, the uncertainty surrounding the timing of merger-and-acquisition deals is expected to impact the company's financial performance.

Financial Outlook

For the year, DSW Capital expects an adjusted pretax profit between £1.1 million and £1.4 million ($1.4 million-$1.7 million), compared to £1.4 million in fiscal 2023. While achieving the higher end of the range remains possible, it is contingent on the completion of certain M&A deals before the year's end. As M&A constituted approximately 72% of the group's revenue the previous year, market activity greatly influences its bottom line.

Recent Trends

The company's licensees have witnessed more normalized levels of M&A activity during the three months ending October 31, following a period of subdued trading in spring and early summer due to challenging market conditions. DSW Capital also highlighted that its results, which usually favor the second half of the fiscal year, will benefit from increased M&A activity and the contribution of Bridgewood, a company that joined its network in July.

Half-Year Performance

For the six months ended September 30, DSW recorded an adjusted pretax profit of approximately £200,000, compared to £900,000 during the same period the previous year. Network revenue for the half-year decreased to £7.3 million from £9.8 million, while total income from licensees declined to £1.1 million from £1.6 million.