Knights Group Holdings
Website:
Knights Group Holdings
Index:
AIM
EPIC: KGH
Supersector:
Industrial Goods and Services
Sector:
Support Services
Subsector:
Business Support Services
Market Cap:
£151.31M
Payout Frequency: Semi-Annual
Knights Group Holdings Dividend Analysis and Summary
Key Dividend Details
- Dividend declared: Interim dividend of 1.94p per share (up 10% vs 1.76p).
- Ex-dividend date: 12/02/2026 (derived as one business day before the record date).
- Record date: 13/02/2026.
- Payment date: 13/03/2026.
- Form of payment: Cash only (no scrip/DRIP).
- Indicative cash cost: ~£1.66m (1.94p on c. 85.4m shares).
- Earnings cover: ~7.3x vs H1 underlying EPS of 14.09p; payout c. 14% of H1 underlying PAT (£12.0m).
Result Context Relevant to the Dividend
- Underlying revenue up 30% to £103.2m; underlying PBT up 12.5% to £16.4m; basic underlying EPS up 11% to 14.09p.
- Cash conversion strong at 122%; lock-up improved to 95 days (debtors 32 days).
- Reported loss after tax of £0.3m due to elevated non-underlying acquisition-related costs; underlying profitability remains solid.
- Net debt £75.2m; leverage 1.8x (within covenants). £100m RCF extended to November 2028 on same terms.
- Underlying margins modestly lower (EBITDA margin 24.7%; PBT margin 15.9%) reflecting higher payroll taxes, lower client interest income and tech/AI investment.
Dividend Sustainability and Growth
- Sustainability: The interim dividend appears well-covered by underlying earnings and cash flow (7.3x cover; 122% cash conversion). Working capital discipline and improved lock-up support cash-funded distributions.
- Growth trajectory: A 10% uplift aligns with the stated progressive policy and H1 underlying EPS growth (+11%). Future growth will likely track underlying EPS, moderated by reinvestment priorities.
- Support from financials/capital allocation: While operating cash generation is strong, elevated non-underlying acquisition costs, rising finance charges and higher net debt temper headroom. The Board’s language emphasises balancing returns with reinvestment and M&A, implying a prudent, incremental dividend path rather than aggressive increases.
Structural Changes and Capital Allocation Watchpoints
- M&A-driven expansion: Acquisitions of Birkett Long (incl. BL IFA), Rix & Kay, and Le Gros; integrations progressing well. Partial disposal of BL IFA customer book and disposal of IBB’s crime business completed.
- Deferred/contingent consideration: Multiple deals include deferred and contingent earn-outs payable over 1–3 years. These are non-underlying in P&L but represent real future cash outflows and can crowd out dividend capacity if growth underperforms.
- Financing: £100m RCF extended to Nov-2028; leverage at 1.8x. Debt capacity supports M&A but raises ongoing interest cost and covenant considerations for dividend policy.
- Technology investment: Ongoing AI and infrastructure spend (and a new CTO) are strategic, but near-term margin dilutive—management framing suggests continued reinvestment priority alongside a progressive dividend.
Risks and Flags for Dividend Stability
- Balance sheet/leverage: Net debt of £75.2m and higher finance costs (+£1m YoY) reduce flexibility; sustained leverage or higher rates could limit dividend growth.
- Non-underlying/acquisition costs: Elevated restructuring, contingent consideration and lease-related charges depress reported earnings and consume cash.
- Margin pressure: Underlying margin compression from payroll tax increases and tech investment could cap earnings growth if not offset by pricing/mix and productivity gains.
- Integration execution: Continued acquisition integration and retention of key fee earners are critical; slippage could affect cash flow and cover.
- Cyclical exposure: Parts of the practice (e.g., property-related) are sensitive to macro/interest rate trends; a slowdown could weigh on organic growth and cash generation.
Read more
Knights Group Holdings Annual Dividend Yield - 2.73%
Dividends Used in Calculation:
| Ex-Dividend Date |
Payment Date |
Type |
Amount |
Currency |
| 13/02/2025 |
14/03/2025 |
Interim |
1.76p |
GBX |
| 09/10/2025 |
07/11/2025 |
Final |
3.05p |
GBX |
Total (Annual Dividends Per Share):
4.81p
Dividend Yield =
Annual Dividends Per Share (4.81p)
÷ Share Price (176p)
= 2.73%
Knights Group Holdings Dividend History
| Ex Dividend Date |
Payment Date |
Type |
Amount |
Currency |
| 12/02/2026 |
13/03/2026 |
Interim |
1.9400p |
GBX |
| 09/10/2025 |
07/11/2025 |
Final |
3.05p |
GBX |
| 13/02/2025 |
14/03/2025 |
Interim |
1.76p |
GBX |
| 29/08/2024 |
27/09/2024 |
Final |
2.79p |
GBX |
| 15/02/2024 |
15/03/2024 |
Interim |
1.61p |
GBX |
| 31/08/2023 |
29/09/2023 |
Final |
2.50p |
GBX |
| 16/02/2023 |
17/03/2023 |
Interim |
1.53p |
GBX |
| 01/09/2022 |
30/09/2022 |
Final |
2.04p |
GBX |
| 17/02/2022 |
17/03/2022 |
Interim |
1.46p |
GBX |
| 13/02/2020 |
16/03/2020 |
Interim |
1.10p |
GBX |
| 29/08/2019 |
30/09/2019 |
Final |
1.27p |
GBX |
| 14/02/2019 |
15/03/2019 |
Interim |
0.60p |
GBX |
| Year |
Interim |
Final |
Currency |
Total |
Change |
| 2024 |
1.610 |
2.790 |
GBX |
4.400 |
9.180 |
| 2023 |
1.530 |
2.500 |
GBX |
4.030 |
15.140 |
| 2022 |
1.460 |
2.040 |
GBX |
3.500 |
218.180 |
| 2020 |
1.100 |
|
GBX |
1.100 |
-41.170 |
| 2019 |
0.600 |
1.270 |
GBX |
1.870 |
|
Knights Group Holdings Dividend Calculator
Knights Group Holdings Dividend Growth
| Dividend Growth (1Y) |
9.67%
|
| Dividend CAGR (5Y) |
27.86%
|
| Years of Growth |
4
|
| Payout Ratio |
127.5%
|
| Buyback Yield |
-1.68%
|
| Shareholder Yield |
1.24%
|
| P/E Ratio (TTM) | 137.39 |
|---|
| Forward P/E | 6.66 |
|---|
| P/FCF | 7.49 |
|---|
| Earnings Yield | 0.78% |
|---|
| FCF Yield | 13.34% |
|---|
| ROE | 1.15% |
|---|
| ROCE | 9.24% |
|---|
| Profit Margin | 0.64% |
|---|
| Operating Margin | 12.63% |
|---|
| Gross Margin | 40.03% |
|---|