Separating bought growth from home-grown growth

Knights Group Holdings (LSE:KGH) completed its purchase of parts of Moore Barlow on 2 November 2026, five weeks after closing the smaller THP Solicitors deal. With two acquisitions now inside the group, a useful question for investors is how much of Knights' expansion comes from winning more work with existing teams and how much is bought. Its full-year results of 6 July 2026 provide the clearest answer available so far.

About the buy-and-build model

Knights acquires regional law firms and brings them into one structure with shared systems and central functions. Because lawyers are employed rather than being owner-partners, the group has more control over costs and standards, and it can add services such as private Wealth or commercial work across its network. Acquisitions increase Revenue immediately but also bring costs of integration, and their value depends on whether acquired teams continue to grow.

A regional consolidator of legal services

LSE:KGH is a legal and professional services Business that has grown by acquiring regional law firms and moving them on to a single corporate structure, with fee earners employed rather than operating as owner-partners. Chief executive David Beech leads that strategy. Its financial year runs to 30 April, so the two latest deals will first appear in the half-year to 31 October 2026.

What the full-year figures said about organic growth

Underlying revenue rose 28% to £207.7m in the year to 30 April 2026. Organic growth was 7% for the full year and 12% in the second half, implying a markedly weaker first half. Underlying EBITDA increased 20% to £51.5m and underlying pre-tax profit rose 19% to £33.2m. Reported pre-tax profit fell to £10.2m from £12.3m, mainly because of higher acquisition-related costs. Mr Beech pointed to double-digit organic growth in the second half.

Net Debt was broadly flat at £65.4m after about £17m of acquisition-related payments, and the group renewed and extended its £159m revolving Credit facility. That suggests cash generation was sufficient to absorb the year's deal payments without adding to borrowings.

The distinction matters because organic growth is usually a better guide to underlying Demand and client loyalty than acquired revenue, which arrives with a purchase price and integration costs attached. A buy-and-build model rewards shareholders only if acquired firms keep growing inside the group; otherwise it depends on continually finding and financing new targets.

What the two new businesses add

THP Solicitors, based in Reading and the Thames Valley, cost £4m on a cash-free, debt-free basis, with £2.4m paid initially from existing banking facilities and the rest due in instalments over three years. It brings about 30 fee earners and strengthens private wealth work. The Moore Barlow deal covers its commercial and private wealth service lines for £27m in cash. Those lines generated about £30m of Moore Barlow's £45m revenue in the year to April 2026 and bring around 160 fee earners in the South East and South Central regions.

The Moore Barlow lines alone equal roughly 14% of Knights' latest underlying revenue, so acquired growth is likely to dominate headline revenue progress in the current year.

Limits and risks

Integration carries risk: retaining fee earners and clients after a change of ownership is critical in a people business, and the forecast 18% Margin for Moore Barlow depends on synergy savings being delivered. Acquisition costs have already depressed reported profit, and further deals would add debt. Demand for property and private client work is sensitive to housing transactions and wider economic conditions.

Organic and acquired growth in the numbers

Underlying revenue rose 28% to £207.7m, which implies prior-year revenue of about £162.3m, an increase of about £45.4m. Organic growth of 7% would account for about £11.4m, so about £34m came from acquisitions. That means roughly three quarters of the increase was bought. The second-half organic rate of 12% against 7% for the full year implies that the first half grew at a low single-digit rate, which makes the second-half trend the most relevant guide.

Profit and debt

Underlying EBITDA of £51.5m on revenue of £207.7m is a margin of about 24.8%. Underlying pre-tax profit of £33.2m rose 19%, slightly less than EBITDA's 20% rise, which suggests higher Depreciation or finance costs. Reported pre-tax profit of £10.2m is much lower than the underlying figure, and the gap of £23.0m consists mainly of acquisition-related and other adjusting items. Net debt of £65.4m is about 1.3 times underlying EBITDA, a moderate level of leverage. The £159m revolving credit facility, renewed and extended, provides headroom.

Sizing the new deals

Moore Barlow's relevant service lines generated about £30m of revenue, so £27m in cash is about 0.9 times revenue. With about 160 fee earners, the revenue per fee earner would be about £187,500. THP's price of £4m for about 30 fee earners is about £133,000 per fee earner. Together the two deals add about 190 fee earners, compared with the group's existing base, and revenue of around £30m from Moore Barlow plus THP's contribution, which the company has not set out.

Timing and reporting

Because the financial year ends on 30 April, the half-year to 31 October 2026 will include THP for about a month and Moore Barlow for just a few days, so the full effect of both deals appears in the second half and the following year. The £2.4m initial payment for THP from existing facilities, with the rest due over three years, spreads the cost.

Integration risk

Buying law firms brings the risk that fee earners leave, that clients move elsewhere, or that systems take longer than expected to combine. The group has described its approach of moving acquired firms onto a single corporate structure, and the first full set of results including both deals will show how well that has worked. Retention of partners and fee earners at Moore Barlow's relevant service lines is a central factor.

The next reporting points

LSE:KGH said trading in the new financial year had started positively and that Moore Barlow should be Earnings enhancing in its first full year of ownership. The next test will be its half-year report for the six months to 31 October 2026. Investors will look for an organic growth figure that can be compared directly with the 12% second-half rate, alongside early evidence on how integration is progressing.