HomeBusinessMARKET REPORT: Law firm halves in value as workers stay at home

MARKET REPORT: Law firm halves in value as workers stay at home


Legal and professional advisory firm Knights Group lost half its value yesterday after it warned difficulty in getting workers back to the office was hitting business.

It also warned of uncertainty over the economic outlook as it said it typically has a strong second half of the year – from November to April – and was confident this time around following growth of 9 per cent in the first half.

But Omicron resulted in higher rates of illness among its employees, meaning it failed to benefit from a return to office working as lockdown restrictions were eased.

Shares crash: Knights Group warned of uncertainty over the economic outlook as it said it typically has a strong second half of the year – from November to April

The group’s activity rates were also hit by a slowdown in corporate work attributed to a ‘softening’ of business confidence amid economic uncertainty.

Knights now expects profits for the year to the end of April of around £18million, down from £18.4million the previous year.

It is expecting growth of just 5 per cent next year due to uncertainty about the economy and the speed of people heading back to the office after working from home.

Boss David Beech said it was ‘frustrating’ that recent events had held the business back. The shares plunged 50.7 per cent, or 185p, to 180p.

The FTSE 100 was up 0.5 per cent, or 34.33 points, at 7476.72 while the FTSE 250 climbed 0.5 per cent, or 106.04 points, to 21112.60.

The blue-chip index was within striking distance of recovering all its losses suffered following Russia’s invasion of Ukraine, helped by its large collection of commodity-focused firms which have seen their share prices boosted as the conflict sparked fears of global shortages of raw materials, fossil fuels, and food. 

Banking stocks also supported the FTSE 100 after Federal Reserve chairman Jerome Powell suggested steeper interest rate hikes, a move that would boost the sector’s profitability.

Shares in Lloyds were up 3.3 per cent, or 1.61p, at 50.24p while Barclays rose 2.6 per cent, or 4.36p, to 172.86p, NatWest climbed 3.1 per cent, or 6.7p, to 222.5p, HSBC surged 3.2 per cent, or 15.8p, to 516.6p and Standard Chartered added 2.6 per cent, or 13.2p, to 519.2p.

Stock Watch – YouGov

YouGov gained after record half-year results.

The polling specialist reported a pre-tax profit for the six months to the end of January of £9.2million, up from £7.8million in the same period a year ago, while revenues jumped 28 per cent to £101.2million.

Demand remained strong as it expanded into 15 new markets and continued to invest in its technology.

As a result, it said trading was ‘slightly ahead’ of expectations for the full year. Shares jumped 7 per cent, or 80p, to 1220p. 

‘The rally in the commodities complex combined with the rising rate environment has played out favourably for the FTSE’s heavy weighting towards banking and energy stocks,’ said Victoria Scholar, head of investment at Interactive Investor.

Mid-cap IT firm Softcat upped its full-year guidance following strong half-year results. For the six months to the end of January, it reported a profit of £64.1million, up 12.4 per cent year-on-year, while revenues jumped 33.6 per cent to £770.9million.

As a result, it expected its full-year performance would be ahead of previous forecasts. Shares rose 3.9 per cent, or 67p, to 1786p.

DNA analysis group Oxford Nanopore slumped 4 per cent, or 17.5p, to 424.5p as full-year losses widened despite record revenue growth in its core business. 

It reported a loss for 2021 of £167.6million compared to a £61.2million loss the previous year, while revenues rose to £133.7million from £113.9million.

Auto Trader was on the acquisition trail, snapping up vehicle leasing group Autorama in a deal worth up to £200million, to help it meet demand from a growing number of potential leasing customers. It fell 4.4 per cent, or 29.6p, at 646.8p.

FTSE 250 oil and gas group Diversified Energy added 1.6 per cent, or 1.8p, to 116.8p after its full-year revenue surged 147 per cent to £754million in 2021 as its production jumped 19 per cent to 119,000 barrels of oil equivalent per day. Losses widened to £245million from £17.3million in 2020.

Meanwhile, Easyjet rose 1.5 per cent, or 7.6p, to 528p after it became the latest airline to relax mask-wearing rules, sparking hopes of a rise in traveller demand.

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