(AIM:KEYS ) has said it is in ‘a strong position’ to deal with the financial and operational impact of the COVID-19 global pandemic. Trading for 2020 is in-line with expectations for the six weeks ended 31 January.
Notwithstanding the above, due to the ongoing uncertainty around COVID-19, the board has decided against recommending a final dividend payment to shareholders in order to ‘protect the liquidity of the business.’
"Keystone is both financially and operationally very robust and I am confident that the fundamental strengths of our model will prove themselves through this situation,” said James Knight, Chief Executive of Keystone.
The firm says it is ‘highly resilient’ to economic volatility due to the 'capital light' nature of the business and the high proportion of its cost base is fully variable with most lawyers’ fees representing around 75% of revenue. Furthermore, by the end of the period, the Company’s net cash position was recorded at £4.4m with the group having been cash generative in the period since year end. By the end of the same period, its net cash position was recorded at £4.4m with the group having been cash generative in the period since year end.
Keystone said its service delivery model, whereby lawyers operate on a remote basis, remains ‘substantially unaffected’ by the UK Government’s restrictions on movement. As a result, the group considers its service delivery capability as ‘robust as it was before the COVID-19 outbreak.’
Shares in Keystone Law were trading 1.32% higher at 385p during Friday trading.
However, due to the unprecedented nature of the current situation, the group recognises that any financial impact for the year ending 31 January 2021 cannot yet be assessed. As a result, the board has decided against recommending a final dividend payment to shareholders in order to ‘protect the liquidity of the business.’
“Once it has passed, we will again be able to move forwards and take advantage of the sizeable market opportunity that exists and will continue to exist in the future,” added Knight.
Keystone delivers conventional legal services across more than 20 service areas and over 50 industry sectors to a client base comprising predominantly of SMEs and private individuals.
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