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(Sharecast News) - Keystone Law reported full-year revenue and profit growth marginally ahead of market expectations on Wednesday, supported by strong client demand and a record number of fee earner additions.
The AIM-traded tech-enabled platform law firm said revenue rose 17.9% to 115.2m in the year ended 31 January 2026, from 97.7m a year earlier.
Revenue per principal increased 10.5% to 243,000 from 220,000.
Adjusted profit before tax rose 20.6% to 15.3m from 12.7m, representing an adjusted PBT margin of 13.3%, compared with 13.0% in the prior year.
Adjusted basic earnings per share increased to 37.0p from 30.4p.
Cash generated from operations rose 17% to 13.5m, with operating cash conversion improving to 98.9% from 94.5%. Net cash was unchanged at 9.7m.
Keystone paid an interim ordinary dividend of 7.5p per share and proposed a final ordinary dividend of 17.2p, taking the total ordinary dividend for the year to 24.7p per share, up from 20.2p in 2025.
The company said it delivered strong operational and financial performance, with client demand across the business.
Recruitment activity was also robust, with 294 qualified new applicants during the year, compared with 283 a year earlier.
Keystone recruited 61 new principals, up from 50 in the prior year, taking total principals to 491 from 455.
Accepted offers rose 31% to 68 new joiners, while other fee earners increased 35% to 163, comprising 146 pod members and 17 central office lawyers.
Total fee earners rose 13.5% to 654.
The group said its quality-focused recruitment strategy continued to reinforce its position as "the premier platform law firm".
It said 221 Keystone lawyers were ranked in the Legal 500 UK Solicitors 2025, up from 207 a year earlier and 65 in 2019.
Chief executive James Knight said Keystone had delivered "another excellent year".
"We delivered another excellent year for Keystone, with strong operational and financial momentum driven by sustained client demand and continued growth in lawyer numbers," he said.
Keystone said it was continuing to invest in its technology platform and artificial intelligence capabilities.
The group rolled out several AI initiatives for lawyers, including secure, locked-down versions of ChatGPT and Claude, and adopted the NetDocuments AI extension.
The company also completed a brand refresh, launching a new website and marketing materials in the first quarter of the 2027 financial year to improve stakeholder experience and strengthen its market position.
"Our brand refresh, which more accurately reflects the evolution of Keystone, underscores our ambition and further reinforces our position as the premier tech-enabled platform law firm," Knight said.
"In addition, the ongoing investment in IT infrastructure and AI capabilities continues to differentiate our highly scalable model, underpinning both our strong balance sheet and progressive dividend policy."
Keystone said it had made a positive start to the 2027 financial year, with client demand and recruitment activity remaining positive in the first quarter.
The board said it remained confident the group would continue to deliver strong, sustainable growth and expected adjusted profit before tax for 2027 to be ahead of current market expectations.
At 1153 BST, shares in Keystone Law Group were up 8.84% at 517p.
Reporting by Josh White for Sharecast.com.
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