DSW Capital – an increase in M&A activity will show through to increase the bottom line, shares are undervalued at 45p
Mark Watson-Mitchell - 29.09.2026
Tomorrow, Wednesday 30th September, the £11.5m-capitalised DSW Capital (LON:DSW) will hold its AGM for its year to end-March, I look for some positive corporate comment to follow, which should help to push its shares higher in price.
The Group is a profitable, mid-market, challenger professional services licence network and owner of the Dow Schofield Watts and the DR Solicitors brands.
DSW provides a very useful range of advice for companies, guiding them through pivotal moments with expertise in deal advisory, tax, investment, business recovery, and legal services.
In the 2026 year, it saw a decline in its M&A activity, from over half to just under a third of Group volumes.
Its shares, which in the last year have ranged in price from 35p up to 80p, are currently only 45p – which looks appealing to me, offering a decent upside.
The Business
First conceived in 2008, the DSW licence model allows ambitious professionals to use the DSW and DR Solicitors brands.
It provides professionals with start-up funding and can take care of all aspects associated with the running of the ‘office’ including IT, compliance guidance, accounting, marketing, recruitment, people development support and banking.
That model enables its partners to hit the ground running and focus on growing their respective businesses, maximising their profit capabilities and building a legacy.
In return, DSW receives a percentage of the licensee’s revenue, and in some cases a percentage of the licensee’s profits.
Licensees are responsible for collecting their own cash from clients to fund partner drawings and pay employees, which drives strong cash collections across the Group.
Its platform, which is built for ambitious professionals, brings together experienced professionals across corporate finance, accountancy, tax, legal and specialist advisory services.
Combining entrepreneurial freedom with the strength of a national brand, shared infrastructure and expert support, DSW enables its Partners to focus on what they do best - building exceptional businesses and delivering outstanding advice to their clients.
At the end of the 2026 trading year, it had 135 fee earners, 23 network members and 12 offices across the UK.
Its network of professionals provides expert advice across 10 service lines, working with their clients to create, protect and realise value.
Those service lines cover: Corporate Finance; Transaction Services; Business Recovery; Debt Advisory; Tax Advisory; Equity Finance Start; Venture Capital Funding; Business Planning; Asset Based Lending Risk Management; and Legal Services.
This platform model is highly cash-generative, reflecting the capital-light nature of its business and the strength of its network.
In FY26, the Group generated £1.8m in cash from operations, reinforcing its ability to self-fund growth and maintain financial flexibility.
That consistent cash-generation is a core strength of its model, enabling disciplined reinvestment while supporting shareholder returns.
Management Comments
Commenting upon the Group’s Outlook, Heather Lauder, Non-Executive Chair noted that:
“While we remain mindful of the broader macro-economic environment, and its potential impact on market activity, the strength of our model, the quality of our licensees, and the agility of our leadership team give us confidence in our ability to navigate challenges and seize new opportunities.
The Board looks forward to FY27 with cautious optimism and remains excited about the long-term prospects for the Group. “
CEO Shrutisha Morris stated that:
“Trading in the early part of the new financial year has been encouraging, despite continued geopolitical and macroeconomic uncertainty.
While mindful of these uncertainties and the upcoming Budget, the Group remains financially strong, with robust cash generation, a scalable model, and a low fixed cost base.
We are building a strong and resilient business, capable of delivering sustainable growth and long-term shareholder value.
The prospects and opportunity for the Group remains strong and we face the future with confidence.”
The Equity
There are some 25.13m shares in issue, of which 13.87m (55.20%) represent shares not ‘in public hands’ - the largest holder is James Dow with 17.14% of the equity, while Nils Christiansen holds 12.75%, Mark Watts (11.90%), James Tipping (7.00%), Philip Price (5.95%), Adam Dow (3.10%, and Susannah Dow (3.09%) are all among the main holders.
Broker’s View
Analyst Ben Williams, at Shore Capital Markets, has estimates out for the current year to end-March 2027, looking for revenues to rise to £6.9m (£6.3m), with adjusted pre-tax profits of £1.5m (£1.3m), generating earnings of 4.4p (4.2p) per share and paying out an unchanged 3.2p dividend.
For the coming 2028 year, he sees £7.7m revenue, £1.8m profit, 5.3p earnings and a 3.3p dividend.
The year to end-March 2029 could report £8.5m revenue, £2.1m profit, 6.3p of earnings and a 3.5p dividend.
He noted that the last trading year to end-March 2026 saw M&A volumes fall to just 31% of the total income, compared to 55% in 2025.
Even so, the Group was still growing despite the weak M&A business, while its pipeline of opportunities to scale the platform is said to be increasing.
My View
I like this business model because it offers a certain strength to its licensees, as well as its shareholders.
It would appear that overall administration costs are set to reduce by £200,000 this year and by £400,000 in 2028 – as per analyst estimates those reductions will be reflected in the bottom-line tallies.
The shares, now at 45p, will soon respond to greater deal-making activity in the UK marketplace; I see 55p as being an easy early price objective.
(Profile 29.09.26 @ 45p set a Target Price of 55p)
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