DSW Capital PLC shares tumbled Friday morning, after it said it no longer expects to meet current market expectations for the year on a worsened performance over the second half.

DSW is a Warrington, England-based professional services licence network and owner of the Dow Schofield Watts brand.

Shares in the company plummeted 21% to 92.75 pence each in London on Friday morning.

DSW said that despite a ‘very strong’ first half performance, the normally more-important second half has been hurt by wider macroeconomic challenges and uncertainties. As a result, it no longer expects to meet market expectations.

For the year ending March 31, 2023, DSW now expects revenue between £2.8 million and £3.1 million, down from £3.0 million the year prior.

Earnings before interest, tax, depreciation and amortisation are expected to be between £1.4 million and £1.7 million, down from £2.2 million the previous year.

DSW attributed the downturn in performance to several factors, including a worse-than-expected Christmas period.

It noted that while December is traditionally an ‘important month’ for the group, deal slippage and caution in the market led to a significantly worse performance, as deals were not executed as expected.

Uncertainty has also hurt recruitment. No further fee earners have joined the network since the start of October, keeping the total at 97.

As at December 31, DSW held cash balances of £4.8 million.

‘Following a very strong first half of the year, the board is extremely frustrated by this recent confluence of events which has stuttered the previous excellent growth experienced by the group since our flotation. Whilst there is now a broad range of possible outcomes for FY23, we have confidence in the robustness of our business model, strength of the balance sheet and the ability of our partners to adapt,’ said Chief Executive Officer James Dow.

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