DSW Capital PLC on Thursday warned its full year results will be below expectations amid tepid mergers & acquisitions markets.

Shares in DSW plunged 26% to 45.00 pence each in London on Thursday morning.

DSW is a Warrington, England-based financial advisory that provides advisory services in areas such as corporate finance and due diligence.

The firm saw five consecutive months of improving trading performance through to the end of December, with licensees reporting a return to more normalised levels of M&A activity.

However, DSW said it was ‘disappointing’ to see its Network revenue in January fall ‘substantially below our expectations’.

The firm now expects adjusted pretax profit for the year to March 31 in the range of £600,000 to £700,000, lower than its previous £1.1 million to £1.4 million guidance. This would be a decrease from a pretax profit of £1.4 million in financial 2023.

‘More significantly, in February, we have been advised of both slippage to some previously anticipated deal revenue and, to a lesser extent, deal aborts, which will impact the group’s FY 24 performance,’ it added.

‘Given the return to more uncertainty in the broader M&A market, the board is now more cautious for the FY25 outturn,’ it said.

Chief Exeuctive Officer James Dow said: ‘Whilst it is very disappointing that the improving trend we saw in the M&A market has stalled, our confidence in the medium-term outlook for the group is unwavering, and we remain well positioned for when the M&A market returns.

‘In the meantime, we continue to invest in recruitment and to grow the Network. Diversification into new service lines not reliant on mergers & acquisitions remains a focus. The business recovery and tax advisory licensees, which were acquired during the year, have performed well, and we are seeing record numbers of enquiries from potential new partners and licensees.’

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