DSW Capital has said several UK deals have been ‘aborted or postponed’ because of uncertainty caused by the Middle East conflict.
The Daresbury-based challenger professional services platform – and owner of the Dow Schofield Watts and DR Solicitors brands – made the admission in a trading update for the year ending March 31, 2026.
The announcement resulted in a significant fall in its share price in early morning trading. It opened at 50p but dropped to 41p before recovering to 46p.
The board said that despite double-digit growth at DR Solicitors in FY26 and steady trading across the network, the Iran war has severely impacted M&A activity in the UK.
Several deals that the group expected to complete in March have been aborted or postponed until the long-term economic ramifications of the war were established.
Last week online travel agent On The Beach reported a ‘significant slowdown in demand’ because of the Middle East conflict with a big drop in bookings for holidays to Turkey, Greece, Cyprus and Egypt in particular.
Shru Morris, chief executive of DSW Capital, said: “Whilst it is very disappointing that the robust performance of FY26 has stalled, the board’s strategic aim continues to focus on growing the business and building a resilient and diversified group of licensee businesses.
“The acquisition of DR Solicitors and its subsequent growth, reducing the group’s dependency on M&A activity significantly, demonstrates this strategy in action.
“Our efforts remain concentrated on attracting additional licensees and consultants, whilst we are also pursuing new business at DR Solicitors, which continues to grow stronger since its acquisition.
“The group remains profitable and cash generative, despite the current geo-political and economic uncertainties, with a strong pipeline of diversification opportunities in its sights and will announce a full trading update post year end, in May 2026, in line with its usual timetable.”
March is traditionally an important month for M&A completions, ahead of the tax year end.
While the group has continued to deliver on its strategic drive to diversify away from a historic reliance on M&A, achieving revenue growth of c.11 per cent at DR Solicitors in FY26 to date, March currently remains a critical month for the business in terms of full year outturn.
Following the rapid and significant drop off in M&A activity, the board now expects to report total Income of c.£6.2m, adjusted EBITDA of c.£1.6m and adjusted profit before tax of c.£1.3m for FY26.
Cash reserves remain strong with cash of £1.4m at February 28th and net debt of £500k.
This is after £1m loan repayment of the £3m OakNorth Bank revolving credit facility, drawn down fully to part fund the acquisition of DR Solicitors, and £800k dividend payments across October 2025 and January 2026.
Originally established in 2002, by three KPMG alumni, Dow Schofield Watts is one of the first platform models disrupting the traditional model of accounting professional services firms.
DSW Capital operates licensing arrangements with its businesses and has over 130 fee earners across 12 offices in the UK.
These businesses trade primarily under the Dow Schofield Watts and DR Solicitors brands.