Successful IPO for company behind Dow Schofield Watts

Nicole Burstow and James Dow

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DSW CAPITAL – the company behind Dow Schofield Watts, the fast-growing professional services network which has an office in Aberdeen – has raised £5m in a successful Initial Public Offering (IPO). The flotation gives the company a market capitalisation of £21.4m, based on a share price of 100p.

DSW Capital operates a platform business model that provides a flexible and autonomous alternative to traditional accounting and professional services firms. It currently has 19 licensee businesses with 82 fee earners. The Aberdeen office was founded in 2019 by Tom Faichnie and Melanie Clark, both of whom have backgrounds in big four accounting firms, and offers services including corporate finance and due diligence.

DSW Capital also has offices in Daresbury, Manchester, Leeds, London and Reading. Its vision is for the Dow Schofield Watts network to become the most sought-after destination for ambitious, entrepreneurial professionals to start and develop their own businesses.

DSW’s challenger model encourages diversity and the firm is attracting a high level of female partners. Circa 22% of Dow Schofield Watts partners are female, similar to the levels seen at the Big 4. However, the majority of female partners at Dow Schofield Watts operate in Corporate Finance and Transaction Services, areas traditionally dominated by male partners.

DSW offers partners complete flexibility and autonomy and a direct link between revenue and reward, alongside the benefits of a central infrastructure and wider network. At a time when the accounting services sector is undergoing a major shake-up and many professionals are rethinking their priorities and life choices in the wake of the pandemic, DSW is an increasingly attractive alternative.

For the year ended 31 March 2021, DSW Capital received an average licence fee of 14.7% of licensee revenues and generated Operating Profit of £1.7 million and operating cash flow of £0.8 million. The three-year historical Dow Schofield Watts network revenue CAGR to FY21 was 22%.

DSW Capital aims to use the funding to scale through organic growth, geographical expansion, additional service lines and invest in ‘break outs’ – existing teams in larger firms. The Directors are targeting high margin, complementary, niche service lines with a strong synergistic fit with the existing Dow Schofield Watts network.

James Dow, CEO of DSW Capital, commented: “We are delighted to announce our IPO and admission to AIM, which are important milestones for DSW Capital. The successful fundraise will support our strategy to capitalise on the substantial growth opportunities presented in the changing UK accounting market and our vision to become the most sought-after destination for ambitious, entrepreneurial professionals to start and develop their own businesses.

“The success of our model is demonstrated by the rapid rise of the DSW Network up the sector rankings. We believe our new quoted company status will help raise the profile of DSW further, enabling us to accelerate the growth of our Network.”

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