Accountancy network 'challenger' with Aberdeen office in successful IPO

DSW Capital, owner of Dow Schofield Watts, the fast-growing professional services network with an office in Aberdeen, has raised £5 million in a successful initial public offering (IPO).

The flotation gives the company a market capitalisation of more than £21m, 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.

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It currently has 19 licensee businesses with 82 fee earners in offices in Daresbury, Manchester, Leeds, London, Reading and Aberdeen.

Aberdeen team - Bridget Otejiri Erekaife, Tom Faichnie, Melanie Clark and Ross Irvine.Aberdeen team - Bridget Otejiri Erekaife, Tom Faichnie, Melanie Clark and Ross Irvine.
Aberdeen team - Bridget Otejiri Erekaife, Tom Faichnie, Melanie Clark and Ross Irvine.

The firm 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.

Directors are targeting high margin, complementary, niche service lines with a “strong synergistic fit” with the existing Dow Schofield Watts network.

James Dow, chief executive of DSW Capital, said: “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.”

The firm said its challenger model encouraged diversity with the firm attracting a “high level” of female partners.

Just over a fifth of Dow Schofield Watts’ partners are female, similar to the levels seen at the Big Four accountancy firms. However, the majority of female partners at Dow Schofield Watts operate in corporate finance and transaction services, areas traditionally dominated by male partners, it noted.

For the year to the end of March 2021, DSW Capital received an average licence fee of 14.7 per cent of licensee revenues and generated operating profit of £1.7m and operating cash flow of some £800,000.

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The firm added: “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.”

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