War, what is it good for? Not getting deals done, that's for sure
As DSW Capital issue profit warning due to deals "aborting" we ask, is this a crisis?
Hello Rainmakers,
This week started with a bit of a bang, when listed advisory business DSW Capital issued a profit warning to the stock market saying that deal activity had impacted the half year performance to such an extent that it wouldn’t make its numbers.
We’ll come back to this at the end of the week, but here’s a test of the temperature out there, including from our own Secret Investor.
Rainmakers subscribers get two unique pieces a week, but also full access to our back catalogue of investigations, scoops, and insights, including updates from The Secret Investor, but also probes into trends. Like this one.
It seemed a cruel blow for chief executive Shru Morris who has made sustainability and a move away from a dependence on “lumpy” M&A revenues something of a strategic priority at DSW Capital, as she told Rainmakers in a profile last year.
However, she was pretty clear about the reason why she had to warn the stock market this week that the business wouldn’t hit its numbers - the ongoing war in the Middle East had caused such uncertainty that several deals that their network of advisers had been banking on, had in her words, “aborted” in what is traditionally a busy month for deals, at the end of a financial year end.
Their licensees, who operate under the Dow Schofield Watts banner in different locales, wouldn’t be contributing enough fees and so Morris had to tell the market the bad news.
March is traditionally an important month for M&A completions ahead of the tax year end, but the rapid drop-off in activity has forced DSW Capital to revise its expectations for the year ending 31 March 2026.
Morris 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.”
DSW shares plunged over 20% on Monday following the update, which lowered full-year expectations.
In the last 24 hours we’ve asked whether this what the rest of the sector has been finding. Afterall, everyone says that deals are taking longer to do, but has this culture of delay just proved bad timing for DSW’s reporting cycle, or is it a sign of something more serious.
