Listed law firm Knights has blamed the impact of Omicron and staff illness for lower than expected revenues in 2022.
In a recent profit warning, the Newcastle-under-Lyme-based company says it had anticipated a strong second half of the year and 'substantial growth' following a successful first six months.
But the firm says a 'continuation of the impact of Omicron' and 'recent macro conditions' have slowed growth to a 'greater extent than anticipated.'
It said a large number of staff fell ill from the virus which meant people did not return to the office as quickly as the business would have liked.
Knights added that it has also seen a 'softening in business confidence' possibly due to concerns around the strength of the economy and, as such, there has been a slowdown in corporate work.
Now the firm expects to deliver revenue of around £126 million and underlying pre-tax profit of £18 million for the 12 months to 30 April, 2022.
Looking ahead, Knights anticipates organic growth of around five per cent for the year ending 30, April 2023.
Knights CEO David Beech said: "Following a good first half, it is frustrating that recent events have held the business back from delivering a stronger performance in the second half.
"Beyond this near-term uncertainty, the opportunity to cement our leading position in key legal services markets outside London remains substantial and we are as well placed as ever to deliver on that opportunity."
Ranked within the UK's top 50 largest law firms, Knights has specialists in all key areas of corporate and commercial law.
It is focussed on key UK markets outside London and currently operates from 17 offices located in Birmingham, Cheltenham, Chester, Crawley, Exeter, Leeds, Leicester, Maidstone, Manchester, Nottingham, Oxford, Sheffield, Staffordshire, Teesside, Weybridge, Wilmslow and York.
Robert Plant, analyst at Panmure Gordon, said: "Knights last reported on trading on January 11... which seemed positive.
"It then appears that trading has deteriorated and we can see how the Omicron wave will have had more of an impact given that cases have risen recently and then in the last month the conflict in Ukraine will have affected business confidence."
Mr Plant added: "Knights had reported nine per cent organic growth in the first half of 2022 and whereas we had previously expected 11 per cent growth in the second half of 2022, we now forecast four per cent growth."
