DSW Capital PLC (LON:DSW) shares plunged 21.6% on Monday following a trading update revealing that the outbreak of war with Iran severely impacted M&A activity in the UK, forcing the company to lower its full-year expectations.

The professional services platform reported that many deals expected to complete in March were aborted or postponed as clients await clarity on the long-term economic ramifications of the war. March is traditionally a critical month for M&A completions ahead of the UK tax year end.

The company now expects to report Total Income of approximately £6.2 million, Adjusted EBITDA of approximately £1.6 million, and Adjusted profit before tax of approximately £1.3 million for the year ending March 31, 2026.

Despite the M&A slowdown, DSW Capital’s DR Solicitors brand achieved revenue growth of approximately 11% in FY26 to date, demonstrating the company’s strategic diversification away from its historic reliance on M&A activity.

The company maintained cash reserves of £1.4 million as of February 28, 2026, and Net Debt of £0.5 million. This follows a £1 million loan repayment on its £3.0 million OakNorth Bank revolving credit facility and £0.8 million in dividend payments across October 2025 and January 2026.

Chief Executive Officer Shru Morris commented that the board’s strategic aim continues to focus on growing the business and building a resilient and diversified group of licensee businesses. The company is pursuing additional licensees and consultants while seeking new business at DR Solicitors.

DSW Capital, which owns the Dow Schofield Watts and DR Solicitors brands, said it remains profitable and cash generative despite current geopolitical and economic uncertainties. The company plans to announce a full trading update in May 2026.