LLP round-up: Pinsents spent £20m on merger, while other firms show net debt hikes
Pinsent Masons' latest limited liability partnership (LLP) filing shows the firm spent £20.6m on its merger with Scottish firm McGrigors in 2012. The transaction incurred costs of £2.5m related "reorganising, restructuring and integrating the acquisition", according to the accounts filed with Companies House.
February 05, 2014 at 01:18 PM
4 minute read
Pinsent Masons' latest limited liability partnership (LLP) filing shows the firm spent £20.6m on its merger with Scottish firm McGrigors in 2012.
The transaction incurred costs of £2.5m related "reorganising, restructuring and integrating the acquisition", according to the accounts filed with Companies House.
The accounts also show the firm had to pay £637,000 in a one-off goodwill payment.
However, the merger significantly bolstered the firm's revenue and profit figures. Turnover rocketed by 38% to £305.7m in 2012-13 as a result of the combination, while operating profit grew from £62.9m to £87.6m.
Salary costs increased by 43% to £116.4m, while fee earner headcount increased from 809 to 1,227. Pinsents also added 39 partners to the equity after the merger, and non-equity partner numbers grew from 129 to 191.
Meanwhile, pre-merger figures for Dickinson Dees show the firm spent £727,500 on its tie-up with Bond Pearce, which went live at the start of May last year.
The firm's turnover grew by 3.3% from £45.8m to 47.3m. However profit available for division among members dipped from £11.7m to £10.8m.
The outcome contrasts Bond Pearce's audited figures, which showed increases in both turnover and profit for 2012-13.
Dickinson Dees' accounts show the firm's net debt grew by more than 20% in 2012-13 from £4.9m to £6m.
Other LLP accounts filed in recent days show that other firms are also increasing net debt, partly as a result of investment and expansion.
RPC's net debt grew by even more, more than doubling from £2.3m to £5.1m.
RPC managing partner Jonathan Watmough explained that the firm's debt is mainly attributed to the firm's investment in office launches in Bristol, Hong Kong and Singapore.
Watmough said: "It's largely our investment in establishing and developing three major new offices in just two years – that's 140 new people from a standing start, plus all of the infrastructure to go with them, half of them overseas.
"The story here isn't the increase in our debt in the year in question but the miniscule amount of debt compared to our competitors we have overall, given the platform we have built in such a short timeframe. We've invested largely out of our cash in other words, and not by virtue of the short term availability of cheap bank debt, and we're paying it down fast. That's the difference between us and nearly everyone else."
The firm's fee income increased from £67.4m to £81.7m during 2012-13.
The result is broadly similar to unaudited figures reported by the firm last year, which detailed a 20% hike in revenue from £68m to £82.1m. Profit available for distribution among the firm's members also improved significantly, increasing from £23.7m to £25.6m.
Meanwhile the firm's top earner took home £928,000, up 17.6% on £789,300 in 2011-12.
Watson Farley & Williams has also filed accounts, which reveal the highest paid member at the firm earned £847,000 during 2012-13, down 38% on the previous year when they took home an equivalent of £1.37m.
Turnover at Watson Farley stayed broadly flat after the firm brought in £67.7m, compared to £67.1m the previous year. However, operating profit slumped by 12%, dipping by £2.6m from £21.4m to £18.8m.
Profit available for division among members dropped by a similar percentage (12.3%) to £18.5m.
The figures come as staff costs at Watson Farley increased 15.6% from £21.8m to £25.2m, with wages and salaries accounting for £21.6m of the costs, up on the previous year's equivalent of £18.7m.
The account also shows the average number of legal employees at the firm increased from 158 to 175 alongside a rise in average LLP member headcount, which was up from 61 to 65.
During the year the firm opened an office in Frankfurt, while the report accounts for the firm's Hong Kong launch for the first time, with the latter opening in March 2012.
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