HFW sets new records for revenue and profit as strategic focus pays dividends
Firm posts 8% revenue hike on back of sustained international expansion
July 31, 2018 at 07:00 PM
3 minute read
HFW has posted an 8% uptick in revenue for 2017-18, with profitability also increasing on the back of a continued focus on key sectors and international expansion.
Revenues rose from £165.7m to £179.1m during the year – a new record high for the firm – with net profit up 12% to £47.5m and profit per equity partner (PEP) inching up 2% to £542,000.
Senior partner Richard Crump said the firm had seen "strong growth across the board". Commodities was its strongest-performing sector group, with revenues up by more than 21%, followed by energy on 20% and construction on 16%.
"In our global industry groups – aerospace, commodities, construction, energy, insurance and shipping – clients tend to be international," said Crump. "Our strategy is to follow them into jurisdictions where they may need our assistance, such as Houston [where HFW merged with US firm Legge Farrow Kimmitt McGrath & Brown in January 2017]. My job is to continue looking for such opportunities."
Since 2016, the firm has completed seven international mergers and associations, including in Indonesia and Brazil, as well as making partner hires in Singapore, Brussels and Dubai. So far in 2018, the firm has made nine lateral hires and nine promotions, with all but one based outside of the UK.
Though revenue growth has levelled out slightly on last year – when the firm boosted its top line by by 15.8% – Crump said he was "reasonably happy" with 2017-18 results, especially as "markets are becoming increasingly tough".
"Markets are tight, despite commodities and oil prices going up. Pricing is an issue much more than it was say 10 to 20 years ago," he added. "So driving revenue growth is a real challenge. And for new offices there is some lead time until they start to see growth.
"As for PEP growth, we've added a number of new partners, so this is inevitable. We're continuing investment on our growth path and I'm happy we haven't racked up debt to fund this growth."
As for standout practice areas, Crump highlighted M&A and litigation, where the firm has "done some good stuff", attributing recent successes to "strengthening relationships with existing clients", including a reappointment to BP's panel. Recent M&A successes for the firm have included acting for the Greek state in its €535m sale of a gas transmission operator.
Crump expects to see continued growth in 2018-19, particularly outside of London, where 60% of the firm's revenues are now generated. "I think most of our growth will be international, especially in terms of new additions to teams," he added.
On Brexit, Crump remains stoic: "It continues to remain unclear. For us, the majority of our clients are international, and much of our business is international. Of course, we're monitoring it carefully and may have to make some adjustments, but I don't think it will have a huge impact.
"Even in London, about 35% [of our lawyers] are serving international clients. We're not fundamentally a UK domestic firm so that puts us in reasonably good stead ahead of Brexit. We're watching it carefully, but not panicking."
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