Fairpoint lauds "unique opportunity" presented by Legal Services Act
Moat: good progress is being made on integration
The Legal Services Act has presented “a unique opportunity to create more competitive consumer offerings”, according to the earlier this year.
Issuing its half-year results yesterday, Fairpoint Group said the process of integrating the legal practice into its business was going well.
The consumer group – which also offers services around individual voluntary arrangements, debt management plans and claims management – saw revenues virtually static at £13.9m for the six months to 30 June 2014, with profit before tax down from £2.5m last year to £1m this.
Its report to shareholders showed that Fairpoint has so far paid £5.7m in cash and a further £2m in shares for Simpson Millar, with further consideration of up to £6m possible over the next two years depending on the firm’s financial performance.
“The acquisition of Simpson Millar in June 2014 is intended to provide a platform from which the group can deploy its core skill of process to professional services,” said chief executive Chris Moat. “This strategy builds upon the success already achieved through delivering products and services designed to help consumers make their money go further.”
Simpson Millar generated first-time revenues of £1.2m and an adjusted pre-tax profit of £100,000 for the two weeks it was part of the group in the first half.
Simpson Millar, headquartered in Leeds, has over 250 employees based in 13 offices around the UK. Mr Moat said: “The firm, led by an experienced and well regarded senior management team, has been responsive to changing market dynamics, capitalising on opportunities to develop new service lines and acquire further caseloads, teams and firms. It is underpinned by modern IT platforms, case management processes and quality accreditations.
“The business has a strong track record of growth and profitability with revenues rising over 40% in the period 2009-13.
“Good progress is being made on detailed integration work streams in areas including sales, marketing and support services… The board continues to expect that the acquisition will enhance the group’s earnings on an adjusted basis from the second half of the current year.”
Shortly after the acquisition, Fairpoint also bought Bristol-based family law firm Fosters & Partners for a deferred consideration of £400,000.
“This represents the commencement of the group`s stated strategy for this segment, to selectively make complementary or synergistic acquisitions to enhance the established platform of Simpson Millar,” Mr Moat said.
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