The financial difficulties facing many law firms offers a real opportunity for growth, AIM-listed alternative business structure (ABS) Abbey Protection has claimed.
Publishing its 2012 annual report, the company – which provides legal and professional fees insurance products and services to SMEs – announced a 7% rise in turnover to £38.7m and 3% increase in profits to £10.3m.
Last month it . The deal came too late for the details to be in the report, except that Abbey acquired £1.6m of goodwill and intangibles.
Abbey chairman Tony Shearer said the “biggest disappointment” of 2012 was the time it took to obtain the ABS licence, but added: “This acquisition will enable us to provide a wider range of legal services, not only to our traditional SME clients but also to larger businesses…
“We believe that there is a real opportunity for us to grow in this sector through the combination of the ‘freeing up’ of the legal services market together with the financial difficulties that many law firms, with whom we are now able to compete on a level playing field, face with downward pressure on their fees and their high overhead costs.”
Abbey runs the Law Society-backed Accident Line after-the-event (ATE) insurance scheme, and in 2012 it reported sales up 9%. Gross premium sales from commercial ATE policies exceeded £1.3m. Implementation of the Jackson reforms next week “will necessitate a product re-launch and some revenue reduction for the ATE division”.
Chief executive Colin Davison said: “A year ago our expectation was that we were facing two specific headwinds, namely a reduction in revenue within the legal division following the loss of a significant corporate client as it wound down and ceased trading together with an increase in incurred claims levels in Ibex, our reinsurance company.
“In addition, we anticipated the prevailing generally weak macro-economic conditions. Unfortunately, these issues were exacerbated as the expected licensing to expand our legal services offering did not materialise in 2012.
“Consequently, we are very pleased with these results as they show that the underlying trading from our core legal and tax divisions remains strong and again demonstrates that our business model is robust.”