Biles: Strategy vindicated
Listed law firm Ince Group is examining how it could take advantage of the new rules allowing solicitors to practise from unregulated businesses, it said today as it announced strong half-year results.
What was Gordon Dadds is set to hit annual revenues of around £100m following the merger with Ince and other acquisitions during the year. When it listed in August 2017 [1], turnover was £25m.
The Solicitors Regulation Authority’s Standards and Regulations, which came into force this week [2], for the first time allow practising solicitors to deliver non-reserved legal services from bodies it does not regulate.
Ince told investors today that it was considering the “opportunities to operate more efficiently and effectively for clients” that this change could enable.
It added: “We believe that the clients who approach us are looking for solutions. Rarely do their problems require the application of ‘reserved’ legal activities (which only solicitors can provide) and generally they require much wider commercial awareness.
“This is an ability which our partners have and which they continue to develop, supported by the wider skill sets we are seeking to grow.”
The announcement said that, in the short term, acquisitions would be “relatively small ones to infill skill gaps or offer exposure to a complementary service line or industry sector”.
“The objectives of both lateral hires and any acquisitions continue to be to increase the intellectual capital of the firm and to grow revenues which can then be processed efficiently through the established back-office.”
After five smaller deals in 2017/18, the acquisition of City firm Ince & Co [3] at the end of 2018, and arrangements with Ince’s international network, saw revenue rise 125% to £45.3m for the six months to 30 September. On the basis of organic growth alone, turnover rose 5.3%.
Operating profit went from £4.3m to £11.5m, while adjusted profit before tax – adding back non-recurring items, such as the cost of acquiring Ince, and deducting partners’ profit shares – jumped from £1.1m to £4m.
It hailed an annual saving of £2.4m from giving up the old Gordon Dadds offices and moving into Ince’s headquarters, and a further £2.6m in moving back-office activities to its low-cost centre in Cardiff.
Net debt at the period end of £10.4m, “resulting from the working capital invested in successful lateral hires and the costs of integrating the Ince business”.
Ince now has 23 offices in eight countries, including a Gibraltar office after acquiring local firm Ramparts in May.
In the first half, the geographic split of revenue was 67% from the UK, 20% from Asia and 13% from Europe and the Middle East.
The group has also opened an office in the Lloyds Building for insurance clients and in London’s Mayfair office – under the Gordon Dadds brand – for family and private client business.
Today it announced Mark Tantam, formerly a vice-chair of Deloitte, as global head of consulting.
Group chief executive Adrian Biles said: “These strong results are a vindication of our strategy. They are the product of the new international platform we have developed under the Ince brand. We remain on track to deliver circa £100m of annualised revenue in the current financial year, even with political headwinds buffeting some key markets across the globe.
“The second half of the year traditionally provides the majority of the group’s profits and the lateral appointments we have made will largely show through next year.
“The attractions of our model and approach are being recognised amongst senior lawyers and professionals in major financial markets around the globe as can be seen from the quality of our newest hires.
“I remain confident that the business can continue to develop from here generating increasing revenue and profits.”
Ince’s shares rose 6% at the start of trading to 127p. The share price has fluctuated sharply this year, having climbed to a high of 189p in January.